Payroll processes are a crucial component of most company structures, and yet we may not fully consider the effect that these processes can have on the health of a company’s bottom line. Below we round up how incorporating a payroll platform into your business model could make a big difference to your end-of-year balance sheet.
Using a payroll platform (a digital platform that provides payroll solutions to help manage the entire process) can help your company to reduce accountancy charges. This is due to the fact that you will be submitting to your accountant a set of reliable figures via the platform, which the tool will have calculated. If you pay an hourly fee for your account’s services, then you can expect to see a drastic drop in these charges.
Some platforms may negate the need to employ an accountant’s services in relation to your payroll affairs entirely.
Late or inaccurate payroll filing or filing payroll information in a form that does not officially comply with legal requirements can result in a substantial fine being levied on your business. Using a payroll platform is a useful way of avoiding these penalties; most platforms will automatically calculate the correct amount of money payable for all the relevant taxes that need to be paid. Find out more regarding how a payment platform can help your business remain compliant with all the necessary legal requirements and ensure accurate returns and payments to staff members every single time.
Having an efficiently running payroll can save you time in terms of workforce hours lost. For example, a manual system may necessitate a member of staff having to spend a significant time each month rooting through files and folders to locate an essential piece of information or an old salary stub. An in-house computerized system has the potential of requiring duplication of data, which also costs in terms of staff time lost to this task. If you add up the hours spent on these sorts of functions and the hourly rate you’re paying for this time, it may well become clear that a payroll platform could be financing itself within a very short space of time. The reduction in the need for data entry and the creation of reports and other documents further help in hourly time savings, and can free staff up to be engaged in more useful (and profitable) assignments.
The lack of security around an in-house payroll system can leave your business open to fraud and hacking, both of which are likely to incur significant expenses and be catastrophic in terms of compromising personal staff information. A payroll platform will, in most cases, feature enhanced digital protocols that will be regularly and automatically updated to ensure that all payroll details are stored safely.
The cost to remedy a security breach, not to mention the effect such an incident can have on staff morale and the public perception of your company, is likely to be very high.
Most payroll platforms will automatically update and adjust as necessary when it comes to tax. This is a compelling reason to consider installing digital payroll processes, as, should you miss an update to tax, your business will end up paying the incorrect charges from that point onwards. If you’ve underpaid, a significant bill will be lurking up ahead for you, which won’t help the health of your bottom line. Similarly, this facility means that your business won’t be at risk of ever over-paying tax, therefore committing money unnecessarily that would be better spent elsewhere. Although overpaid tax is always repaid, this can take some time.
No Training Required
The very nature of payroll platforms is that their software does all the work and calculations for you, so staff do not need to be specifically trained to use this tool. This serves to negate the cost of both initial and ongoing training. Where in-house or manual payroll practices are used, the member of staff responsible for payroll administration going off sick could cause significant problems to an office, possibly necessitating the need to employ expensive temporary payroll-trained agency staff.
Ensuring that your employees are consistently paid correctly and that the appropriate tax rates are applied to each member of staff is vital so that you can be confident that your balance sheet is a true reflection of the financial state of your business and that errors in payroll administration and reporting aren’t skewing the figures. Inaccurate data that affects your business’s balance sheet can, down the line, result in making decisions that, due to being based on these figures, don’t work out for the best.
Automated employee time logging, which many payroll platforms offer, also totally eradicates the possibility of staff members recording inaccurate start or end times and gives you peace of mind knowing that all employee benefits are being administered accurately, saving you the money that could otherwise be lost to inaccurate entries.