Handling Payroll for Small Businesses
Many small businesses have just a few employees on their payroll. However, even if you have just one employee, you should consider professional payroll services. You need to make sure that you follow the law to the letter to avoid any problems.
Here are some options for handling payroll for small businesses.
It is possible for you to handle the payroll, especially if you only have one or two employees and they get a simple monthly salary. However, you still need to know all about the pay as you earn or PAYE tax system. You need to make regular reports to the HM Revenue and Customs (HMRC) every time you pay your staff.
In addition, you should know about the insurance requirements for your size and type of business. The biggest problem with this is you have to follow strict deadlines, and keep up with all the changes. It may be just one more task you do not need as a business owner juggling many things.
You can also try buying payroll software to help you, Fetcham’s Accountancy & Tax Advisers Ltd suggests. You still need to input the information for your employees, but it can automate the process for you. The problem is still the same, however. Software will not monitor changes in the law, and is only as good as the data it has. You could still get in trouble for failing to keep up with the changes.
You could hire someone to handle all your payroll needs, and keep up with changes in the law. However, it would not be practical to hire someone to do that full time. Your best option is to keep an experienced accountant specialising in payroll on retainer. You only have to pay a small service fee to have an expert manage your payroll effectively. The fee you pay depends on the number of people on your payroll. You can consider hiring someone full time when you have enough employees to make it practical. Until then, you can keep your costs, and payroll problems, low by outsourcing the job to a professional.
Payroll services are a small but important part of your business processes. The most practical solution for a small business is to outsource it to an experienced accountant or payroll service provider.