Payroll processing is a critical business function, but it can be a time-consuming, stressful job. Payroll teams are acutely aware that errors can negatively impact cash flow, tax, compliance and employee satisfaction. How can you reduce that pressure and improve the way your business manages the payroll process?
In this second instalment of our better payroll blog series, our expert panelists tackle your questions on managing the Christmas payroll stress and whether outsourcing is the right strategy for field service businesses.
- Is there an easier way to manage payroll over the festive season?
- Should my field service business use an outsourced payroll service?
- What should I look for in an outsourced payroll service?
- What are the benefits of reducing manual payroll processes?
Tracy Ebbetts and Matt Halliday
Solvere Cloud Accounting
Is There an Easier Way to Manage Payroll Over the Festive Season?
The end of the year is busy as teams wrap up their task lists, but the payroll team carries even more responsibility. They want their colleagues to head off on their holidays with a healthy bank balance. And that can lead to late nights spent crunching numbers, whilst everyone else is off enjoying the staff Christmas party.
“It’s really easy for payroll staff to feel overwhelmed at the end of the year.”
Sllick co-founder Rob Davidson recounts a past experience working with a business that had a large payroll.
“The person responsible would get very stressed out every single Christmas. She had so much work to finish up that she would end up going into the office during the Christmas to New Year period.”
“What I learned from that, is that it comes back to being proactive and having good processes in place.”
“Be clear to everyone when you are going to finish work for the holiday period. Set the guidelines and make it crystal clear to everyone what the final date for timesheet submissions is.”
“Be strict that if they miss the cutoff date, it will go into the next month’s pay cycle. Otherwise, you will get locked into a cycle of rolling back and reworking the payroll repeatedly as more changes come in.
Should my Field Service Business Outsource Payroll?
In the 2021 Getting Paid In America Survey for National Payroll Week, 64% of workers admitted they would find it difficult to meet their financial obligations if their pay was delayed for a week.
According to Davidson, the burden of that responsibility can’t be emphasised enough.
“When people aren’t paid correctly, it can have a massive negative impact on your business.”
And if it’s not their full-time job, [the payroll person] may not be comfortable with the responsibility of making sure they pay colleagues correctly. And what happens if your only internal payroll person gets sick or takes a holiday?”
In the early stages of a business, that person is often the owner. Kunal Topiwala from SME Financial explains that at some stage in their business’ growth they must evaluate their workload.
“When they’re getting to around ten employees or more, they’re likely to want to invest more energy into their marketing and branding to get their company’s name out there. They can be creating wealth, they can be bringing in customers. They don't need to be doing the payroll at that point in their business’ growth.”
But it’s not just growing business that can benefit from third-party services according to Davidson.
“Outsourced payroll is typically the best option for the vast majority of businesses, especially since most businesses don’t have a dedicated payroll team.
Oftentimes the person who manages payroll internally also manages the purchase ledger or sales. As a result, they don’t have time to keep up to date with legislation or changes around pensions.”
Matt Halliday from Solvere Cloud Accounting echoed the difficulty that businesses encounter with staying up-to-date with the rules.
“Payroll is hugely legislative. Everything from award wage interpretation to set up requires professional assistance.
In this day and age, due to cloud environments, it is more secure and offers improved accuracy if a specialist firm looks after payroll.”
How Should I Choose a Payroll Service?
Davidson understands why a business owner might be hesitant to take the leap.
“Of course, business owners have every right to be cautious about trusting someone else to manage such a vital part of their business.”
He, along with Tracy Ebbets from Solvere, provided guidance on how a trades business can approach the selection of a partner with confidence.
Industry and Software Knowledge
“It’s a good idea to look for a partner that has experience in both the accounting software and the job management software that the business is using”
Ebbets continues by explaining why this deeper understanding of the field service management tool is important.
“Reports are really important for everything from how much a technician actually contributes to the bottom line to what that bottom line actually is. So, it’s really important that it’s done correctly. If you just take your timesheet data from simPRO into Xero, without details of what percentage of the payroll was spent working on which department, then you’re only getting half of the reporting capability.”
“If your accounting partner knows how simPRO works with the various cost centres, tags and reports that can be set up, they can pull that data through into Xero as a journal entry as part of your payroll. But without that understanding, you might not get that departmental capability of being able to define what that particular cost has been spent against in the way of a division.
Communication and Availability
Davidson also recommends paying close attention to their communication and availability during your initial discussions.
“You should feel confident that you can quickly get a hold of the person if there’s a last-minute payroll change or something else goes wrong.”
Limiting the potential points of failure is also vital for a successful arrangement according to Davidson.
“From the very beginning of the outsourcing arrangement, streamline and automate the process from start to finish as much as possible. Establish who’s responsible for each task, which rules to follow in the process and the timeline to complete the work.”
What are the Benefits of Reducing Manual Payroll Processes?
Regardless of whether you DIY or outsource payroll, reducing manual data entry from your business will have a positive impact on your staff and business.
Payroll automation gives your staff more time to focus on other responsibilities and reduces the potential for human error, which not only reduces costs, but can lead to revenue gains.
“That is a big reason why we are excited about simPRO’s new timesheet integration with Xero. Since the timesheet information flows directly into Xero, there’s no need to manually re-enter timesheet data which leads to potential errors. It streamlines the whole process from start to finish.” Robert Davidson, Sllick
Discover simPRO’s Xero Payroll Integration
simPRO recently enhanced our long-standing integration with Xero to make it easy for staff to move timesheet and leave data from simPRO and into Xero Payroll with a click of a button.
Find more about keeping your financial data accurate through simPRO’s accounting software integrations
Sllick, United Kingdom
At Sllick, our fully UK based team of chartered accountants specialise in all things apps, accounts and automation. We help businesses move to Xero, improve their processes, and fill in the gaps within their finance department.
We take away the pain of all the numbers and legal accountancy stuff, maintain the information in real-time, giving you pro-active advice, allowing you to concentrate on running and growing the business.
Whether your pain points are cash-flow, payroll, pensions, funding, compliance, lack of information or data for planning, or you simply find tasks taking too long, our Virtual Finance Team can manage anything from bookkeeping, payroll and VAT returns to year-end accounts, corporation tax and business planning.
Our new way of working might be a bit different to what you’re used to but find out why businesses are modernising and paying a fraction of the cost of having all this expertise in-house. Why not see for yourself https://www.sllick.io/virtual-finance-team?
Solvere Cloud Accounting, Australia
A tradesman needs the right tools for a great business. At Solvere, we help the owners of Trade Services Businesses gain control and confidence in their numbers. Our staff have extensive experience implementing and providing ongoing services on job management and cloud accounting systems. Whatever challenge your business has with its operational systems, Solvere has the tools and services to help you figure it out.
SME Financial, New Zealand
SME Financial pride themselves as being tech forward, early adopters. This is because they know their true value is in the benefit they bring in the Financial Advisory space: taking insight from clear, simple data that has been well streamlined with software ecosystems they trust. They find that only when clients can free up time in the day to day number crunching can they start to focus on business growth through the benefits of SME’s advisory services. Kunal Topiwala is SME Financial’s in-house simPRO expert. Passionate about information systems, Kunal’s has a special interest in Trade and Construction Advisory and has helped many businesses transition to simPRO and seen the benefits first hand.
FREE EBOOKDOWNLOAD NOW