In 2021/22, income tax and National Insurance Contributions together raised around £386bn for the UK government. Payroll might seem like a drag when you’re in the midst of it, but without the taxes deducted through payroll, we wouldn’t be able to fund our health system, schools, public transport or welfare systems (to name a few).
For your clients, payroll is a fundamental part of managing and growing their businesses, and for their employees, it’s their lifeline. When payroll is done right, clients can take it for granted. When there are issues with the payroll, it can lead to reputational damage, unhappy clients and upset employees. Whether you have 2 or 200 payroll clients, accountants all face the same challenges when it comes to payroll. In this article, we’ll be looking at five common payroll challenges faced by accountants, and how you can overcome them.
Challenge one: Spending too much time on payroll
One of the biggest challenges that face accountants is the amount of time they’re spending on providing their payroll services. Using outdated technology can slow down performance and make payroll a lot more manual than it needs to be. The more time that is wasted, the less profit there is to be made.
Offering payroll as a service is all about efficiency, and in today’s world, automation and integration are key to streamlining your practice’s workflow. Bright’s payroll software solution, BrightPay, includes a number of time-saving features that mean you can spend less time on payroll. Some of BrightPay’s time-saving features include:
- The ability to send payroll data to other platforms directly through the software, including HMRC, accounting software providers and pension platforms
- Pay employees, subcontractors and HMRC directly through the software
- Automated auto enrolment functionality
- A batch processing feature where you can process all your static payrolls at once
- Integrated employer and employee platforms to distribute payslips, share payroll reports and much more
Challenge two: Making sure employees are paid correctly
According to research from 2022, 91% of UK businesses admitted to making payroll errors every month, a scary figure! From speaking to our customers, we found that there is one main factor that contributes to errors in the payroll: human error. This includes errors made by the payroll processor but also mistakes made by the client, such as forgetting to tell you about a new starter. Below, are some of the ways payroll software BrightPay and its cloud extension, BrightPay Connect can help you avoid mistakes due to human error.
1. Make the client responsible for ensuring payroll information is correct
Allow clients to enter payroll information themselves through BrightPay Connect’s online employer dashboard, including hours, new starter details, holiday allowances, tax codes, overtime and more. Once you are happy with the information they have added, you can approve it and the data will flow through to your payroll software.
2. Get notified of tax code changes through your payroll software
As BrightPay is integrated with HMRC, you will be notified within the software when there are new coding notices to be applied to employees on the payroll. From the main dashboard, you can then apply the new tax codes.
3. Allow for last minute changes to employees’ pay with flexible payments
By paying employees through BrightPay’s integration with Modulr, payments can be processed 24/7, 365. This means that you can allow for any last-minute changes to the payroll, and quickly rectify any payment mistakes.
5. Automate auto-enrolment
BrightPay constantly monitors employees’ auto enrolment eligibility in the background for you. On-screen alerts will notify you when you have pension duties to perform, meaning the correct pension deductions will be made.
Challenge three: Making sure employees are paid on time
While it’s important employees are paid the correct amount, it’s also important that they’re paid on time. Paying employees by credit transfer using the Bacs payment system means it can take up to three working days for employees to receive their wages. If you don’t get your bank files uploaded in time, it can lead to delays in your clients’ employees getting paid, especially if this happens just before the weekend.
With BrightPay’s integration with payment platform Modulr, you no longer need to worry about employees not being paid on time. The integration allows employees to be paid directly through the payroll software. Payments can be made at any time, on any day, even on weekends and bank holidays. Payments are processed in under 90 seconds, so there’s no waiting around for payments to land in employees’ bank accounts. You can also schedule payments in advance.
Challenge four: Staying compliant
Complying with payroll legislation is something payroll processers need to be vigilant about. Non-compliance with HMRC, GDPR or auto enrolment duties can not only result in fines but can damage the reputation of your business. That is why it’s important to choose a payroll software that helps you stay compliant in these areas.
- HMRC
As payroll processers know, you may be charged penalties if you don’t report the correct payroll information to HMRC or if you don’t submit the information on time. It’s necessary that you use a HMRC recognised software like BrightPay that can report PAYE information in real-time.
- GDPR
When processing payroll, you’re dealing with a lot of sensitive information. Using a GDPR compliant payroll software such as BrightPay means you and your clients can rest assured that all personal data is stored and managed in a safe and secure manner. Using BrightPay’s cloud extension BrightPay Connect to share payslips and payroll reports with clients, means extra security for your clients’ data.
When auto enrolment duties are not complied with, employers can be faced with fines from The Pensions Regulator. Of course, sometimes payroll processers can make genuine mistakes when trying to keep up with auto enrolment and re-enrolment duties. Any mistakes however can be easily avoided when you use a payroll software like BrightPay which monitors employee eligibility and will notify you of any pension duties you need to perform.
Challenge five: Undervaluing your payroll services
Accountants are always on the lookout for ways to make their practices more efficient and profitable. Payroll, while an essential service, is sometimes overlooked when it comes to increasing profitability. Many accountants say that they find payroll can take up a lot of their time, while not necessarily yielding the returns they would hope for.
Many practices undervalue the importance of payroll and can often undercharge for it; many accountants see it as a basic function, with no real value to clients. However, payroll is a fundamental part of running any business, and offering great payroll services and pricing them effectively can not only increase your profit margin but can also expand your client base.
BrightPay’s new cloud payroll solution
Did you know, Bright are launching their new cloud payroll solution, BrightPay, for the new 2023/24 tax year, and it will be available from the 22nd of March. At the time of launch, some functions which were mentioned above are still to be released on the cloud version – for example, batch processing for bureaus, importing from and exporting to CSV and direct payments. We want to reassure customers that we aim for our cloud payroll solution to be feature-rich by the end of the calendar year. To learn more about BrightPay’s cloud payroll solution, visit our website.
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Want to find out more about Bright’s payroll, practice management and tax compliance solutions? Book a demo today to see our software in action.
Bright creates software for tax, compliance, practice management and payroll. We’re on a mission to make a happy and efficient working life a reality for accountants and businesses through reliable software and amazing support.
