As a registered business owner, you need a PAYE reference number. Under the HM Revenue and Customs, you should either do the payroll on your own, outsource the service, or use payroll software.
It’s a good thing that there are vendors today offering various payroll software solutions with different features, so you can find the one that will fit the requirements of your business just right.
What is a payroll management system?
As Tugela People explains, you use a payroll management system to manage your company’s payroll. Payroll is defined as the process of computing employees’ total earnings and withholding some of that earnings to pay the government directly as payroll tax.
When you have a payroll management system, it ensures that the process of computing the money that your employees earned for a specific pay period, from gross pay to net pay, is computed correctly. A robust payroll management system takes care of the many tasks involved in computing payroll and ensures that your employees are sent the right payment at the right time.
Small businesses need all the help they can get to compete with big corporations. That is why a payroll service can be incredibly helpful to a small business owner who needs help with their administrative tasks. These services take care of the monthly task of managing the payroll and can be a great help to any small business owner.
The primary purpose of a payroll management solution
It is easy to define a payroll management solution’s primary purpose: to handle all the small tedious tasks involved in computing how much each employee will receive during a pay period. It means accurately calculating all the earnings and the deductions, including the payroll tax due to the HMRC. Automating the entire process of payroll preparation, the solution will perform the task comfortably, quickly, and properly.
Some payroll solutions have added features such as self-service. Managers and employees can log on to the system, check their personal information and make changes to it. They can review their payment history, upload timesheets and expenses, or request time off directly through its dashboard.
Benefits of using a payroll software solution
Payroll is a critical business process because when it is poorly managed, it can lead to low morale, legal and reputational issues, and poor staff performance. As mentioned earlier, with a computerized payroll solution, your payroll staff can do the process efficiently and quickly even if the deadline is near.
- Automatically calculate the gross pay and net pay faster
- Print payslips accurately
- Process HMRC forms
- Calculate additional financial and non-financial benefits due to each employee
- Comply with government regulations through regular updates
- Store all critical data and records either in the company’s servers or in the cloud
Some payroll solutions will allow you to integrate your existing HR management system and timesheet system. This feature gives your payroll system more flexibility and lets your staff make the calculations a lot faster and reducing errors in the process.
Aside from the fundamental processes, a payroll solution can also generate reports, which will allow you to analyze staff costs against your business spending, or segregate reports by departments, locations, and jobs. You can likewise make projections based on the reports you generate.
Even if you’re still a small business, it is important to start right. Using payroll software with the right features will make your payroll processing simpler, faster, and more accurate. As your business grows, the more complex your payroll processing will become, and you’ll be glad that you have the foresight to deploy a payroll solution.