Manage your payroll services for improved overheads

Managing payroll services is one of the most important accounting functions within your business, and not only because staff are unlikely to work if they don’t get paid. 

Although it may be a complex area, a payroll can be managed without interruption to your staff, your cash flow and you, the business owner or manager. Here’s how.

Legal obligations

When dealing with payroll, you need to be aware of your obligations under the relevant legislation, both state and federal. The best approach is to seek professional advice from a payroll expert to ensure that you are doing the right thing by your staff and also your business.

DIY or outsource?

According to James Shadbolt, Business Manager of Abbot Solutions, there are generally two options for a payroll system. If you have the time and expertise, you can do it yourself, or you can outsource to a specialist payroll company.

“If you’re a micro-business, of only two or three people, it might be appropriate to outsource your payroll services, especially if you don’t want to worry about the bookkeeping side of things,” he says.

For businesses planning on managing their own payroll, James says it’s important to properly prepare. “If you plan to DIY, the complexities are such that you should have a bookkeeper set up a software package for you,” he says.

Complexities of payroll 

Setting up a payroll system is a complex procedure, as it must take into account: 

• hours of work
• tax
• superannuation
• awards
• penalties, deductions and allowances
• annual and long service leave
• paid parental or personal leave
• sick leave accrual and payment
• pay slips and records.

All of these things are better managed using a software package such as MYOB or Quicken, says James. Both are off-the-shelf products that are very popular among small to medium businesses.

“When set up properly, these products will tick all the boxes as you grow,” says James. “You won’t need to remember when to do things, as they will happen as a part of the normal payroll process. Software packages also give business owners and managers more time and peace of mind.”

Taking payroll seriously

The biggest danger of not managing your payroll properly is losing your employees, says James.

“Setting up an effective software-based system in your business is not necessarily an expensive thing,” he says. “And the penalties for not complying with relevant laws regarding super and taxation could ultimately make your payroll bill balloon.”

Get the right advice

Phone an accountant today to find out how you can meet your payroll obligations in the most efficient and inexpensive way possible, and avoid costly penalties for not meeting your legal obligations for paying your staff.