In-house VS Outsourced Payroll
With payroll management an essential part of business financial operations, many business owners and managers are still confused about how best to handle it. This confusion has sparked a debate on the best option between in-house and outsourced payroll. The truth is, while both options aim at the same goal, their outcomes vary.
If you're a business owner confused about which payroll management option to choose between in-house and outsourced payroll, we’re here to help. We’ll discuss what each payroll management option entails, evaluate the key differences between them, and help you to reach a conclusion on which option is best for your business.
In-house Payroll Management
As the name indicates, in-house payroll management is when the payroll duties of an organisation are committed to a department within the same organisation. This department oversees the overall processes involved in the payroll system and is usually the financial or human resources department. They use specific tools to execute payroll operations while ensuring every staff member gets paid for the work they've provided within a pay cycle.
Having in-house payroll management can be incredibly beneficial for some businesses. Depending on job roles and the size of an organisation, it can be a cheaper option than outsourced payroll, whilst offering you maximum control over processes and helping to ensure employee data security from third parties. However, as great as these benefits are, in-house payroll management has certain drawbacks.
For example, in some organisations, in-house employees handling payroll services have many other responsibilities on top of running payroll. As a result, they may have a limited understanding of the overall processes and lack the expertise to execute the functions optimally. As a result, they can waste time on the process, delay staff payments, and lose sight of compliance regulations, which may have far greater consequences for business growth.
On top of this, if you are a small business with one employee responsible for payroll, what happens when they are off sick or on holiday? Payroll can’t just grind to a halt, so someone else has to pick up the slack. If this person isn’t well practised in payroll processes, errors can occur and potentially land you with fines from HMRC.
Outsourced Payroll Management
As you may have rightly guessed, outsourced payroll management is when a business hires a third party to oversee its payroll. Outsourced payroll providers ensure the payroll system is hassle-free and employees are paid accurately and on time each pay cycle.
Payroll outsourcing allows businesses to tap into the expertise of payroll service providers, taking advantage of their technological tools that help to streamline payroll processes while eliminating any margin for error. When choosing to outsource payroll, businesses enjoy smooth-running payroll operations and accurate and timely disbursement while maintaining employees' data security and adhering to compliance regulations. As a result, many companies enjoy the benefits of payroll outsourcing and are confident it's the future of payroll management.
Like other payroll management options, outsourced payroll has its risks. For example, payroll outsourcing costs could be too high for small businesses, making it inaccessible to all enterprises that see its value. Also, your employee data is transferred to a third party, so your provider must be reputable and in compliance with all industry regulations, as we are here at Pay Check.
In-house Payroll or Outsourced Payroll?
Choosing between in-house and outsourced payroll might be tricky for you, but having evaluated how many businesses within the UK have leveraged the expertise of payroll service providers in the UK to grow their businesses, we'd advise you to do the same. Establish outsourced payroll services to resolve any problems in-house payroll management causes your business.
Even small businesses can find payroll bureau services in the UK at a pocket-friendly price. Consider Pay Check - we’re a leading payroll services provider for businesses in the UK. We offer companies top-notch value that not only saves money but saves time and eliminates stress. With us, you can rest assured that your payroll is in safe hands.
If you’re ready to explore the option of outsourced payroll for your business, contact us to get a quote and obtain that much-needed solution.