Many new business owners can find the thought of managing all the different aspects of running their business daunting. From marketing and IT to tax and finance, it’s a case of getting up to speed quickly on a huge variety of things. Therefore, it may be that the only way to make sure that everything gets done correctly is to outsource some of the tasks.
The type of functions that are usually outsourced by small businesses are ones that either don’t add any value, or require specialist skills and knowledge that are not viable to employ someone in-house.
Processing payroll is one such function. With a variety of outsourcing options available, from large established payroll providers to smaller competitors, outsourcing your payroll can offer many benefits.
Cost
When considering reasons for outsourcing any business tasks, cost-cutting is usually high up on the list. Large employers can afford to maintain in-house payroll teams. For small businesses however, an in-house payroll service is costly. If you calculate the hours you or your staff spend on payroll-related activities, plus payroll software costs, training, printers, payslips etc, you could be surprised by the result when you compare that amount to the cost a payroll service provider can offer.
Time and Resources
The payroll function can consume a large proportion of your staff resources, especially if the staff in charge of the payroll are not trained specifically in payroll. The benefits of outsourcing the payroll include freeing up these resources allowing your staff to concentrate on other areas of your business. Senior staff need to be particularly efficient with how they are spending their time, especially if the business is growing quickly. Outsourcing allows businesses to refocus the attention of key individuals onto more strategic areas of the business that directly affect profitability
Training
It can often be expensive to employ staff with the necessary training and expertise to operate a payroll system. For smaller companies where the payroll role is not enough to warrant a full-time employee, you may have to use your current staff to train in payroll as an additional responsibility to their core role. Your payroll staff will also need to keep up to date with current legislation. Outsourcing to a trusted provider allows owners to effectively wash their hands of these worries.
Experience
Certain types of employment can lead to complicated payroll structures or scenarios. It pays to have a wealth of experience at your disposal which is something you are unlikely to have with a small in-house payroll department. A good payroll service provider will know all the ins and outs of payroll and current legislation.
Getting it Right
Payroll is a thankless task. Errors are a common occurrence which can be painful, upsetting and stressful for all involved. A good payroll service provider is far less likely to make a serious error than your in-house staff, as you are paying them for their expertise, knowledge and checking procedures they have in place. It can also be difficult to find experienced payroll professionals as the role requires a lot more than just number crunching and requires a thorough knowledge of tax regulations, due-dates and changes in HMRC legislation.
Flexibility
Many payroll companies can offer small and medium sized business total payroll solutions in which all your payroll requirements can be met. These solutions are often flexible to meet your specific business model so you don’t end up paying for something that includes services you don’t need or misses key features that you do need.
Stress Free
Outsourcing payroll services can bring peace of mind to a business owner or manager. No headaches, no hassles, no stress, no worries – you are left to focus on running your business knowing your payroll obligations are dealt with correctly and efficiently. Processing payroll is more than calculating numbers and issuing payslips. Payroll hides an intricate web of legislation and tax regulations under its sleeve, so don’t be fooled into thinking that anyone can do it. Small businesses often end up paying penalties for late or incorrect submissions and that is hard-earned money that could be spent elsewhere!
So…….To Outsource or to not Outsource
The benefits for businesses to outsource payroll go far beyond a simple cost reducing exercise. A fully outsourced payroll will allow you to free up valuable resources that can be redirected elsewhere as well as reduce the risk of penalties from HMRC for non-compliance or late submissions. You will have the comfort knowing your payroll is being handled by fully trained and experienced professionals and reducing your stress or worries about ensuring you are compliant.