Payroll management is a central part of running any business. Unfortunately, it gets complex in a hurry as your company grows. UK companies are particularly vulnerable to mismanaging payroll due to the raft of changes HMRC has undertaken in recent years.
So what benefits does payroll software for the UK offer companies? Here are a few of the most important ones.
Reduces Payroll Processing Expenses
Payroll is usually your biggest expense when running a company. Companies have a tendency to overlook processing costs, since they are often invisible. For instance, the most common payroll processing cost is the time your staff spends ensuring employee information is correct, printing filings, and manually posting them to HMRC.
With the recent changes the regulator has made to its filing system, companies must now train their staff to navigate HMRC’s portal and make sure every filing reaches the government on time.
When these processes are not backed by a centralized electronic database, your employees might spend an inordinate amount of time searching for information, verifying, and filing it. While small companies can get away with these processes, fast-growing companies will face several hurdles.
Outsourcing payroll won’t help these companies either, because their employee base will change too quickly for a third party service provider to keep pace. As such, these companies risk fines and other compliance issues if they choose manual methods over software.
Dedicated software automates filing and other data verification tasks, helping companies run a lean payroll department. The result is cost-effective payroll processing that doesn’t pose growth hurdles.
Automates Filings and Ensures Compliance
Regulatory filings have grown more complex in the UK. Employers must file information on PAYE before deadlines or risk fines. HMRC hiked the interest rate on late fine payments, further increasing the costs of non-compliance.
Payroll software automates filings and all the tasks that come before it. Your HR department can run itself, without any need for vigilant management, as is often the case with outsourced payroll service providers.
Payroll platforms link employee onboarding to salary payments seamlessly, ensuring data like employee statuses and compensation formulas are up to date. You won’t have to spend time updating or validating employee status data.
The time saved from avoiding this exercise is significant. In the UK, employees can request flexible work arrangements. While critics say the law falls short of granting employees full flexibility, the law currently complicates payroll filings for employers due to the different worker statuses attached to it.
Automation is the best solution for companies that attract talent through flexible work arrangements, and payroll software is tailor-made for these purposes. You can create the best work model for your staff safe in the knowledge that your payroll system will remain compliant.
Also read: How Much does Outsourced Payroll Service Cost?
Secures Data Per Industry Standards
Data security is all-important in the UK, and payroll data is particularly sensitive.
Your payroll service provider holds personal information like identification numbers, addresses, and bank details. Any leak of this data can lead to identity theft or fraud, and if word gets out, this will create a negative brand perception in the market, jeopardizing your chances of attracting top-tier talent.
Payroll platforms are built with technology in mind first. This means their cybersecurity postures follow the industry’s highest standards. Thanks to most of them being present on the cloud, your payroll software will automatically update itself to ensure your data is always protected.
While the UK’s cybersecurity laws are currently a patchwork of primary and secondary legislation, the government is constantly reviewing and updating the requirements. Companies can expect further changes shortly, and choosing a platform that takes cybersecurity seriously is critical.
Facilitates Strategic Decision-Making
Fast-growing companies routinely model their growth paths using different financial data. Payroll expenses are a critical input here since they’re the biggest expense a company incurs.
The tax implications of an employee’s payroll status also trigger different growth implications.
A payroll software platform that integrates with different financial projection and planning platforms can give your executives a clear picture of growth. Your financial planning teams can avoid importing spreadsheets, translating that data into readable formats, and uploading it all manually to their software.
The result is accurate growth projections that update in real-time thanks to the payroll software’s integration abilities.
Simplifies Employee Tax Filings
Most companies focus on filing taxes before their deadlines but pay little attention to the hassle their employees face. Employees often have to go back and forth with their companies’ payroll departments to retrieve records, filing statuses, and other important documents.
This can cause downgrades to your employee experience, which, in turn, devalues your reputation as an employer of choice.
Payroll software can help your employees self-service, saving your payroll department time. It also centralizes all employee data in an easily accessible platform, giving employees all the information they need at the click of a button.
The result is easy employee filings and a great experience that helps them avoid any late filing deadlines.
Payroll Software Is the Way Forward
Payroll software adoption offers UK companies plenty of advantages. From better employee experiences to easier integration with broader financial systems, payroll software is critical to the success of high-growth firms in the UK.