With payrolled employees on the rise, we look at the importance of payroll. Payroll impacts all areas of business. Employees are arguably the most important part of a business, the person the customer communicates with, the person who makes your products and if they are not paid correctly or on time, they are not going to be an unhappy employee and the relationship between employee and employer becomes damaged, employee motivation and mental well-being will suffer. Employer review websites easily allow employers to be exposed for poor payroll processing. Poor ratings on these increasingly influential websites will have a significant impact on future recruitment.
Cashflow is another area impacted, payroll errors can lead to more tax having to be paid and an increase operational costs if HMRC do not receive the accurate information on time, there are heavy fines to pay.
In a recent survey by Zellis, over a third of participants stated they were not convinced they understood their wage slip enough to see an error.
So, what is the answer?
In house payroll is expensive; staff training, software costs, time taken to calculate payroll, creating tax documents, holiday and sickness cover, staff costs all adds up. Outsourcing payroll is often a money and time saving option. If you add up the costs of an in house payroll function you would be surprised that in a lot of cases, outsourcing is not only a cheaper but also a more reliable option.
With anyone able to start their own payroll practice it is important to check their qualifications, memberships and insurance. We are members of The Chartered Institute of Payroll Professionals (www.cipp.org.uk), the Institute of Certified Bookkeepers (www.bookkeepers.org.uk) and Association of Accounting Technicians (www.aat.org.uk) and with over 16 years experience, you can rest assured we know our stuff!
* The study is based on 2,010 online interviews with employees across the UK and Ireland