What is Payroll and why do I need a Payroll software?

In Business Management Software by Sophie Galtress

Reading Time: 4 minutes

What is Payroll software

Payroll is something every business may want to invest in, no matter how big or small you are. Payroll software will help to manage and process the payments which are made to employees. You can discuss with your employees the date and time in which they will receive money from your company.

Your employee’s pay will need to be on time to avoid poor performance and to avoid legal complications. When you pay your employees on time, you are helping to maintain the trust you have with them. We all know that payday is the day of the month in which your employees will be most happy, so don’t ruin that for them by paying them late. They may have bills to pay on the day they’re supposed to get paid and if it’s late, it could cause them financial trouble and you risk ruining your relationships with your employees, along with your reputation. You don’t want to be known as the company that can’t pay their employees on time.

When it comes to payroll, your business will want to invest in a reliable, computerised payroll system, as it can help you to carry out your payments with efficiency and confidence. The payroll software can also be used to calculate payments, withhold tax and deposit weekly or monthly payments into the bank accounts of your employees. The only thing you really need to do is to input the wage amount, the number of hours they worked per week and their bank account details.

Do I need Payroll software?

When looking into whether your business can benefit from having a Payroll software, you will have to keep in mind that there are more advantages than disadvantages for introducing a payroll software to your business.

There are many advantages as to why your business should be using payroll software. One of these is that using payroll software takes minimal effort and it will save you a huge amount of time.  You don’t have to sit around and calculate bonuses or holiday pay as the payroll software will do most of the work for you.

If your business is using a manual payroll process, you always have that worry in the back of your mind of making a mistake which could cause upset with your employees. A manual payroll process is also time-consuming. So, if you do make the switch to a computerised payroll software, you will realise how much more free time you have which could be spent getting on with admin, projects, etc. Payroll software will also allow you to keep on top of rates and allowance changes. This makes it easier for your accounting team as the calculations of new monthly payments would have been updated by the software.

The only downside about having a Payroll software is that cyber-security is on the rise. This goes for any other IT system that your business may use because they all have their weak points. If a breach were to happen and a cyber-hacker managed to access your payroll software, they would gain access to the details on your employees such as their names, bank details and much more. If you do make the switch from manual payroll to payroll software, make sure you back up your data and IT systems regularly to ensure that your payroll is secure. If a breach were to take place, it could potentially have a huge impact on your business.

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Manual Payroll vs Computerised Payroll

A manual payroll will involve someone from your accounting team to work out calculations for each pay period, entirely by hand. This is usually a very slow and time-consuming process. The records will be kept on paper and although this method is cheaper than a computerised payroll, it’s more prone to human error. Manual payroll is usually used in businesses with no more than 10 employees.

A computerised payroll uses software that allows the user to carry out routine payroll tasks more efficiently. The computerised payroll will automate processes such as calculations, tax returns, reports, and deductions. The only thing that you will have to manually put into the payroll software is; employee’s details when they first join the business, make changes when their rates of pay increase or decrease, change tax codes and enter details of hours worked during the week/month and if any overtime has taken place.

As you can tell by reading the last two points, a computerised payroll is quicker and more accurate than if someone in your business was to do your manual payroll by hand.

How Payroll software works

The payroll software can be used to calculate payments, withhold tax and deposit weekly or monthly payments into the bank accounts of your employees. The only thing you really need to do is to input the wage amount, the number of hours they work per week and their bank account details.

There are many different features within payroll software. Many software’s will offer extra features and functions such as creating and sending payslips to your employees, at the same time, every month. Some payroll software’s can also produce detailed reports.

Sage 50 Payroll

It is known that half of businesses in the UK pay their employees with Sage 50 Payroll. Sage 50 Payroll is an affordable, HMRC recognised, cloud-based payroll software which is ideal for smaller businesses, charities and retail stores in the UK. Sage 50 Payroll also works with international enterprises across the world. Sage ensures that as a business, you’ll never have to worry about payslip errors impacting relationships with your employees!

Sage 50 Payroll can be used across a variety of different devices such as Mac, PC, and mobile. This will allow for a more flexible way of paying your employees. By having Sage Payroll on your mobile or tablet, it will help to manage your payroll on the go, 24/7, no matter where you are. There are also frequent software updates within Sage 50 Payroll which will keep you up to date with the latest payroll legislation! If you are a Sage 200 user, you can integrate your Sage 200 system with Sage 50 payroll very easily using a 3rd party add-on.


If your business has more than 10 employees, you may want to consider moving over to Payroll software if you haven’t already. If you have any questions about Sage 50 payroll, please get in touch with us here.