Managing a payroll efficiently can become more challenging if the number of employees in a business starts to grow. An in-house process that may have worked well for a handful of employees may not work so well once the number of employees starts to increase. Keeping the tax man happy is one thing, deducting student loans or making and claiming back statutory payments is quite another. At the end of this process employees should receive correct payments. Having confidence in your payroll is essential component of any business.
There are often two options for managing your payroll. The first is to outsource your payroll to a credible provider. There after you will only need to supply the relevant data and the rest will be done for you. The second option could be the purchase of software which will manage you payroll for you. The use of software still requires human intervention. If you are thinking of taking the DIY approach to managing your payroll here are some tips to assist you.
Use predefined benefit deduction codes
Encompassing standard predefined codes for tracking benefits within your payroll can make it easier to keep track of employee benefits. Keeping track of sickness pay, annual leave or the repayment of loans is an essential feature of any payroll system. Overpayments or underpayments can play havoc with you business finances. Not to mention how unhappy employees will be if they do not receive the correct salary.
As your business grows so will the diversity of individual payment circumstances. The one size fits all approach of running a payroll may o longer be applicable. As such your payroll will need to be tailored to meet the individual circumstances of your business. It may well be that standard predefined codes may no longer be applicable to your changing circumstances. Subsequently it will be necessary to customise your system so that it facilitates the use of deduction codes. It is always a good idea to try and anticipate future needs from the beginning when designing your payroll system as this will facilitate future growth.
Setting up effective dates
Once effective dates have been set up there will be no need to remember when employees are due incremental rises or when they are due other employee benefits. Implementing effective dates will aid the automation of whatever payroll system you are using as benefits will automatically take effect on a specific date.
Food for thought
Managing your payroll correctly is not something that should be taken lightly. Ensuring that employees pay and benefits are being correctly calculated is a full time job in itself. It is not something that should be hurriedly tacked on to the end of a busy day at the end of the month. Prior thought and consideration about the level of expertise, knowledge and time commitment is essential when deciding how your payoll should be managed and who should be responsible for the task.