The illusion of control over payroll21st July 2021
What would you do if you got to work one day...
...And discovered that your company has been over-deducting national insurance payments for your employees, for the past few years?
That’s the exact situation in which one acquaintance of mine found himself last year.
Instead of focusing on growing his business, he’s been forced to devote the last few months to sorting out the mess...
...Working out how the mistake occurred, how many people were affected, how much money is owed to them and how on earth they’re all going to be repaid. And of course, coordinating all this with HMRC.
It’s a very serious complication to his business.
The tragedy is, this situation is not uncommon.
If you’re like most companies, payroll will be one of your biggest expenses, so it’s crucial that it’s run smoothly and that you’re in full control.
Yet so much can go wrong, especially when you handle it in-house and payroll is managed by people who are not experts.
On the technical side, it’s easy to set up the system incorrectly... to input the wrong information... to deduct incorrect amounts... or for autoenrollment in pensions to be mishandled.
Then there are the legal issues. To run payroll correctly, you need to stay up-to-date with lots of changing legislation around tax and pensions. And during Coronavirus, there was the added complication of applying the ever-changing furlough rules.
If you get any of this wrong, you can get caught up with years of wrangling with HMRC, and end up in financial trouble. You can so easily destroy trust with your staff, too.
This makes payroll one of the biggest risks in your business.
The problem is that as the employer, you’ll probably never see any of this happening until it’s too late.
You might feel “in control” of payroll if you insist on pressing the final “go” button before staff are paid each month. But that’s really just an illusion.
By that point, there may be serious errors already baked into the system which you just can’t pick up on. If you’re not a payroll expert, there’s no reason why you’d ever notice basic mistakes like national insurance being over-deducted.
And chances are, your payroll software doesn’t help either. It might be useful for your team, but most common systems just don’t show clearly what’s happening with payroll at every stage, or flag up what next needs to be done and what needs double-checking. It just doesn’t give you easy clarity.
That’s why we help many of our clients with their payroll.
Getting this right is part-and-parcel of good financial management. You can’t plan your finances properly, maximise your profitability or grow smoothly if one of the biggest expenses in your company is managed erratically.
So just as we recently upgraded our accounting software, we recently upgraded our payroll management software to a world-class, leading system called Brain Payroll.
This is a very powerful system which is specifically designed for companies like ours which are managing more than one payroll at once.
We chose it because we loved the intuitive way in which it shows exactly what’s happening with payroll at every stage, making it far easier to pick up on problems and giving excellent visibility.
It’s also extremely secure, which is becoming increasingly important.
“Normal” mid-sized companies wouldn’t usually be able to afford the capabilities offered by Brain Payroll.
But that’s just one of the advantages of working with an outsourced finance department like ours. You get access to sophisticated systems and processes which larger companies take for granted, when you’re much smaller.
And of course, this comes with the other piece of the puzzle - our expertise.
It is literally our business to stay on top of all the relevant legislation and changing regulations, so that your payroll is always applied correctly.
The companies working with us find it an enormous relief to be working with someone who can guide them through this complicated maze.
You don’t have to work out by yourself how furlough payments are applied this month or how to adjust pension payments when the legislation changes - that’s what we’re here for.
So if you’re finding managing your own payroll cumbersome and time-consuming...
And you’re worried that you could get in trouble in future, because payroll is not being managed completely smoothly...
Why don’t you get in touch with me right now.
Managing payroll is just one of the ways in which we can upgrade and professionalise your financial management, helping you grow much faster and more smoothly.
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