There’s no doubt that times continue to be tough for business owners. And although energy prices are not expected to rise significantly in Jersey for at least 18 months, the island is certainly not immune from the cost-of-living crisis.
With gas bills rising and inflation on the upswing, businesses are looking to find ways to streamline their processes and increase profits to safeguard against the worst.
One way to cut costs is by nailing your payroll processes so they’re as efficient as possible.
But payroll can be a tricky beast, with serious consequences attached to mistakes potentially exposing your business to costly liability. So, where to start?
1) Do your research
The key to a well-oiled payroll process starts with doing your homework. Make sure you’ve factored in all the important payroll deadlines.
You need to be on top of these deadlines and make sure you plan for them. So, for example, you might not know that the law is changing from 1st October 2022, with all businesses now having to pay their class 1 contributions monthly.
If you have more than 80 employees, you’ll already be paying monthly, but if you employ fewer, you need to make sure the new requirements don’t take you by surprise
Managing payroll by yourself can be daunting at first. But there are some handy apps like Xero and QuickBooks that can make the process a lot simpler.
2) Get your ducks in a row
Once you’ve got your head around all the key deadlines, you’ll want to set up a separate payroll account. Things can get very confusing pretty quickly if you have payroll expenses going out of your main business account alongside all the other withdrawals.
Having a separate account for payroll means you can deposit enough funds to cover employee wages without muddying the waters with other transactions. It gives you clear sight of other expenses and helps avoid problems with overdrafts and cashflow.
Keeping complete and accurate records is a must when sorting out your payroll processes. You’ll need to decide what kind of software you’ll use.
Some businesses start with Excel, which has great functionality, if you’re up to speed with it. But as your business grows, you might want to shift to a cloud based software which has its advantages – you don’t have to back up your data, you’ll have great reporting functionality and your accountants can login easily to provide support and guidance.
Good software can also increase efficiency too. It improves accuracy and reduces the time you spend processing payroll.
It can be a steep learning curve when you start processing payroll. But don’t ignore problems when you run into them. Take time to fix them before they escalate into something bigger and much harder to handle.
3) Don’t be afraid to Grow!
As your business grows you might find you need to take on more help to process your payroll. And don’t wait until you’re at crisis point and completely burnt out before you take that step.
At that point it’s so much harder to think about your systems and train somebody up. Don’t keep your processes in your head. Start documenting them from the outset so you have clear procedures and guidelines in place for any future payroll staff to follow.
It’s easier to evolve and add to these processes as your business grows than start completely from scratch when you find yourself too busy to delegate effectively. And, with anything, as your business grows and you continue in your successful journey, you might want to reach out and get some expert help with your payroll.
We get it. When you’re starting up it can be a bit chicken-and-egg. You want to grow but you’re hesitant to commit to the cost of taking on more staff. Outsourcing this help is a muck less risky way to do this.
And we can help with that. When you need that peace of mind of knowing you’re ticking all the right boxes and hitting the important deadlines, we’re on your team to handle it all for you. Get in touch today for a chat.