Cloud Payroll Software, Online Payroll System and Payroll Services
Payroll can be a headache for any small business owner. Paying employees, calculating wages, commission, bonuses, taxes and HMRC checks can take it’s toll. Combine that with an outdated payroll software, repetitive tasks and hours of manual data entry and you’ll soon be looking for a better way to do things.
Online accounting software for your small business!
Payroll is a highly important task, however with a clunky system no matter how much care is taken, there’s still a chance mistakes will be made. Everyone makes mistakes, however the knock on effect can ruin the relationship, morale and loyalty of your staff. In some cases the damage is already done, so ideally you want to get your payroll right first time, every time.
Outsource payroll services
Traditionally payroll software or payroll systems haven’t been particularly user friendly and if you’re the one that gets stuck with this task then it can become a bit of a chore. Typically most small business owners are rushed off their feet and payroll is definitely something you don’t want to be doing in a rush, which is why many outsource payroll to third parties or have an in-house team to manage the workload.
This is of course a more convenient option but remember you’re passing commercially sensitive information to an external business which can open up a whole can of worms regarding data protection laws. If you do choose to outsource payroll then you’ll find yourself in a strange situation where you’re paying someone to calculate how much you need to pay other people, which is bizarre!
Legal requirements for payroll UK
UK businesses also have payroll legal requirements and obligations to abide by, such as keeping track of what is paid to staff and the deductions that are made, reports and payments made to HMRC, employee leave, sick leave and absences, tax code notices, taxable benefits and any expenses. You’ll also need a record of your payroll giving scheme documentation, including agency contract and employee authorisation forms.
You must report accurately and keep a copy of these records for 3 years from the end of the tax year they relate to. HMRC may check records to make sure you are paying the correct tax amount and if full records are not kept then HMRC may estimate what you have to pay and charge you a penalty fee of up to £3,000. Which is a lot of money for any small business.
How to improve your payroll process
With recent developments in technology, one option is to switch to a cloud based payroll software. A cloud based software is where the application is run and stores data on the internet.
Benefits of cloud payroll software
There are a few key benefits to cloud payroll software and online payroll systems for any small business considering the switch. Whilst features differ between each software developer, we’ve listed the benefits you could expect from Xero’s online cloud payroll system below.
Cloud payroll software clearly documents and backs-up files in the cloud. That means all your payments, deductions and other records are stored securely online, are accessible at any time on any device with internet access and can be easily produced should you have an HMRC check. This should speed up the audit process, help avoid any hefty fines and ensure you’re complying with UK employer reporting regulations.
An automated payroll system will minimise mistakes and free up your time by automating payments to employees, tax authorities and third parties. This will allow you to focus on other areas of your business as well as reducing errors, therefore keeping staff happy on payday.
If you’ve previously outsourced payroll then you can make considerable savings and stay in full control of your data, minimising any data protection risks. Alternatively if you manage the payroll yourself or employ a dedicated in-house payroll team then you will see saving on salaries, overheads, desk space, benefits and other employment costs.
Best cloud payroll software
There are plenty of payroll software packages to choose from. Quickbooks, Sage and Xero to name a few. Ideally you want a cloud accounting software that’s capable of evolving with your business. Xero online accounting software has payroll functionality built in allowing you to edit employee information and add new employees as you go, so it’s built to grow with your business.
Xero cloud payroll software costs
With Xero you select a plan that suits your business and then add the payroll elements you need. All Xero plans include up to five payroll employees free of charge for six months. After this period payroll pricing is from £5 per month, plus £1 per month for each additional person added to a maximum of 200 people.
Xero plans as of 1st February 2017.
Starter – £7.50/mo for initial 3 months – then £10.00/mo
Standard – £16.50/mo for initial 3 months – then £22.00/mo
Premium – £20.62/mo for initial 3 months – then £27.50/mo
Free 30 day free trial