Last updated: 29th March 2023
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 your 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!
The people in your business
As the leader of a growing business, you know just how much hard work got you to this point.
It does mean, however, that finances become even more important as you aim for the next level. 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 like yours, people often wear many hats and take on responsibilities to get the job done. Maybe some of the people from the early days find themselves in control of the finances – even if they originally weren’t trained as finance professionals! We get it. The team spirit is inspiring and was key to your success. But that doesn’t necessarily help your business as the finances become more complicated and require more in-depth financial acumen.
As you grow, you take on more people. As you take on more people, payroll becomes more and more important.
What could go wrong if your Payroll Accounts are not properly managed?
There’s a risk that people without financial training may not be aware of areas that need particular focus and planning. In terms of the Payroll Accounts there are two particularly risky areas:
- NI and PAYE contributions to HMRC
- Employer pension contributions
This doesn’t include 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 isn’t great for staff morale, but at least you’d know immediately and the situation can be easily rectified.
However, if mistakes occur with HMRC or pension contributions you may not be aware for quite a while. 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 paid late, you could find yourself, and your business 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 your intentions may be honourable, the law isn’t very forgiving when it comes to stumping up statutory monies. Your finance team could also quite easily make the mistake of overpaying pensions or HMRC contributions. Or they may may duplicate payments. This still isn’t good news for your business because it may take considerable time to recover your money, if it is possible.
Good Accounts are key to good business health
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.
Your Payroll Accounts give you an idea as to whether your finance team is on top of the key financial requirements. 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.
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 – growing the business.
If you’d like to free yourself to focus on strategy and business development, whilst knowing the finances are in good hands, get in touch on 020 8191 2124. We help fast-growing enterprises like yours recruit finance professionals to take their business to the next level.
Find out about our free guide “Why your business might not be as profitable as you think.”
