Why outsourcing your payroll function can improve your business
Payroll can be a burden for small employers. By outsourcing your payroll you can improve the efficiency of your business, saving time and money.
Managing the payroll can be a time-intensive and complex process for small employers, particularly if they lack experience or expertise in this area – and getting it wrong can be extremely costly. For this reason, many small businesses can benefit from outsourcing their payroll to an external accountant.
Avoid a payroll headache
Payroll is an important part of any business – after all, your staff are not going to be happy if they don’t receive the correct pay at the correct time. However, as we’ve already mentioned, it can be pretty complicated, especially for the uninitiated, and is bound by lots of regulations around issues such as record keeping, tax deductions and HMRC payments.
In a lot of smaller companies, the responsibility for managing the payroll tends to sit with just one member of staff. In the event of sickness or other unexpected absence, this responsibility will need to be transferred to other employees who are unfamiliar with the system, making it more likely that mistakes will be made. And mistakes can prove costly, with businesses facing stiff penalties from HMRC for incidences of non-compliance.
By placing your payroll in the hands of a professional accountant, you leave yourself less open to mistakes and non-compliance. And if mistakes are made, you can claim for any costs incurred as a result.
Save time and money
As well as helping you to navigate the complexities of the payroll system, using external payroll services can also improve your business in other ways, helping to improve efficiency and saving you time and money.
Administering payroll in-house requires the purchase of specialist payroll software and, as well as the initial outlay for the software, you will usually also have to pay ongoing annual maintenance or subscription charges, which when combined with administration, can become very costly.
Processing the payroll is also a burden on staff time – both in terms of being trained up to use the system and the time it takes to process payments each month. What’s more, the payroll is usually run at the busiest time of the month, meaning that holidays and time out of the office need to be carefully managed. With this in mind, outsourcing payroll is often a more efficient option, freeing up your employees to focus on other tasks which can be more beneficial to your company.
Security is another good reason to consider outsourcing your payroll. In today’s society, data protection is a key concern, and it’s important that you have adequate measures in place to protect your employees’ sensitive data. You may think that outsourcing your payroll to another company could compromise this data but, in fact, external services tend to offer a much more secure option than your internal systems, with the use of offsite secure servers, password protection and back-up facilities.
When it comes to saving you money and giving you peace of mind, outsourcing your payroll is somewhat of a no-brainer. Of course, it’s important to find an accounting firm that you trust and who can meet your requirements, but once you do, you can hand over the payroll headache and concentrate on growing your business.