Protect the financial health of your business with good Payroll Accounts

You run a fast-growing business and you have big ambitions for the future. But what got you here might not get you where you want to go. Especially when it comes to business finance. Successful businesses run a tight financial ship. As an entrepreneur, the nuances of managing the numbers can be tricky. That’s why we’ve put together a guide to the six key financial reports that give you a true picture of how your business is doing.  

In this blog, we’ll look at report number four: Payroll Accounts. We hope you find it useful! 

 

How does your finance team shape up?  

If your business is growing, that’s great! Congratulations on all of the hard work that got you to this point. 

It does mean, however, that you need to be more on top of the finances than ever. Numbers may not be your thing as an entrepreneur, and that’s OK! They do need to be somebody’s thing though.  

In high-growth businesses, people often wear many hats and take on responsibilities to help out. Maybe some of the people from the early days are in control of the finances – even if they aren’t finance professionals! We get it. The team spirit is inspiring. But that doesn’t necessarily help your finances.  

 

What could go wrong if your Payroll Accounts are not properly managed?  

There’s a risk that people with good intentions and no financial training may not be aware of areas that need particular focus. In terms of the Payroll Accounts there are two particularly risky areas:  

  1. NI and PAYE contributions to HMRC 
  1. Employer pension contributions 

Not forgetting, of course, the risk of over, or under, paying staff. Though, if the latter were to happen, the chances are you’d hear of it pretty quickly! It wouldn’t be great for staff morale, but at least you’d know. If mistakes occur with HMRC or pension contributions you may not be aware immediately. And that could mean a big mess to clean up later.  

 

The business impact of poor Payroll Accounts  

If you get HMRC payments wrong, or they are late, you could be in very hot water. Likewise, if you’re not handling the pension contributions correctly there could be serious ramifications.  

The truth is, it’s easy to overlook these things without an experienced finance professional at the helm. And while you nor your staff have bad intentions, the law isn’t quite as forgiving.  

Your finance team could also make the mistake of overpaying pensions or HMRC contributions. Or they may make duplicate payments. This still isn’t good news for your business because it may take a considerable time to recover your money, if it is possible. 

 

Good Payroll Accounts are key to business health 

Your Payroll Account gives you an idea as to whether your finance team is on top of things. At the end of a given period, the Payroll Accounts should clear back to zero. If that’s not the case when you review your Payroll Accounts, perhaps something is amiss. 

Payroll is one of the most significant costs for any business. It needs to be properly controlled and accounted for or else you won’t understand the true picture of where your company is financially. 

Successful businesses have a handle on their finances. Very successful businesses have a dedicated professional to look after the finances, while the MD or CEO focuses on what they’re good at. If you’d like to free yourself to focus on strategy and business development, knowing the finances are in good hands, get in touch on 0117 244 1891. We help fast-growing enterprises recruit finance professionals to take their business to the next level.