5 steps to streamlining your payroll
Payroll is one of those things that starts out simply enough. You start your business, hire a few employees, and things tick along pretty well. It’s straightforward enough to keep everything in line at first, but what happens to most companies is… they grow!
This is a great thing, but it also means that payroll becomes more complicated. As such an important aspect of your business, it’s important that payroll runs smoothly. Getting paid is, after all, the primary reason that most people come to work.
Here are some tips to manage payroll effectively:
1. Payroll Software
Finding the right software to help with payroll can automatically take care of the majority of the work. It means you can free up valuable time for the payroll administrator of your business and avoid tedious manual calculations.
It also eliminates the potential for human error in payroll processing, and creates a crystal clear picture of your finances.
Filing your PAYE also becomes a lot easier, with a lot of payroll systems automatically filing returns and paying the Inland Revenue all on payday.
There are many options available these days that are easy to learn and straightforward to maintain. When we look for software at The Accounting Hub we look for three things; simple, as automated as possible and Xero integration. For several years now we have been recommending Smartly Payroll Software to our small business clients.
Payroll is one of those things that can be overly complex, and the importance of simplifying can’t be overstated. Many companies, especially small and medium-sized ones, have their own quirks about how they manage their payroll. This can make it difficult for somebody else to step in, or for someone new to be trained.
Keep things as simple as possible wherever you can. One way to do this is by using the payroll software to automate payments. This will drastically reduce the amount of work put into issuing and tracking payments. If you use modern software like Smartly then payments for wages and PAYE can be automatically deducted when you authorise a pay in the software.
Create a payroll calendar as this will allow you to plan for any potential shortcomings or other issues that may arise from holiday closures or oddities in the calendar. With many employees having automatic payments and direct debits set up it is important to make sure that employees are aware of any potential delays in getting paid that may come up.
It is also a good idea to pick a pay day that has the least amount of interruptions. An easy pay day would be fortnightly on a Thursday for example. This way it will never fall on a weekend and In New Zealand, most of our public holidays fall on a Monday or a Friday with the Christmas and New Year holidays being the exception. If you had an end of month pay day you may find that you have to authorise payroll on the weekend and it may not get processed by your bank until the next working day.
4. Brush up
Payroll rules and regulations can change frequently and for any number of reasons. It’s important to stay informed on any changes in your region and proactively plan for them.
A lot of time can go into correcting a payroll error, so know what’s happening ahead of time to avoid this. With more and more employees being hired remotely, it’s also important to be aware of any regulations that may pertain to those that are geographically located in a different area from your business.
5. Get help
There comes a point for all growing businesses where they have to outsource their payroll processing. If this is you, congratulations! It is truly a milestone.
There are many options out there as far as hiring a payroll specialist is concerned, and many of them are available online. Choose the one best suited for you without leaving your desk. This takes the pressure off of you to know all of the nitty gritty details about payroll processing. By hiring an outside professional, you can be sure that your employees will be paid correctly and on time. At The Accounting Hub we can provide payroll services to our clients as part of an end to end accounting service. Using the same firm for all of your accounting and taxation needs means that one organisation has an overview of your organisation which helps in providing a seamless experience.
Payroll is most effectively managed when it’s simple, straightforward, and coordinated. When it starts getting tough to keep it that way, it’s likely a sign that your company has grown and you’re ready for more robust support.
For help or assistance with your payroll, please contact us at The Accounting Hub.