Payroll management is important for ensuring that employees are paid properly and on time, that you are deducting taxes and pension correctly, and for keeping up with payroll reporting. For this reason, most businesses, small and large, need some sort of professional payroll management, but the best option for your business likely depends on your specific needs. Payroll management options vary from accountants to bookkeepers to payroll clerks, or even software, and the right one for your business varies based on the business.
Whether you’re outsourcing payroll or looking for a cost-effective in-source tool, you can consider the following options.
What’s the Difference Between a Bookkeeper and an Accountant?
Bookkeepers and accountants have similar jobs, but they do have different services and qualifications. Accountants are trained to handle a wide variety of accounting services, for individuals as well as businesses. Bookkeepers largely handle business transactions such as purchases, assessment, record keeping, and reporting. Accountants create information with data, while bookkeepers usually log data. You should only hire certified accountants or bookkeepers, because there are no education requirements for those who are not certified. Both accountants and bookkeepers may handle payroll, but sometimes do not.
What is a Payroll Clerk?
A payroll clerk is a professional who specializes in handling payroll, issuing payslips, making tax and pension deductions, and calculating wages based on hours worked. This is beneficial to businesses, because it ensures that the payroll is done properly, according to regulation, and by an expert rather than someone who is less skilled in payroll, but qualified in other accounting and bookkeeping as well. However, it can be expensive if you choose to insource, because the clerk only handles one part of your accounting needs. For outsourcing payroll, a clerk is the best way to go in terms of professional expertise and quality, because while clerks are required to have experience with payroll and numbers, they hold fewer qualifications than accountants, and are therefore more affordable to hire.
Payroll software can help you with keeping up with deductions, amounts, wages, and hours worked, and usually helps with tracking a great deal of different data. This can cut down on the amount of time you spend each month on payroll, and with cloud features, you can sometimes even send reports to the HMRC during each payment cycle right from the software. However, you still need someone to run it, and preferably someone who is skilled in payroll, bookkeeping, or accounting, to ensure that mistakes are not made. Software can be extremely valuable, as well as cost effective, especially if you want to insource payroll management, don’t have the budget to hire a clerk or accountant, or prefer to do the management yourself.
A payroll company allows you to outsource payroll to a professional company with trained clerks without having to insource or hire a full time accountant. This means you can pay a set price for all of your payroll services, while taking advantage of additional services, such as software, direct deposits, or professionally printed and mailed payslips, without adding to your own in-house expenses. Because most payroll outsource companies offer flat-rate charges, or use a base charge plus a small fee per payslip, companies are usually the best option for smaller businesses who prefer to use a professional rather than software.
Choosing a payroll management option is crucial if you want the best services for your money, so it is important that you take the time to compare your options. Use ABCO’s free tool to find and compare local payroll companies, clerks, and accountants to find the best solution in your area