Why use payroll software for your small business
All businesses, no matter what size they are, need to keep track of their payroll. While tiny companies might well be able to get by with the free tools on offer from HMRC, for most firms, they will need something a bit more substantial. Payroll software, such as easy to use online payroll software, can be very useful for small businesses. This articles looks at the reasons why it is useful, what it actually does and how it can make administering certain activities and events easier.
Why it is useful
First of all, the main reason payroll software is so useful for a small business is that it helps to do a lot of the payroll work for you. Wages are not only one of the biggest costs for little companies but they also come with a significant administrative burden, which is where the software can help you. It enables you to input all of the relevant data and then automatically calculates the payroll for you.
This typically includes taking account of things like employees’ tax and NI as well as employers’ National Insurance Contributions and the tax implications of any benefits that a firm may offer to its employees (such as pension contributions or childcare vouchers). Most good small business payroll software also updates whenever new regulations come into force, which is a benefit as it helps the calculations to stay accurate without the business having to worry about it.
What it does
As you can see from the above explanation, payroll software has the ability to relieve much of the administrative burden that goes along with any payroll. As well as making standard calculations for full-time employees, it also incorporates a wide range of other issues related to the payroll.
For example, many small businesses have part time staff, who also need to be on the payroll. This can be taken care of by the software, as can any employees who have flexible working hours or any overtime completed by employees. Without software, these are all additions and calculations you would have to make manually, so it’s easy to see where the benefits come from.
Good software can typically also keep track of rotating shift workers and flexible benefits. It helps to save time and means that companies have confidence that they will be able to produce accurate payslips for their employees on time. It makes it easier to determine how much people need to pay through PAYE, which also helps in terms of generating the right tax codes for employees.
You can also use the software to track things like absences and holiday leave. Online payroll software can be particularly useful as it allows for easy access and it is very simple to update, as well as ensuring businesses can access it wherever they need to as long as they have an internet connection.
Activities and events
As well as all of this, small business payroll software can also be used to track other regular activities or events associated with the payroll. For example, it is useful for keeping up to date employee records, which can be particularly useful when someone joins or leaves the company. It can also help you keep track of employee productivity such as by producing reports based on timesheets.
This is not only important for the company’s own information, but it also helps to make sure the company complies with relevant legislation such as the national minimum wage requirement or the working time directive.
Also, as any business knows, there is a requirement to file financial returns every year, and payroll software can make this much easier for your business as it keeps much of the relevant information in one place, where it can easily be transposed as required. There are good accounts courses available where employees can learn about how the software can be of assistance when dealing with financial returns. For example, the software can typically enable firms to issue P60s and P11Ds to employees, as well as submit forms to HMRC (such as the P14 and P35).
Overall, small business payroll software is very useful for all businesses. It helps to automate a lot of processes and means that less time needs to be spent administering the payroll, which frees up employees to focus on other things, as well as giving the company peace of mind that important processes are taken care of to a high level of accuracy thanks to this software. It is definitely something worth considering for your company.