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Blog | Able Accountants Birmingham

payroll tips able accountantsWhen you're dealing with people's pay as part opf a payroll service, it’s serious business. Staff costs are often the largest cost of any business, and therefore a huge issue to get right from a business accounts perspective. From an individual's point of view it's also key, as this is their reward for their hard work within the business, and any even slight error can cause considerable concern and frustration on their part.
 
It therefore needs to be right, and within a confusing world of regulations and adjustments this can be a challenge. But here are a few pointers to help steer you in the right direction, they're not exhaustive but designed to help establish the basic principles.

1. Get the Basics Right 

This is almost too embarrassing to mention, but for the sake of completeness it needs to, and that’s to make sure your accounts match the reality of people's situation.
 
So check that the right salary level is being used, particularly after any review or changes to employment, and clarify any exact start and end dates of employment. 

2. Bring in the Taxes

You can't get away from paying tax in a lot of cases unfortunately, and payroll is certainly one where you do. 
 
Therefore get this bottomed out as to how and when this is deducted, what exact amount and tax band is used, and any special adjustment like p11d for this.
 
On a related side is national insurance, and although for a different purpose, this uses similar principles.
 
From an individual's perspective, they may need to be reminded that they need a separate tax return for their own personal income and investments in addition to their employment which has tax automatically resolved at source.

3. The Tweaks and Changes

So as you're dealing with individuals, they may well have unique situations to accommodate, whether that's benefits to account for or maternity cover and sick pay to arrange.
 
Make sure this is clearly documented and confirmed beforehand, and then communicated to all the right channels.

4. Simply Pay the Money

Again this is painfully obvious, but all so important as people's own personal financial situation is shaped by literally receiving the money.
 
So agree strict and regular time frames for this, with all other tasks often on hold for this. Clarify how this isn’t then paid, often direct into bank accounts of course, but you may be dealing with other payment methods as well.

Don't Pay the Price for Ineffective Payroll Services 

Therefore when looking at payroll services, whether you're in the thick of providing these, or involved in overseeing  and instructing others to do, always begin with some common sense and realisation that at the end of the day you're dealing with real people's money and lives.
 
Then build up the accounting truth with all the adjustments and processing that is needed, all ending in a completely accurate and reliable service.
 
And who's knows, maybe even a few bonuses as well.

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