Useful Tips to Help You Manage Your Payroll Effectively
As a small business owner, payroll management is one of the many tasks that come with the territory. It’s not something you’re likely to have much experience with or be a specialist in, so it pays to have a little help. The good news is that managing your business’s payroll is relatively straightforward, and with the right payroll software, you can take care of it yourself without having to worry about the costs of outsourcing.
With that in mind, here are a few simple tips to help you manage your payroll more effectively so you can focus on growing your business.
5 Payroll Tips You Should Know
1. Automate the process with payroll software
These days, all businesses with employees (unless you’re exempt) must have payroll software that reports PAYE information online. That makes payroll software a must-have rather than a nice-to-have.
As well as keeping you compliant and making sure you meet your obligations, payroll software also provides additional benefits. For example, it allows you to automate pay runs and pension submissions and make adjustments to your pay runs from anywhere. It can also integrate with your accounting software to give you a complete picture of the financial health of your business at any time.
2. Take care when inputting your employees’ details
Entering your employees’ details into your payroll software is one of the few parts of the process you can’t automate, so always take care. If you make a mistake during the onboarding, it could cause you problems further down the line.
As well as entering details such as start dates, addresses, National Insurance numbers and dates of birth correctly, you must also keep them up to date. Although National Insurance numbers and birth dates are unlikely to change, details such as addresses, bank accounts, and beneficiaries may. That’s why, although it might seem tedious, you should regularly check and update your payroll records.
3. Be transparent about pay
Let’s be honest, regardless of what they told you in their job interviews, receiving a regular paycheque is the most important thing to your employees. Too many businesses, particularly when timesheets, commission, bonuses and holiday payments are involved, are not clear about when timesheets should be submitted or when payments will be made.
Although payroll software can help you make payments on time, it’s your job to reduce employee confusion and keep employees informed about when they will be paid, how the process works, what they can expect as remuneration, and what employee benefits they’re entitled to. If you don’t, they’ll quickly find an employer who will.
4. Have a backup plan to maintain payments
Maintaining the continuity of staff payments is essential in any growing business. It’s not enough to tell your employees that their pay might be a few days late this month. They have their own bills to pay and if a payment doesn’t arrive when they expect it to, it will have an immediate impact on their trust and motivation.
As well as sending out invoices promptly to your customers and putting controls in place to help you maintain a healthy level of cash flow, you should also have a reliable form of short-term finance to fall back on. That will ensure that, even if a major customer doesn’t pay you on time, you’ll still be able to pay your team.
5. Ask for feedback from your employees
Your payroll processes have a direct impact on the happiness and motivation of your team, so it’s important to ask for employee feedback so you can gauge how well you’re doing. With so many other complex aspects of employer-employee relations to slip up on, it’s important to make sure you’re getting what should be a relatively simple administrative process right.
Managing your payroll effectively is one of the most important aspects of running any business. It plays a vital role in employee retention, is a legal necessity and helps to create structure in your business operations. Get this simple task right and it will become an important element of your company culture and give you and your team more time to focus on what you do best.