Why should a company use payroll software?
Salary is the sum of all financial items of salaries for an employee that includes salary, bonus and deduction. To ensure that all employees receive their pay or bonus, companies usually use calculators or, thanks to technological advances, software that can reduce the burden of understanding complex payroll laws and operating payroll systems to do what we call a payroll.
Salary software facilitates the automatic calculation of gross salary or salary due to an employee based on working hours with a fixed hourly wage or a fixed periodic salary. Payroll software automates the application of payroll legislation to make the necessary tax deductions to transfer the correct net pay to the employee either by cash, check or credit transfer. Employers are required by law to then reimburse Wages, National Insurance, Pensions and Deduction for Affiliation Order to the relevant HRMC, pension provider or court in a timely manner.
Payroll software is an important tool for the benefit of the company that provides crucial audit, management and financial reports that describe employee costs and / or cost center / department costs. Software sorts and tracks personnel records that help with the HR function of the company.
Salary reports play an integral role in the financial planning and budgeting process of a business that predicts the necessary labor costs and investments to meet the needs of the business in the future. These reports are implemented to make the most important business restructuring decision to reduce workforce and employee numbers when needed.
Additional features of payroll software
An important advantage of using payroll software, other than automating complex payroll tax deductions, is the large reduction of time invested in the process. Production of automated paychecks (email paychecks), time imports from clock-in systems, HMRC returns / submissions from P45, P46, P30 and P35 to HMRC, and credit transfer files for online banking facilities all facilitate an efficient payroll function within the company. The investment in payroll software leads to a reduced investment in staff training and time to complete the entire periodic payroll process.
Features to look for when purchasing payroll software
When purchasing payroll software, pay attention to the following features: electronic filing, costs and updates, and customer support / maintenance contracts.
Electronic filing means that software vendors must provide a way to archive forms that can be stored electronically, including submissions to HRMC. In addition to the purchase costs, most of the costs will be in operation, support and updating of the software. So you will have to check how much the support costs and find out when and how the software is updated, does your license cover all the necessary updates to complete the payroll for the tax year?
Continuous customer support for the end-user of any software program is essential to the smooth operation and maximization of the software potential; Imagine there is a payday software problem, due to the critical nature of the software, it needs to be fixed quickly, so before you buy a particular payroll software, make sure it offers excellent support to its clients and check the levels of the support provided specifically by the supplier, costs and response times.
Recent initiatives rolled out by HMRC see only a few exceptions to the mandatory online filing of all employer returns to HMRC, so before choosing software, make sure it is HMRC compliant! Make sure it is consistent with HMRC employer return requirements, will it fulfill your obligation as an employer to file returns with HMRC in the format they dictate is the software recognized by HMRC? Does it include HRMC accreditation? Surveys and the ability to use unlimited free trials with payroll software and its functionality are key to this decision making process!
Payroll software for small and medium-sized businesses
When talking about adapting the payroll solution to the business size, keeping enough money in a payroll account is one of the top priorities for small business owners, even if the business is not making profits, employees still have to be rewarded as per the terms and conditions of their employment contract for their benefits, any deductions made in accordance with regulatory requirements must be transferred to the appropriate government agency / HMRC body when required. This is why many smaller companies prefer to keep their payroll obligations as low as possible until they have started to make a profit and have reached a certain level of profitability. Small business owners usually deduct their own wages in order to meet their payroll obligations. There are specific pay packages for small businesses and they are usually free (up to a certain number of employees who use the software).
Payroll software brings value to a business
There are several factors to consider when a company makes a decision on its payroll system, e.g. Payroll goals, financial availability and size, just to name a few. The important aspect is that any payroll automation must create value for the business and make it more efficient. If you are looking for payroll software, check carefully what the market has to offer you. Lastly, make sure you make a decision based on the software’s features and not its brand. There are very interesting payroll software solutions out there.