Why is Payroll Important?

April 2022

Payroll is an important process for every company that employs personnel. The company has a responsibility to make sure that employees are paid correctly and on time. Not only is it essential to the employees for their financial well-being and ability to meet their financial obligations, but it's also critical to the company's operations and reputation.

The definition of payroll is ‘a list of a company's employees and the amount of money they are to be paid.’ The secondary definition is ‘the total amount of wages to be paid by a company’ to their employees.

 

Accurate payroll helps improve employee satisfaction

Happy employees are generally more motivated and productive employees. A payroll system that’s efficient and accurate will help to maintain a good relationship between employer and their employees. When employees are paid on time and accurately, they feel more appreciated and respected, which leads to a more positive work environment and increased productivity.

Getting payroll right is critical for employees as it is often their only source of income. Whilst some employees love their jobs, they work primarily to earn a living. Mistakes in payroll can have a significant effect on peoples’ lives as it may impact their ability to cover their monthly outgoings and support their families. One of the minimum expectations of an employee is that their payroll is run and monies received on a specified date, so they are paid for the job they have done and they can meet their financial obligations.

Accurate payroll also increases trust in an employer and gives the employee confidence that they are valued. This confidence leads to an increase in employee satisfaction and a higher level of employee retention.

 

Good payroll protects the employer's reputation

Efficient payroll processing reflects well on a company. It shows that the company is organised and values it’s employees, as well as reflecting it’s financial stability. Payroll that’s inaccurate or slow can hurt a company's reputation by making it look both unprofessional and unreliable. This can lead to an increase in employee turnover which has a knock-on effect for cost of recruitment and loss of productivity.

 

What happens when payroll goes wrong?

When there are errors in running payroll, there are impacts on both the employees and the employer. The effect on employees is clearly the potential ramifications on their financial stability and ability to meet their financial commitments. This can lead to problems with debt and repercussions with mental health for the employee as well as absenteeism, which affects the business through lost productivity, failure to meet deadlines and additional costs.

The dangers to businesses are also significant and long-lasting. Firstly, dependent on the severity of the error and the time that it takes to correct the error, this may lead to a breakdown in the relationship between employer and employee. It may take time for the employer to rebuild the position of trust that they previously held with their employee.

There’s also the implication to the business of being audited by Her Majesty’s Revenue & Customs (‘HMRC’) and the risk of being fined if the correct payments for tax and National Insurance are not made in a timely manner.

Many small businesses cannot justify employing an HR and payroll professional. Often, running payroll falls to the business owner which can be a stressful experience as they do not always have the expertise in complicated tax requirements. Business owners are, however, legally responsible for the accurate reporting of taxes, National Insurance contributions (‘NICs’), pensions and other deductions.

Errors in payroll processing can be stressful for both employee and employer, so it’s important for many reasons to get it right.

 

For many companies, payroll is seen as a necessary administration task that’s a commodity product, rather than a differentiator within a business. Payroll can add value to a company, not just be an administrative task. A payroll solution that is employee-focused and demonstrates an employers’ commitment to the well-being of their personnel is an attractive benefit when recruiting new staff.

Whilst payroll is often a neutral experience for most employees, it doesn’t need to be. Positive reinforcement of the benefits of good financial management with the option of support in more financially challenging times can change payroll from a neutral experience to a positive one.

Says Simon Bocca, Founder and CEO of PayCaptain, “So many prospective clients tell us that they only hear from their employees if they have problems with their payroll. It doesn’t need to be like this! We are committed to making payroll a positive experience where employees can benefit by building financial resilience for their future.”

 

How doesPayCaptain help?

PayCaptain offers innovative functionality to turn payroll into a positive experience for both employers and employees. PayCaptain is a fully outsourced payroll solution that puts employees in control of their pay whilst making it an optimised, modern and flexible payroll process for employers.

Customisation of the solution makes the payroll process on brand and aligned with company values. With functionality including interactive payslips, On Demand pay to help employees in times of financial hardship, built-in banking features and expert support and financial advice, PayCaptain is an employee benefit that is a positive company differentiator, as it demonstrates the value that businesses place upon their employees.

 

For employers, PayCaptain payroll software is approved by HMRC so compliance, security, accuracy of processing and resilience are fundamental to the solution. PayCaptain includes all the features needed to operate a compliant payroll function including RTI and Auto-Enrolment capabilities.

When considering a payroll solution, it's important to partner with a payroll provider that can help business stay compliant and ensure that employees are paid accurately and on time. PayCaptain  offers expert advice and support, so that businesses can rest assured that their payroll is in good hands.

As a business owner, if you’re looking for an outsourced payroll provider to, be sure to compare quotes and read reviews to find the best fit for your business. Payroll is too important to leave to chance - so you need to make sure you choose a provider your business can trust!

If you’d like to know more about how PayCaptain can help your business, please contactus. We’d be delighted to run through the functionality and demo the PayCaptain solution for you.

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PayCaptain Payroll Solutions Limited, www.paycaptain.com is an HR/FinTech company that delivers a fully automated cloud payroll service. The solution contains many unique and innovative features for employees, helping them to take control of their pay and increase their financial well-being. PayCaptain is a payroll solution that helps employers pay their workforce, regardless of income and personal circumstances. The solution also incorporates functionality that is specifically designed to positively impact financial resilience for people struggling with money, or vulnerable and low-income employees.

PayCaptain is the first B-Corporation certified payroll company in theworld. To read more about B-Corporations, visit www.bcorporation.net

 

 

 

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