Money Matters

How to choose a payroll system for your business

From the moment a company starts hiring employees it must adopt a solid and comprehensive […]

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From the moment a company starts hiring employees, it must adopt a solid and comprehensive payroll system.

Choosing an integrated and complete payroll system may not be at the forefront of your mind as an entrepreneur keen to explore business opportunities but this step is essential to avoid future problems related to growth.

It’s all a matter of building on solid foundations.

It is also important to remind any budding entrepreneur that employing people carries a number of legal obligations, such as operating PAYE (pay as you earn) as part of payroll.

PAYE is HMRC’s system to collect income tax and National Insurance from employment. This means there are also deductions to be made and reported to HMRC.

While you don’t have to be an expert to run a payroll system, it’s important to choose a system that matches your businesses. In view of that, here are five things to consider when choosing a payroll system.

1. Security

Often overlooked in favour of other features, security has to be one of the primary concerns of a solid payroll system.

Make sure you are familiar with the security policy of the system provider while looking out for features such as encryption and customer support.

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2. Consider how you pay your employees

Do you pay your employees via direct deposit or do you issue cheques? Many payroll systems integrate with banks but there may be a cost associated.

3. Keeping records

If you run payroll for your company, it is essential that you keep records of salaries and deductions.

It is therefore important that regardless of the system you choose, it should have the capacity to hold these records making them accessible at the click of a button.

4. Think about automation

As demand increases for businesses to perform complex, labour-intensive tasks, automation can offer a way to save time and increase overall efficiency.

The goal is to automate as many manual processes as possible while eliminating any possible source of error.

Technological advancements and the influential role cloud computing is playing have accelerated the evolution of business processes from re-engineering to automation.

5. Be two steps ahead

A good payroll system needs to accommodate rapid expansion. Ask yourself, can the business cope with hiring extra employees? Or, will the extra admin be too much of a burden?

This is why it is important to consider features such as modularity and ease of expansion when selecting an integrated payroll system.

Cloud-based payroll systems provide real-time reporting as well as frequent updates to cover the latest changes in legislation.

An integrated payroll system brings a level of overall clarity to the business as well as improved compliance, particularly if compared to locally hosted systems that will take longer to adapt to any changes.

The guide to people and payroll

Want to motivate your employees, manage the run-up to payday and improve your payroll processes? Get you free guide and use it to get your people and payroll processes working effectively.

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