For any business, from the smallest to the largest, the payroll is one of the most important administrative tasks.
Getting it right is essential both from an accounting point of view and in terms of looking after your staff. There is also the additional responsibility of dealing with the Revenue Commissioners and ensuring that every employee pays the correct amount of income tax and PRSI.
Fortunately these days, payroll software can do the job in replacing paper-based systems. Such software isn’t necessarily for large companies and out-of-the-box solutions are available for businesses with workforces of less than 10 for example.
Neopost Ireland is a good example of the kind of small business benefiting from payroll software. The company, based in Cabra, Dublin was established this year when the Neopost Group took over RTL, an Irish supplier of mailing equipment, such as folding and inserting machines for the past 20 years. Neopost also supplies a range of plastic ID card. The company employs 23 people.
Company secretary Elaine Peppard has been with the company for 15 years and is responsible for the company’s payroll. Prior to acquiring a payroll software solution, a paper-based system was employed. Peppard says that she used to have to spend one day a week working on the payroll. This involved recording the hours worked by all employees and multiplying that by the hourly rates paid. “I had to tot up everyone’s tax deduction card and the monthly returns that were sent into the Revenue Commissioners against the P35 return. It took a long time as figures had to be constantly cross-checked,” she says. The beginning of every year was also a very busy time as new tax and PRSI rates would have to be implemented.
The company decided to switch to using payroll software, primarily because of the ever-increasing workload involved. Sage Quickpay was selected by the company. According to Peppard, one of the deciding factors in selecting Sage was price. “We thought the cost was and still is very reasonable. The stationery is a bit expensive, but there’s no obligation to use Sage’s stationery with the software,” she says. After an initial trial period of two weeks, where it was run in conjunction with the manual system, Neopost switched to Quickpay.
The big difference noticed by Peppard firstly was time saved. What once used to take a day every week now took half an hour, due to the degree of automation provided.
However, it’s at the year end that the most dramatic difference occurs. “December is a busy time for payroll professionals,” says Peppard. “We have to run the December payroll early to ensure employees get their pay before Christmas and these dates are dictated by the banks. As we pay weekly, we also need to do all the preparations for the first run of the new year before the Christmas holidays.”
For a successful year end Neopost needs to have several actions completed in December. These are the last payroll of the old year and the provision of all reports, the tax year-end procedure, figures checked and the disk supplied by the Revenue Commissioners imported for the new year.
At the end of the year Sage sends Neopost update disks. They guide the company step by step through each payroll activity. Peppard says that the procedure takes up around two hours. “As you perform each step you tick off the itemised checkbox. You do your P30 list and then you have the option to send in your P35 into the Revenue Commissions on disk. The Revenue Commissioners send me the employees tax credits on disk which I load into accounts and then all I have to do is click on ‘Import Tax Credits’ and all employees tax credits are instantly updated on the system which also includes each employees PPSN number,” she says.
Peppard is sold on the benefits of payroll software, to the extent that she recommends it to her husband for his business. “It is very easy to use. It handles expenses and each individual’s mobile phone charges and it deducts straight from their wages. Mileage and other items are all recorded in Quickpay so there is no need for spreadsheets. Deduction print outs give you all the reports you need,” she says.
Pictured: John Morgan, managing director and Elaine Peppard, company secretary, Neopost Ireland