One of the most vital aspects of running a successful business, but the one which is mainly subdued in its criticalness, is payroll.
Paying employees, calculating income tax, and calculating NIC deductions are vital.
If any miscalculation happens during tax calculation, it may lead to a penalty or unsatisfied employees.
As the stakes are higher here, monitoring everything associated with the company’s payroll makes sense. Read our guide to learn more about payroll processing and the role your accountant can play in your overall payroll strategy.
Table of contents
- What does payroll consist of?
- What is the importance of payroll in a business?
- The Role of Accountants in your Payroll Strategy
- Summing up
What does payroll consist of?
When you are working in the payroll department, you need quite a lot of information from your employees.
This includes their full name, permanent and correspondence address, their National Insurance number, the number of hours they have worked, their full-time salary, bonuses, other allowances, and a lot more.
You must record any overtime, sick leaves, time off days, etc. All of this is vital for calculating employee pay. The payroll contains the most information about the employee, not just the compensation.
What is the importance of payroll in a business?
Often employees consider that the payroll team has a minimal role and doesn’t have much to contribute to the company’s success.
But, in reality, it is just the opposite.
An attentive payroll team is often appreciated by the employees and creates a healthy work environment.
If the payroll team is unresponsive, the employees may turn impatient and lose faith in the company.
- Uplifts employee morale
A sound and placed payroll team boosts the employees’ morale and maintains an optimistic culture in the firm.
Employees will lose faith in the company’s financial integrity if their salary is late.
They might underperform or start looking out for alternative opportunities.
- Keeps the company’s reputation in-place
On top of the firm’s financial obligations towards its employees, it should also ensure the entire payroll processes comply with the country’s tax and labor laws.
If the company fulfills its tax responsibilities on time and adheres to the legislative requirements, it will undisputedly form an image of a trustworthy employer.
The Role of Accountants in your Payroll Strategy
- The accounts team is flexible and scalable toward your firm’s growth and law
Payroll can never be considered a one-size-fits-all activity, as no two firms are similar.
While hiring an accountant to look after the payroll, make sure they are someone who understands:
- The company’s objectives
- The business’s process
- The best practices in the industry
- The accounts team helps in defining and documenting the processes
Business owners are expected to have a thorough knowledge of the payroll processes, but some of them like to understand a few concepts due to variance in the domain.
You must maintain well-documented payroll processes and manuals to avoid disputes or ambiguity.
- They are very attentive and detail-oriented
The Accounts team is usually detail-oriented and can impact the payroll department positively.
The payroll team can use their skills and experience in case they have any ambiguity or need any second opinion on a bill or any employee’s issue.
The accountant is familiar with all aspects of the work and can give some suggestions for reducing liability and enhancing the payroll procedure.
Your accountant can assist the payroll team with the following tasks:
- Perfect employee classification.
- Sharing regular updates about tax regulations and exceptions.
- Changes in NIC thresholds, rates, etc.
- They can help in dealing with exceptional cases and resolving errors
Some instances include early resignation, withdrawal from a bond, and many such matters concerning hiring or calculating an employee’s complete and final settlement.
The payroll team must check the legalities and then process the application in such cases.
The payroll team can look to the accounts team for suggestions and a second opinion so that none of the rules are violated, and the employees are content with the resolution.
- They can help you in becoming more organized.
The accounts team can help the payroll team meet deadlines, process applications, test software, and introduce new calculation methods. The accounts team is similar to the payroll team, while all the other business sections have different activities.
If you need more clarity on the role of accounts in determining your payroll strategy, you may contact Experlu to get the best consultation regarding accounting. If you are looking for an accountant in London, you can contact us to get the best candidates with impactful skills and charge the most decent fees.
Experlu has helped many businesses get an accountant and solve payroll-related issues. You can contact us now to get a quote or clear any queries related to payroll, bookkeeping, accounting, or any other aspect of finance. We are there and happy to help!