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Polishing the payroll process

Article Date:  Jul 12 2007

When Lesley Jeffs, director and company secretary of electrical contractor Instalec, joined the company in 1995, she found that all financial functions, including payroll, were being done manually.

‘Our accountancy bills were huge compared to other expenses,’ she says. ‘I called a meeting with our accountant and talked it through with him.’ Jeffs decided to trial three or four software packages before choosing one.

‘We found the software simple to use and it suited us,’ she says. ‘It used to take me practically half a day a week to do the payroll. Now the bookkeeper comes into the office every week, and in only half an hour he’s done the work.’

Internal payroll processing may not suit every business. Apart from the purchase and support charges, there is the cost of a qualified operator. Moreover, if staff are not properly qualified, errors can slip in.

Keith Fowler, operations manager at JKM Property Services, says: ‘We used to do payroll internally, with someone who also did HR. Because she was split between the two things, there were mistakes.’

The solution came in the form of payroll outsourcing. This not only improved accuracy, but was cost effective too. ’It’s saved us a lot of time and hassle,’ Fowler concludes. ‘Payroll doesn’t concern me anymore. I never even think about it.’

According to Louise Mitchell, director of Precise Payroll, companies have a range of reasons for choosing to outsource: ‘Some companies need help for a little while, for example a maternity cover. Others don’t want to have responsibility for payroll: maybe you don’t want that sort of information lying around.’

Whether outsourcing or bringing software in-house, it pays to shop around. The capabilities and prices of software packages vary widely, as do the charges made by payroll outsourcers.

Jeffs advises those that are considering buying payroll software to ask for demos before committing themselves. ‘Companies are quite happy to send out demo disks, or talk you through a demo online. Get a feel for what’s going to work best for you,’ she says.

She also stresses the importance of ensuring more than one person in the company is comfortable with the software, saying: ‘Make sure you have at least two employees that can handle it, so that you’re covered when someone goes on holiday. Similarly, don’t pick a package that only suits one person in the company and which nobody else
can stand.’

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