There's no getting away from it. Payroll is complicated. And because it involves people's money, you can't afford to get it wrong. It makes a lot of sense to hand it over lock, stock and barrel to an experienced bookkeeper, or at the very least make certain you do it right yourself, first time, every time.
The first step to payroll excellence is knowing what can go wrong if you slip up. It's sobering stuff. Take a look online and you see how the simplest payroll errors cost businesses a fortune in fines and penalties, plus damage to their brands and bucket-loads of corporate embarrassment.
Take one case in New Zealand, where a brand new payroll system designed for the country's 110,000 teachers, which took seven years to build, failed quite spectacularly. Amongst other things it sent personal information including bank details to the wrong schools, paid one teacher for 39 days when they'd actually worked 39 hours and overpaid one woman by 39,000 New Zealand dollars. At one stage more than 14,000 teachers and support staff were owed $12 million in back pay. It took a whopping $45m to fix the system.
At home in the UK, Lincolnshire Police's payroll people got it wrong, leaving hundreds of Community Support Officers unpaid. It was all down to problems with calculating changes in shift patterns. And more recently, Debenhams was fined £63,000 for a basic payroll error. Ouch.
There's a whole lot more that can go wrong. Just one small mistake can leave staff overpaid or underpaid. Plus there's a raft of rules and regulations to stay up to date with, as well as all manner of fines levied against you for mistakes, including late filing penalties, end of year penalties, penalties for inaccurate in-year submissions, late payment of PAYE and late submission of in-year returns. And that's just for a start.
Some small business owners find it very hard to hand over their payroll, or anything else, for that matter! If you fall into the 'control freak' end of the spectrum, it's sensible to ask yourself, honestly, whether you're really suited to the task and have the time, patience and dedication to get it right first time, every time. If the honest answer is 'no', it's better to hand the whole thing over to people whose job it is to handle payroll, and who know the system and the law that supports it inside out.
If you want to do it yourself and are determined to get it down pat, you'll find all the information you need here on the gov.uk website (https://www.gov.uk/running-payroll/overview).
Aben Bookkeeping is a Lewes based bookkeeping service based in Lewes. We provides bookkeeping services, including payroll to clients from Lewes, Brighton, Worthing, Shoreham, Newhaven, Seaford, Saltdean, Rottingdean and Woodingdean.
For more about our Payroll services see http://www.abenbookkeeping.co.uk/payroll