Inefficient Payroll: Is it Damaging Your Small Business?
Managing payroll is challenging. It’s an ever-changing practice that should be managed by a trained payroll professional but is often left to a business owner or finance manager in a small business. With little or no room for error, inefficient payroll processes can have a significant impact on a business, leading to delayed payments, loss of money, compliance issues and more. However, there is a solution. In this article, we run through the telltale signs of bad or outdated practice, the effects it can have on a small business and, most importantly, how to get it right. Here’s how Finesse Resources can set your business up for payroll success.
What causes inefficient payroll?
Manual data entry
Does your business rely on employees filling in physical forms, only for an administrator, finance assistant or you to painstakingly input the data onto a computer? Not only is manual data entry time-consuming, but it can also hinder your payroll efficiency. This type of data entry is proven to be error prone, with hard-to-read handwriting the biggest culprit. It’s also not scalable, making it challenging for growing businesses that need to process payroll for an increasing number of employees.
Lack of payroll software training
Just as a race car is only as good as the driver behind the wheel, your payroll software is only as useful as the person behind the keyboard. Having the software alone is not enough. If your team isn’t completing regular training due to time or financial constraints, it’s likely that you will be missing out on important features such as automation that can make your payroll run smoother, faster and more accurately.
Lack of expertise
A common trait amongst small and micro businesses is a lack of payroll expertise and experience. The responsibility of payroll usually lies with a small, overstretched finance team or a do-it-yourself business owner who lacks adequate knowledge of the UK’s ever-changing payroll regulations and processes. This can lead to mistakes, delays and compliance issues.
What are the effects of inefficient payroll?
Delayed payments
Getting paid accurately and on time is an expectation that must be met, but inefficient payroll can often leave this in jeopardy. If working late in the run-up to payday is a familiar activity for you or your team, it’s time to do something about it. After all, the impact on employee morale can be catastrophic.
Loss of money
Inaccurate payroll can lead to errors in employee pay and tax calculations, resulting in underpayments or overpayments. Overpayments can lead to additional expenses, while underpayments can lead to legal issues and penalties – not to mention unhappy employees!
Time wastage
Manual data entry and inefficient payroll processes can be time-consuming. As the saying goes, time is money. If your team’s time could be spent on other important business activities, it might be time to consider our solution below.
Compliance issues
Inaccurate or incomplete payroll can lead to compliance issues, such as late tax filings or underpayment of taxes, which can land you in hot water with HMRC. An efficient payroll process will help your business avoid legal issues and penalties.
Lack of scalability
Systems that work for a team of five don’t work for a team of 50. And systems that work for a team of 50 don’t work for a team of 500. We might be getting ahead of ourselves there, but as your business grows, so must your payroll processes. Failure to do so and they’ll be slowing you down and costing your business money.
The Solution – How to set your business up for payroll success
The solution is simple - outsource your payroll to Finesse Resources. We are a team of dedicated payroll specialists who make sure your employees get paid on time, every time. We handle all of your compliance responsibilities and take the time-consuming work away from you or your finance team, freeing up their time to work on other important tasks. We are based in the North West of England and work with small businesses all over the UK to help them maximise their payroll efficiency.
Here are some of the services we provide:
✓ Data entry
✓ Payroll processing
✓ Statutory assessments and payroll
✓ Pension payroll
✓ Pension auto-enrolment obligations
✓ General payroll administration
✓ Payroll reporting
✓ Year-end processing
✓ Earnings attachments
✓ Digital payslip delivery
✓ Expenses and benefits
✓ RTI filing
✓ P45 and P6 application