Payroll is usually a growing company’s most significant expense, yet managing it can be daunting. For organizations on the rise, scaling payroll is often a challenge, as the demands of regulatory compliance grow as headcounts grow. In the UK, companies must adhere to HMRC guidelines and rules defined by The Pensions Regulator.
Software offers a great solution to these problems. However, each suite offers varying degrees of functionality, and it can be tough to figure out which UK payroll software solution is best for you.
Here are five features that all of the top payroll apps in the UK share.
Automate data syncs with RTI and beyond
When choosing payroll software, make sure the platform is suited for UK companies. Many platforms cater to the North American market, which has different rules and regulations. In the UK, companies must choose software that pulls all data needed for Real-Time Information (RTI) transmissions to HMRC.
For instance, you will need to pull the following information before calculating an employee’s compensation:
- Your employee’s tax code
- Your employee’s National Insurance category
- Your employee’s salary
- Overtime and bonus payments
- Pension contribution deductions
A good platform also allows you to make changes until the pay date and automatically adjusts earnings and accounting entries. If it’s going to be useful in more complex workflows, your software must help you create approval processes and escalation procedures.
Evaluate the number of integrations a system offers you. At the very least, your payroll solution must plug into accounting and ERP systems. If your company is experiencing high growth, your payroll software must also connect to FP&A systems, since payroll costs play an important role in calculating capacity and headcount planning decisions.
Simplify pension eligibility processes
Offering extra generous pension schemes help you attract talented employees, but these can also pose a payroll headache. Employers in the UK can offer occupational, personal, or stakeholder pension schemes. You must contribute to the scheme and deduct the right amount from your employees’ paychecks.
In the past, running payroll while accounting for precise pension deductions was tough due to the variations in eligibility and contributions. Newer tech has thankfully solved this issue. You can automate eligibility evaluation, send letters, and automatically transmit reports to The Pensions Regulator before deadlines.
The result is less time spent chasing paperwork and validating existing employee information. In addition, you must maintain accurate records to establish clear audit trails in case the authorities come calling.
Verify if the software solution helps you design better than statutory benefits for your employees.
Many growing companies use these benefit structures to attract top talent, and your payroll platform must support this business goal.
Alert systems
A good payroll system saves you money by helping you avoid fines for non-compliance. To this end, alerts about upcoming deadlines and improper filing events are critical. For smaller businesses, HMRC’s fines can be a significant blow to their income. Larger businesses might weather a financial hit, but the brand damage might be terminal.
For starters, your payroll software should have the ability to alert you to missing or incorrectly formatted data. Some platforms alert you at the last minute, before filing deadlines, whereas better software picks these errors up during employee onboarding, notifies all stakeholders automatically, and empowers you to fix the issue before it becomes serious.
The result is your payroll team has more time to handle any errors. Superior payroll software also alerts employees about shortcomings on payslips and other important filing information. Compare this to the average payroll outsourcing solutions, and the advantages are obvious.
Make sure the platform you choose has an intuitive design that helps you set up alerts easily.
Attentive and authoritative customer support
Payroll processing needs a high degree of expertise. As such, the most valuable software solutions offer highly-trained agents who can help you solve complex issues without putting you in danger of non-compliance. Look for platforms that offer support around the clock and assistance for complex payroll queries from CIPP-qualified advisors.
The speed of onboarding is also a good sign of a platform’s efficiency. How much of it is automated, and how thorough are they when compiling your data? Check if the platform offers a product demo you can play around with before choosing it.
Lastly, how well will the software scale with your business? Good payroll solutions automatically scale with a business, giving it a readymade solution, no matter its size.
Cost analytics
Payroll is a significant cost, if not the highest, at most companies. If you’re a growing business, you likely have an FP&A team that models hiring plans and growth projections. Salaries and compensation play a critical role in measuring the ROI of such plans.
Aside from integrating with these platforms, good payroll software also offers cost variance analysis that calculates planned budget versus actual payroll costs. These analyses give your business insights into the impact of salary raise requests and changing payroll cycles.
Speaking of which, check if the software can adapt to multiple payroll cycles. For instance, you will likely pay your contractors on a different cycle compared to employees. If your payroll solution does not accommodate these needs, you risk losing highly-qualified talent.
Payroll needs a modern solution
As companies grow, they tend to outsource payroll management to vendors but this is an inefficient solution. Instead, choose the right software that helps you remain compliant with HMRC as it scales with your business. The factors listed in this article will help you arrive at the best possible choice.
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