Payroll Software

2. The Advantages

Using software to do your payroll gives you greater control over your data.

2.1 The software automates repetitive and sometimes difficult tasks.

• It becomes almost as easy to pay people weekly as to pay them monthly.
• Payslips are produced automatically. Some software packages have a module that allows you to make direct credit payments through BACS.
• You no longer have to perform complex calculations involving tax and National Insurance tables. The software does them for you.
• You can easily make additional deductions from each employee's wages. These could include pension contributions, union dues, employee savings, student loan repayments and voluntary charitable donations.
• The software should automatically calculate certain additional payments, such as tax credits, statutory sick pay, statutory maternity and paternity pay, holiday pay and back pay.
• The software will automatically give you information for your end-of-year returns.
• Some packages offer an interface to log holiday and sick days, so absence is tracked automatically.

2.2 The software ensures compliance with statutory rules and procedures.

2.3 You can share data between different software applications.

• You can minimise the number of times you have to enter the data.
• You can automatically update ledgers.
• You can integrate data generated by different parts of your business. For example, you may be able to use your payroll information to address letters and circulars automatically.

2.4 More sophisticated software provides you with detailed management information.

Most payroll software enables you to run queries and generate reports.

• The software should include a suite of standard reports. For example, a report to show National Insurance contributions.
• You may be able to analyse staff costs in depth, drilling down to detailed explanations