How payroll software benefits small businesses

Payroll software has extensive benefits for small businesses. Different software packages can be used to keep track of pay records and tax deductions. The process of releasing payments can be partly automated, and figures from timesheets can be processed through a database. 

In this way, a small business can establish an infrastructure for handling a staff budget. Operating costs can be lowered, and staff motivation can be kept high by reducing human errors and delays in payments. 

Most payroll software packages come as either proprietary programs that are bought from third parties, or in house programs that are tied to a virtual network and other forms of accounting software. Having a system in place that best suits the needs of your small business will mean that payroll and general staffing issues can be simplified. These benefits are developed below:

1. Straightforward Procedures

Once a payroll software program is set up, staff details can be entered, and broken down within a database to reflect different pay levels, bonuses and any deductions that are specific to their situation. IRIS Payroll software is typically designed for use by non-accountants, and often just involves inputting data on a regular basis, and generating pay slips and other forms throughout the month. 

For a small business, a few starting records can be expanded into a larger system as employee numbers grow, and it becomes necessary to keep track of specific staffing histories and outgoing payments. Without the budget to hire a dedicated HR officer, a small business can rely on software to reduce day to day inputting.

2. Working Out Deductions

Payroll software is also essential if you want to keep on top of complex deductions and tax. These might take the form of National Insurance and income tax deductions, as well as student loan repayments. Once this system is set up, it is possible to update databases to reflect changes in tax bands, while also generating P45, P46 and P60 forms. HMRC provide the option of using their own PAYE software for employee tax in the UK.

3. Managing Forecasts

Another benefit of payroll software is that it can be used to generate staff budget forecasts for future financial quarters and previous years. This information can be compared to a general business budget to see how the cost of staffing relates to a small company as a whole, from bonuses to cuts.

4. Employee References

It can be hard to keep track of employee records when you’re starting a new business, especially when it grows larger. Keeping performance reviews and data stored via software means that you can access and explore employee information in seconds. Performance reports and references can be provided to new employers based on this information, allowing you to track deductions due to persistent sickness and days off.

5. Building a Reputation

A small business will suffer if it doesn’t treat its employees in a professional way. Employees that have delays in their salary, or that receive mixed up tax information, will quickly lose motivation and even resign if they decide that there are mistakes higher up in the company. Getting payroll right through software means that your small business can be as efficient and professional as possible as it starts to take on more employees.