Where did Payroll come from and why is it so important? Primarily, payroll can trace its roots back to bookkeeping in most industrialised nations. In the first instance bookkeeping was a way for merchants to keep track of their sales and outgoings, but over time as trade and business has developed on a large scale it has developed into something much more complex. These days companies need to keep track of their employees pay as well as their own buying and selling, and with tax and legislation ever changing it the need for accurate and efficient payroll solutions has become paramount.
Whilst we may all assume that payroll is a contemporary thing it’s history actually dates back to 7000 BC! Whilst not the payroll we know today, archaeologists have found evidence of payroll records carved into stone dating back to this period. There are also records from Athens in the 5th century showing that the Greeks also liked to keep their house in order.
The Greek system is the first known system which bears some resemblance to the HR and payroll systems we use today. The Athenians developed a system for managing pay in which public servants, treasurers and clerks kept records by chiselling payment details and financial records into stone!
Payroll as we know it today largely came about during the industrial revolution of the 19th century. With the onset of mass employment and production in the country the need arose to keep accurate records of workers and their pay. Without financial documentation it would have been impossible to keep up with outgoings. According to the dictionary this is when the term “payroll” was first used.
Another step towards the payroll that we use is the development of the first computerised payroll system. This early IT based payroll system began to take shape in the 1950′s when the first computerised LEO (Lyons Electronic Office) was developed in order to handle clerical tasks. Whilst it was first used for valuations, it was soon used to manage other clerical tasks including payroll services.
These days companies no longer need to manage their own payroll as there are companies that specialise in payroll management who can take care of it for you. In today’s workplace any business which employs staff needs a fluent and effective payroll system. It enables you to comply with legal obligations and to ensure that you are deducting the right amount of income tax and national insurance contributions. It’s important for companies to keep on top of this as failure to comply can land businesses in trouble – and end up costing them a lot of money, and the larger your company is the more difficult it will be to manage your payroll.