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Payroll: If there’s anything that British companies fear the most when handling their accounting and bookkeeping tasks, none are far more imposing than this seemingly-simple concept.
Although paying your employees may seem like it only entails taking an amount of your account and recording it in your books, this idea could not be farther from the truth than it already is. Many businesses only learn about the complexities of payroll management when they understand all the standards, laws, and tax involvement of the task at hand, this causes many to struggle along the way.
Among the different aspects that are dabbled into when trying to handle finances, there’s one concept that many fail to talk about: The common mistakes that can be made.
Why it matters to acknowledge the mistakes that you can make
In the world of payroll management, the margin for error is minuscule at best, making every tiny mistake exponentially more extensive in the eyes of HMRC.
Today, businesses are urged to look deeper into the complexities of the way they pay their employees for their work because common mistakes can set any entity back by a fortune. Ever since HMRC took a firmer stance on ensuring fair payment while complying with policies and standards set by law, every company is now obliged to prepare their operations to overcome potential hurdles to stay afloat with affordable accounting solutions.
3 Accounting Mistakes that Non- Profits Make
As intimidating as it sounds, the reality about avoiding mistakes to save your operation’s profit and time can be done by taking note of familiar fumbles that may be made. If you want to make sure that your business stays out of hot water while paying your workers fairly, here are accounting Mistakes that Non- Profits Make:
Mistake #1: Declassifying employees
In the eyes of HMRC, one of the biggest mistakes that any company can make is accidentally misclassifying their employees during the payroll process. This situation is even more possible in this age where temporary workers are common. When compared to other common faults, wrongly classifying an employee can lead to many consequences that span from fines and penalties to inaccurate reports and confusion. By taking the time to properly establish the correct classification of every worker in your company, you can avoid compromising your effectiveness and productivity in the long run!
Mistake #2: Missing out on deadlines
Seen as the most common pitfall, missing payroll or payment deadlines for employees (alongside those for National Insurance Contributions and tax) is one problem that many find themselves struggling with.
Know that missing out on crucial deadlines can set your business back or hinder its progress because it results in interest charges and even more penalties that vary in severity. The only solution to this problem is to note down due dates and be even more aware of other specifics so that the processes leading up to payment and submission can be done accordingly!
Mistake #3: Not outsourcing help when it is most needed
Admittedly, not every leader or founding team is well-equipped when it comes to handling the payroll responsibilities that their company is obliged to uphold. Thankfully, you won’t have to risk your profits, time, and critical opportunities on the perils of inexperience so long as you get to enlist the help of an outsourced team that’s equipped to take on the process. Cheap Accountants In London, for instance, has years of experience helping out companies take on their payroll processes so that they can effectively tend to their core responsibilities!
As a British company, it is essential to uphold the responsibility of complying with strict payroll process standards and guidelines while doing them well. However, failing to acknowledge potential mistakes can prevent you from doing this. With this guide’s help, you can duly take note of the common mistakes that your company may make and ensure that you get to handle your finances well enough for long-term success and stability!
We specialise in providing affordable accounting services to startups and small businesses all over London. Our experts take on a range of accounting services, such as corporate tax, auditing, company secretarial, business start-up, payroll and self-assessment tax returns services. Get in touch with us today to see how we can help!