How to get your payroll ready
Guest Blog by Conor McArdle, Content Executive at Brighter Business
When your business moves from a one-person operation to requiring more employees, it’s an exciting time! You’re a successful and growing business, and you’re taking the necessary steps to guarantee future growth.
Part of the process is making sure that you’re ready to take new people on, starting with the most important bit: payroll. After all, people are unlikely to work for you if you can’t pay them.
Paying your staff in timely fashion is just one of your responsibilities, however. You’ll be required by HMRC to keep records of payments made, accurately deduct tax and national insurance contributions, and other deductions (if, for example, you employ a university graduate, they may be repaying a student loan and that is deducted from payslips).
You have two options: you can roll your sleeves up and manage your payroll yourself, or you can outsource it to a qualified payroll provider.
Outsourcing your payroll
Opting to outsource payroll is a decision which will ultimately save you time and a headache, but at a cost.
You can find accountants who operate nearby to your business and can help to manage payroll and the necessary deductions that apply. If you decide to outsource, you should use a reputable accountant or accountancy firm.
However, there is an important caveat to note: even if you outsource your payroll to an external provider, the legal responsibility for all PAYE-related tasks will still fall to you.
You’ll also be responsible for collecting and keeping a record of employee details to pass on to your payroll provider. Make sure that this information is stored and exchanged securely, in line with GDPR requirements around processing of data.
If you choose to manage payroll in-house, then you’re in luck. There are a growing number of software solutions to help small businesses manage their payroll. Some of these are even certified by HMRC for accounting and tax purposes.
There are both free and paid-for options recommended online by the government. The free ones are designed for business with ten or fewer employees. Paid-for options are for those companies with more than ten employees (some of these will be certified by HMRC, though the body is unable to recommend any particular provider).
It’s worth taking the time to assess your needs currently as well as planning for any growth in the future. Some software will be more functional than others, so depending on how confident you feel in your own ability, you can choose appropriately.
Payroll software from providers (such as Sage, for example) is billed monthly and the price you pay will depend on the numbers of staff you have. Generally, the more employees you have, the more expensive payroll software will be.
There are a number of software solutions for businesses to manage their payrolls, and the good news for small businesses and start-ups who need flexibility is that these options are only growing. Some of these are certified by HMRC for accounting and tax purposes. Similarly, there is no shortage of qualified accountants.
Whichever way you decide to manage your payroll and financial obligations, remember the two key things: remember your obligations and keep your records!
For more tips, guidance and information on managing your finances, visit www.brighterbusiness.co.uk