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Why Small Businesses Can Benefit From A Payroll Software Package

Jul 26, 2008
While large organisations have the resources to devote full time members of staff to the functions of accounting and payroll administration, for smaller companies this is rarely the case. Normally in a small business the payroll functions are carried out by the managing director or owner meaning that they must devote a great deal of time to the functions when their efforts could be better spent courting new business and managing staff members.

Experts estimate that small businesses with around ten employees will have to spend around one hour a week conducting payroll functions such as calculating income tax and national insurance payments. An hour does not sound a great deal of time, but when added up over the working year it is a considerable amount. This is where having a software package that carries out payroll functions can be ultimately useful. Software not only frees up the time spent on accounting but also helps to increase the efficiency of the business and improve the accuracy of the payroll calculations.

With a poor system for accounting functions it is easy or staff members to become dissatisfied with the company as a whole. Staff members naturally expect their pay on time and in full. The production of payslips is a fundamental part of this so that staff members can keep accurate financial records. Legislation also demands that each employee receives their payslips and a yearly P60 from detailing their annual earnings. Payroll software can help companies to automate the process of producing payslips whilst also providing a readily accessible database of all pay information over the working year.

Payroll software ensures that a business meets all relevant legislation concerned with the payment of employees. Not only is it an ongoing task but due to the fact legislation is constantly being improved, staying abreast of developments can be difficult. Most payroll software packages provide the provision of CD Rom update discs to ensure that legislative changes are taken account of easily and effectively. Having this kind of service means that the headache of keeping up with government reforms is negated and employers are safeguarded from legal action.

Ultimately payroll software can work towards standardising the way a company carries out its salary and wage information. It will calculate what money is due employees and provides a fast and accurate way of crosschecking pay information. Fundamentally the right package can help a business to streamline its functions subsequently making the process more efficient. While the option of outsourcing the task is a reality, many prefer to keep pay information in-house as a more viable alternative. By having your own system a business' finances are more flexible and adaptable to change, whether this is expansion or a change in salaries, the correct software can help cope with unforeseen events.

Not all software packages are the same however; there is a large amount of variance in the quality across the market. The more expensive packages are usually better equipped to cope with changes and are essentially more flexible. For the business manager, choosing the cheapest package is rarely the most advisable course of action to follow. A package must be able to cope with change and must be flexible to a business' needs. The correct payroll software can make running a business much easier reducing the amount of time and effort spent on administrative functions. For this reason small businesses should strongly consider the worth of purchasing a well equipped and designed package.
About the Author
Business expert Thomas Pretty looks into how the correct payroll software package can improve the administrative efficiency of a business.
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