Payroll refers to the financial records kept by companies in respect of their employee’s salaries. This will include their regular salary, bonuses, or other one off payments they receive, and deductions such as tax and national insurance.
Payroll is a vital part of the operation of almost all companies. Payroll often represents one of the biggest areas of expenditure within a company, and as such it requires a lot of focus and commitment so that the process is done properly. Of course, the main point is that paying employees on time is a key obligation of a business, while the impact payroll can have on a company’s revenues and profits is also a big aspect.
Companies can decide whether to carry out their payroll operations in house or to outsource it to a specialist payroll company or accountant. Although employees will typically be paid on the same day each month, payroll processing requires a permanent, full-time workforce working on it continuously. This ensures that errors with employee payroll are minimized and that they pay the correct tax, for example.
The resources required to carry out a full payroll operation are massive. Outsourcing payroll to an accountancy firm or a payroll bureau, even if a company has a relatively small workforce, can save a lot of money and time with regards to everything from recruitment and training to computer systems. Outsourcing to a professional company also reduces the likelihood of any errors occurring, and enables businesses to have a much clearer picture of their overall finances, while being one less department to have to worry about for business leaders!