Staying on top of payroll can be tricky for small business owners, with small finance teams and the myriad responsibilities of running a business.
That’s why Finesse Resources, a leading UK Payroll Provider based in Lancashire, has compiled a list of ten invaluable tips to help you streamline your payroll operations and avoid costly errors.
In this article, UK Business Magazine will share Finesse Resources’ expert advice and best practices to ensure your payroll is accurate, compliant and hassle-free.
Pick the right payroll schedule for your business
Choosing a payroll schedule that works best for your business is vital, and it’s not too late to change as long as you communicate clearly with your employees. When deciding whether to pay weekly, bi-weekly or monthly, you should think about which one is most suited to your cash flow requirements.
Surveying your employees and understanding their preferences is also a good idea. Whichever choice you make, ensure your chosen schedule doesn’t threaten your capacity to process payroll efficiently.
Automate payroll processes (and stay informed about software updates)
Payroll is one of the most suitable business functions for automation – and with so many important responsibilities, it’s a good job!
Using payroll software or online payroll services that automatically complete tasks like calculating pay, issuing payslips and generating reports will save you time and minimise the risk of errors.
If you’re already using payroll software, make sure it’s up to date by upgrading to the latest version. Doing so will mean you can benefit from new features and ensure that any bugs in the software are fixed.
Treat data carefully
Data loss can be catastrophic, so ensure that your payroll data is regularly backed up and stored securely. Implement a robust data backup strategy to protect sensitive employee information and prevent data loss in case of unforeseen events.
Hopefully, you’ll never have to use it, but having a good cybersecurity plan in place is important.
Pay on time every time
This might seem basic, but there’s merit in doing the basics well. Being paid accurately and on time every month will keep your employees satisfied and demonstrate that you value their contribution to the business.
It will also prevent any violations of employment law. As well as paying employees accurately and in a timely fashion, the same rule applies to paying HMRC. Make sure you meet payment deadlines and pay your tax bills accurately to avoid penalties and fines.
Keep up to date with legislation
Keeping abreast of the latest HMRC legislation is crucial to ensure compliance with payroll regulations. Regularly review and understand changes in tax rates, employment laws and reporting requirements to prevent any penalties or legal issues.
Most changes usually come into effect at the beginning of a new tax year in April. Many of them will be automatically fed into the latest version of your payroll software.
Prepare in advance for year-end
The smoothest year-end possible comes from being organised throughout the year.
Keep employee records up to date, check that your Real-Time Information (RTI) submissions have been accurate, and prepare the Full Payment Submission (FPS) and P60 forms as early as possible to avoid last-minute stress and late nights at the office.
Schedule regular audits
Part of staying organised in anticipation of year-end is being disciplined enough to self-audit regularly. This will help identify and rectify any discrepancies or anomalies.
Taking a proactive approach to payroll auditing helps to catch errors early and maintain the integrity of your payroll system. It also helps you be prepared for an external audit from HMRC.
Communicate clearly with employees
Establish clear channels of communication with your employees regarding payroll matters. Inform them about pay schedules and changes to policies like overtime calculations, leave entitlements, and any other payroll-related matters.
Doing this promptly and transparently will avoid confusion or misunderstandings.
Train your employees
Investing in training for yourself and your finance team is always money well spent. It will enhance their knowledge and skills, make sure they are aware of the latest industry trends and legislation and keep them up to speed on software advancements.
Well-trained staff can handle payroll challenges more efficiently and contribute to error-free processes, and it will also help them feel valued as an employee and satisfied in their job.
If you’re a small business and have a single employee in charge of managing your payroll, it’s always a good idea to have a backup employee trained on the basic functions in case of absence.
Outsource to a professional payroll provider
Seek professional guidance when you need it. Finesse Resources is on hand if you’re unsure about complex payroll regulations or need help getting through the workload in time.
Our CIPP-accredited professionals will share their experience and expertise to save you time and ensure compliance with the ever-changing landscape of payroll in the UK.
Whether you want to outsource some or all of your payroll commitments, we’ll create a bespoke package that works for your business.
