Running a payroll for larger organisations with full time
accounting staff is easy. Full time professionals are
employed or the payroll function may be outsourced to a
payroll bureau. For the small business the payroll task
often falls to the proprietor demanding even more time to
familiarise with current payroll legislation and a not
insignificant amount of administration time that could be
better spent making profits than number crunching. For
small business organisations with five to ten employees
calculating the income tax and national insurance
contributions in producing the weekly payroll can easily
take an hour or more each week. An hour that could be
better spent earning profits or at the very least having an
extra hour of free time each week. Free time that small
business owner's value at a premium since the majority of
small business owners either work or think about work from
dawn to dusk 7 days a week. A payroll software package to
satisfy the PAYE requirements can be just one part of
making that small business more efficient.
Small businesses that fail to operate a sound payroll
system can produce a negative effect on the employees. The
pay an employee receives is expected, often spent or spoken
for on receipt and provided the amount is a competitive
rate would only rarely have an effect on staff relations.
However operating a payroll system that does not provide
each employee with a payslip is like telling your employee
he has received a personal letter that was opened for him
and discarded as not important. To the employee a payslip
is very important. And so important in that every employer
has a legal responsibility to provide each employee with a
payslip and at the end of each year a P60 End of Year
Employees Certificate. A Payroll Software package will
satisfy both the legal requirement and the employee's
requirements. Failure to provide employees with payslips
can only reduce the respect hat employee has for his
employer. Every employee must receive a payslip that shows
the amount of income tax and national insurance deducted
from the gross pay. Every employer must also calculate the
employer's national insurance contribution. Employers not
using a payroll software package such as available from DIY
Accounting Payroll Software must design their own payslip
to give to employees to satisfy legal requirements.
In the UK producing a weekly or monthly payroll can be a
burdensome task to comply with the HMCE requirements. HMCE
provide much expertise advice in this area both via their
website and each year through the distribution of the
Employers CD-Rom. To fully appreciate all the
technicalities and complete all the correct documents such
as the P11 Deductions Working sheet is time consuming. It
doesn't have to be a problem. Payroll Software can automate
this knowledge and functions and is available at
insignificant cost. The DIY Accounting Payroll Software
package is available for five to twenty employees at a cost
of £15 to £25. That is a payroll software package that
could save a small business over an hour a week, for twenty
employees more like two hours, for less than 50p per week.
All small business owners should at least consider suitable
efficient payroll software.
Many payroll software packages are written using databases
and can put many small business owners off using them due
to both the cost and the fear of the unknown complexity of
using such a payroll package. Many payroll software
packages written on a database provide an excellent
solution but have a tendency to be extremely politically
correct and cover all potential rules and regulations and
consequently become more complex to operate as they can
demand at least a minimum knowledge of the payroll system.
There are other PAYE solutions. The DIY Accounting Payroll
Software is written on excel spreadsheets requiring no
payroll experience and a minimum of entries to produce all
the essential calculations of income tax and employees and
employers national insurance. In addition excel copies of
the time consuming P11 Deductions working sheet, P60
Employees Certificate and the P35 Annual Employers Return
are all automated to save the small business valuable
administration time. A significant advantage of a payroll
software system written on excel is that it can also be
used with an open office spreadsheet package but not least
all the entries are visible and therefore transparent.
Errors and mistakes can be easily corrected simply by
changing the numbers on the payroll ensuring the payroll is
produced both quickly and accurately. Payroll Software is
an effective tool that should receive serious consideration
by all small business proprietors.
Payroll Software also has the advantage because it can be
simple and fast to use of avoiding late payments to the
revenue and the consequent unwanted letters and potential
fines this can invoke. By having all the information
required for the monthly or quarterly revenue payments late
penalties can be avoided and by producing the Annual
Employers return on time small business owners can submit
their returns online and receive a tax free online filing
bonus. The current online foiling bonus being £150 and
substantially more than the payroll software might have
cost. And it's Tax Free. As they say in Yorkshire. "If thar
you ever gets owt for nowt, Tec it"
----------------------------------------------------
Terry Cartwright designs Payroll and accounting Software
packages for small top medium sized businesses at his
website DIY Accounting
http://www.diyaccounting.co.uk
with Payroll Software packages for 5 to 20 employees at
http://www.diyaccounting.co.uk/payroll.htm
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