In February 2015 cloud-based accounting software company Xero announced the launch of its new Payroll software. The software, launched at the company’s flagship Xerocon conference in London, offers a fresh, new approach to payroll for business owners, in a market that Xero says has been lacking new ideas.
Whilst we think this new development from Xero is exciting for us and business owners, there are some things to bear in mind before you start using it yourself.
Setting up Xero Payroll
Xero is easy to use but it’s important to get everything right from the start, so the setting up process is very important. To ensure you hit the ground running you’ll need to have the following information to hand:
- HMRC login credentials
- PAYE reference and Accounts Office Reference
- All data for employees, including dates of birth, NI numbers, tax codes, addresses etc.
- P11 reports for the tax year so far, if you are setting up mid-year
- Details of pay rates, hours worked, deductions (e.g. pensions) etc. for all employees
Getting these details entered correctly at the start will save you from having to come back to re-enter information further down the line. In fact, sometimes you can end up having to go back and re-enter information if something is not right at the beginning.
There’s plenty of help and support to detail what you need and how to proceed – and naturally we’re here to help you make the transition too. We find that many clients prefer us to do the setting up for them, and then provide training on how to run their own payroll after that.
Pay your employees quickly and easily
Using Xero Payroll you are able to add a variety of pay types, including hourly and salaried pay rates, overtimes, bonuses etc. You can also set various pay adjustments and deductions, such as Student Loan repayments, pensions and more.
It does not currently cater for Statutory Sick Pay (SSP) or Statutory Maternity Pay (SMP), but these can easily be calculated and entered manually. This facility will no doubt be added in an upcoming product release.
Employment management – from payment frequencies through to P45 Leaver Forms – is simplified, making your life even easier.
Auto Enrolment in Xero
Auto Enrolment, which is Government legislation requiring all UK employers to enroll certain staff into a workplace pension scheme, is being rolled out across small businesses in the UK from 2015. Xero aims to make the process as pain-free as possible for small business owners.
Built into their new payroll software is the Auto Enrolment feature for UK users. Within this feature you’ll be able to manage which employees are eligible to make contributions, who has opted out or been deferred, etc.
Simply enter the details of your chosen pension provider and each eligible employee’s Pay Template will be updated with the contribution amounts – although these can individually be customised if needed.
Keep up-to-date with HMRC obligations
Compliance issues around pay are complicated and seemingly ever-changing. Xero keeps you up-to-date on your obligations to HMRC while still ensuring you can easily pay your employees. The system lets you make adjustments to pay details on an employee-by-employee basis, compiles reports automatically and ensures that when employees are paid the general ledger is updated accordingly. You can even give your employees access to the pay information they need so everyone knows exactly where they stand. Xero can automatically send real-time information to HMRC and it can produce a BACS file for uploading to the bank to pay employees.
As areas such as auto-enrolment for employee pensions continue to evolve, Xero is on top of the changes – keeping your business on track whatever happens.
We’re just scratching the surface of what Xero can do here – and don’t forget all this is securely accessible from any device, so you’re always in charge. As your accountants, we can help your switch to Xero run smoothly and make sure you’re always getting the best value from the solution.
To find out more, give us a call now on 01730 823 000.
Small Business Accounting London
Do you run a small business in London and are you looking for accounting advice. Approved Accounting in London can help you with a range of accounting services. Visit our London office page for more information.