Introduction to Payroll
One thing all businesses have in common regardless of industry, location, ownership or size, is payroll. If you own a functioning business and have employees, you’ll know the headache of managing manual, and in some cases, digital payroll systems. That’s where accounting services like Cloudworx and payroll software solutions come in. But first, what is payroll software, how can using such software benefit your business and what is the role of the accountant when payroll software is in place? Read on for a full run-down and accountant’s perspective of payroll.
What is Payroll Software?
Simply put, payroll software is a cloud-based or on-site solution used to manage and maintain employee wage payments automatically. In addition, and when implemented and configured correctly, payroll software can be used to assist a business in maintaining compliance with tax laws among other financial regulations.
Manual Payroll Systems & Why You Should Avoid Them
Manual payroll refers to the traditional, pre-digital era means of processing and managing employee payments. These systems existed independently of software and computer-based technology. Although they did work for the longest time, with the rise of our dependency on, and integration of, technology into our everyday business processes, there’s no denying that manual payroll systems are outdated and ineffective by comparison. The key disadvantages of manual payroll systems are as follows:
● There’s a large room for human error
● It’s a time-consuming process that involves a lot of back and forth between the
accountant and the business owner
● You’ll need to hire a full-time in-house accountant if you don’t want to outsource
● Data isn’t available in real-time and reports will not be available right away. The biggest accounting headache business owners encounter is simple ledger mistakes because of human error. These mistakes are unbelievably common when ma nual practices are
in place. But the good news is that the more you automate your payroll system, the fewer mistakes you’ll encounter and the smoother your payroll processes will become.
3 Payroll Best Practices When Using Payroll Software
Everyone with payroll experience will tell you their own version of payroll best practices. However, when a payroll software system is in place, the best practices become a bit more complicated. As seasoned accountants with a wealth of payroll management experience, these are our three recommended best practices to consider when implementing payroll software:
1. Create Written Policies & Keep Record of Everything
Written policies have a lot to do with your payroll system because they indicate what your staff can and cannot do, especially when it comes to overtime and paid or unpaid leave. When your policies aren’t formalised and communicated, it becomes easy for miscommunication and unmet expectations to arise. Creating written policies is the best way to ensure that this doesn’t
happen. Keeping a paper trail of email communications between you and your staff, as well as you and your accountant regarding salaries, overtime and leave applications is the best way to ensure nothing slips through the cracks. When you keep these sorts of records, settling disputes becomes easy.
2. Allocate Sufficient Budget to Payroll Management
Cash flow is often a concern for small business owners. But skimping on your payroll management budget can only be detrimental in the long run. Try setting aside the proper amount for your payroll management system ahead of time, as well as the amount allocated to
staff wages. This way, even when you’re having a bad month, you’ll know that your staff’s salaries are covered and your accounting is done correctly.
3. Keep Track of Payroll & Tax Deadlines
As you may well know, SARS set strict deadlines for tax submissions and as a business owner, you cannot afford to miss these deadlines because you simply forgot. After all, what’s the point of collecting and completing your employees’ payroll information if you miss the submission deadlines? Keeping track of these deadlines via reminders and digital calendar events is a great way to ensure your business is functioning above board. It’s even worth speaking to your accountant and deciding together on a method for remembering to meet these deadlines.
Benefits of Payroll Software
Aside from streamlining your payroll system and saving you an obscene amount of time, implementing a payroll software like Karbon Pay or Simple Pay will benefit you in the following ways:
● Cloud-based payroll software includes data security
● Easy to use without prior training
● Can be integrated into your accountant’s preferred software, like Xero
● They won’t break the bank
● Accurate calculations with little to no room for error
● Payroll software will help you actually understand how payroll works
● Productivity is increased and time is saved
● Reports are generated with ease
● 24/7 customer support is a major plus
What is the Role of an Accountant in Payroll Management?
Every business needs an Accountant. But the extent of the Accountant’s job description is all dependent on the needs of the business and the software or systems that are in place. When you’ve employed software to manage your payroll, your accountant won’t be responsible
for your payroll. They will simply integrate your choice of software into their accounting software and use your recorded payroll data to complete their tasks. At Cloudworx, we partner with our clients to meet their accounting needs on time and in real-time. Although we can manage payroll on your behalf, we do recommend that you employ an easy-to-use payroll software, such as Karbon Pay or SimplePay to manage it for you. These
systems are expert-approved and trustworthy, and most importantly, streamline the payroll process for both of us.
Want to learn more about payroll management software? Book a call with a Cloudworx Accountant today, and we’ll take you through the process of getting set up.
Cloudworx, Accounting for your Peace of Mind.