Payroll Management for Small Business Owners

Payroll Management

Payroll Management

Payroll is yet another important task for the small business owner. It is possible to do payment runs yourself if you have a small business, but the problem comes with calculating National Insurance and PAYE deductions. Unless you are fully up to speed on such financial technicalities it is very easy to make mistakes and pay your staff too much or not enough. Reclaiming overpayments is not as easy as it may sound, and can have a very bad affect on staff morale.

This guide explores the basics of setting up a payroll system. Please note that this is a business IT guide and we strongly recommend that you seek professional advice when dealing with accountancy related issues.

The cost of a payroll system can vary.

You may find that your accountant will process your payroll as an added value service for no charge, if you have one or two employees. As you grow you will need to invest in a payroll system, and for most small businesses the best route would be to an outsourced solution, leaving the technicalities to payroll experts.

An outsourced payroll system will often be priced on a monthly administration fee plus the number of payrolls processed in each batch. There may also be a charge for setting up the payroll system.

By implementing a payroll system you will save time and money by improving your efficiency and effectiveness of your staff payments.

What is a payroll system?

A payroll system is a computerised payment system that automates a lot of the monthly tasks of paying staff. Once the system has been set up payments can be transferred automatically and payslips generated with accurate and detailed breakdowns of the employee’s salary and deductions.

Many larger corporations may choose to run their own payroll system in-house, so that their own computers and staff manage the payments. This is probably not suitable for small businesses that are generally encouraged to out source the solution to a third party company. This third party would complete the payrolls for many small businesses and would have the people, processes and infrastructure to manage these operations.

If I want to buy a payroll system what features should I look for?

Buying software can be a complex task. We offer general advice on how to buy software and the hardware to run it in these guides. You may benefit from reading these guides first.

Typically a small business payroll system will have the following features or capabilities:

  • Employee personal records so that all of your team’s data is in one place.
  • Holiday and sickness records for all your employee absences from work and detailed reports for management purposes.
  • Payments and deductions records which are maintained automatically.
  • Year end processing for tax purposes.
  • Sick pay, maternity pay and paternity pay.
  • Holiday pay record keeping.
  • Pension contribution and tax credit records, where appropriate.
  • Student loan repayments.

Products will vary and it is important that you get the help and support you need to setup the system in the first place and then ensure it keeps running. Computer backups and data security are vital when dealing with pay issues.

More information on payroll

These sites may help in selecting a payroll partner or software for internal use;





The original article can be found here: The Business IT Guide is e-skills UK’s tool to help small businesses find and successfully introduce technology that is right for them. It offers entirely free content covering websites, selling online, marketing, security, IT trends, software, equipment, email and much more.

Is it right to move across to a cloud computing model?

Data in the clouds

Advanced 365 highlights the key factors that organisations must consider before moving across to a cloud computing model.

The hype surrounding cloud computing is expected to reach unprecedented levels over the next few years. According to recent research by analyst Gartner, CIOs view the cloud as their top technology priority for 2011 and it expects the number of organisations using on-demand computing to rise to 43% within four years.

Despite being lured by the prospect of achieving significant cost savings and efficiency gains, not all organisations are ready to embrace cloud computing and some lack an adequate contingency plan in the event of it all going wrong. Neil Cross, Managing Director of leading managed services and cloud computing provider, Advanced 365, says that businesses should consider the following key factors before seeking to introduce cloud computing as part of their IT strategy.

Determine what you want to achieve and why
IT is about delivering improved business services, not just on ensuring the smooth-running of technology, so make sure you understand what you want to achieve as an organisation and why. Both public and private cloud options should be thoroughly reviewed alongside non-cloud alternatives with the benefits and drawbacks of each being given fair consideration. Moving to cloud computing just because it’s the latest buzz in IT isn’t a good enough reason and your project is likely to fail.

Understand your business drivers as well as the IT drivers
The pressure to achieve efficiency savings may encourage more IT teams to look at moving to a cloud computing model. However, it’s essential that any changes made to IT infrastructure are suited to the needs of the business first rather than being modified to fit the IT department’s preferred cloud platform.

Fail to prepare, prepare to fail
It might seem obvious, but make sure you plan thoroughly and decide how your chosen cloud solution is going to be integrated, managed and monitored. Although it’s possible to access ‘on demand’ cloud services in a matter of minutes with the aid of a credit card, you should not become complacent about the level of planning that is required to ensure that your project is a success.

Reducing complexity is as important as reducing cost
Compared with managing your IT systems exclusively in-house, cloud computing may not be a cheaper option due to the additional costs of accessing cloud services on-demand and having to retrain your staff. Introducing a new cloud supplier to your business could also create more management complexity into your IT infrastructure if you’re uncertain as to how this supplier will be managed and how you are going to link your various applications together.

Think about the risks
Though cloud computing brings undoubted business benefits, organisations also need to consider carefully the potential risks. Is your data going to be held safely and securely on the cloud and are you satisfied that your cloud supplier is reliable and experienced enough to provide your business with the necessary service-level provision you require?

Choose the right partner
It is essential to work with specialist cloud partners that can manage their services in line with your organisation’s requirements. Check that your partner can provide you with an end-to-end service combining service level management, service desk facilities, remote monitoring, advanced reporting capabilities and complete data transparency to help minimise the risk of integrating your systems into the cloud. You should pay particular attention to whether your cloud provider’s service desks run 24/7 so that they can react quickly to keep downtime to a minimum.

Ensure your service level agreement is appropriate for your business
In the event of a business-critical application going down, you need to be reassured that your cloud provider has the expertise and skills to get it up-and-running again as quickly as possible. Ensure that your provider offers service level agreements (SLA’s) that are appropriate for your business which cover almost any eventuality. The most effective cloud partners can offer multiple SLA’s for a single customer giving the business peace-of-mind at all times.

The increase in acceptance towards cloud computing will undoubtedly lead to a surge in uptake as organisations continue to wrestle with having to make deep spending cuts. However despite the many advantages to be gained by embracing cloud applications, they do not represent a magic wand for organisations to solve existing business issues. It’s important to consider the move to cloud computing very carefully and ensure that your organisation is practically and culturally ready to gain the most from what the cloud has to offer.

You can find the original article here: The Business IT Guide is e-skills UK’s tool to help small businesses find and successfully introduce technology that is right for them. It offers entirely free content covering websites, selling online, marketing, security, IT trends, software, equipment, email and much more.

‘Britain is Open for Business’: Insights from the Budget

The media has inevitably been focusing on the changes outlined in the Budget recently, where we heard the Government’s intention to ‘Make Britain the best place in Europe to start, finance and grow a small business.’ George Osborne made it very clear that the Government recognises the potential of small businesses to boost the British economy, which can only be a good thing.

Key measures outlined were firmly aimed at progressing this vision, including a reduction in corporation tax and an increase in credit available to small business owners. Some of the most significant steps include:

  • The arrival of 21 new ‘enterprise zones’, These are eagerly anticipated by those in relevant areas, with the promise of superfast broadband for these areas proving popular.

Some reactions of entrepreneurs to the measures, who generally welcome the proposed changes, can be found here.  It’s clear the Government has good intentions, but we’ll wait to see how achievable its vision for growth really is.