Making a success of a small business in normal circumstances is difficult enough, let alone under the shadow of the current economic downturn which has resulted in reduced spending power impacting adversely on sales.
It is imperative that SMEs use technology to ensure that they can deal effectively with the legislative requirements attached to financial, Accounting, tax and labour matters — one of the main factors behind the failure of small businesses.
Lack of understanding
Grant Lloyd, managing director of the payroll software specialist Softline Pastel Payroll, says another factor is that small businesses, especially those starting up from scratch, often lack understanding of the basic principles and tend not to pay enough attention to having the right systems and technology in place.
“The current economic situation is placing greater pressure on small businesses and suppliers of goods and services are feeling the pinch of cutbacks. Technology helps to deal with that pressure and enables companies to operate more efficiently and cost effectively.
“Running a legally compliant payroll department has become an increasingly difficult and time-consuming task for SME companies as mushrooming legislation has resulted in a confusing glut of legal requirements across six Acts governing tax and payroll. Hence outsourcing payroll administration is a solution we introduced to offer SME businesses choices, creating options for them to achieve compliant payroll administration without diverting resources and focus away from their core business.”
Pastel Payroll also studied the needs of start-up businesses with up to 5 employees and introduced a simplified payroll software solution, Pastel MicrOpay that is quick, easy to set up and operate. It provides professionally structured payslips and ensures legal compliance with all of the many employee and company taxes, levies and returns.
Lloyd says fast-growing SMEs need to consider automated payroll solutions or outsourcing because of the complexity of the legislation governing tax, statutory returns, levies and conditions of employment and the fact that such solutions are updated immediately if there is any change in legislation.
“An outsourced payroll or automated payroll ensures that all calculations are accurate and that reconciliation submissions to SARS via the e@syFile PAYE system for PAYE, SDL and UIF, are efficiently and conveniently completed.”
Lloyd concludes that efficiency is critical for SME’s in the current economy and that software, technology and compliance with legislative requirements are key to survival.