Many Businesses Can Benefit By Outsourcing Certain Functions
When you run any sort of business, there are some parts of your operation that are nothing but mundane activities that make you no income whatsoever and are simply an overhead. Many business owners fail to realise that by contracting some of these activities out to specialist firms they can save themselves a lot of money, and at the same time a lot of hassle.
There are also jobs which have to be done in order to produce products or provide services, but that again costs too much to do in-house. For example, you might be a manufacturing company that makes a certain product that is built up of many parts. A lot of those you can do yourself, but there may be some which would be better done by another firm. You might need a part which requires the use of a very expensive machine which you don’t have.
Now, of course, you can always purchase the machine to make the part. However, you might be a lot better off outsourcing that particular part to another company that already has the necessary machine, saving you the cost of buying it yourself.
Some jobs may be regular, while others may be occasional, such as having an accountant who does your end of year taxes and for whom you have no use the rest of the time. Others are ongoing and need to be done all year round.
One Such Job Is Payroll
One of these is payroll, which can be a serious issue for growing companies and for small businesses. Large businesses can afford to do their payroll in-house because they have many employees and therefore it pays them to hire a payroll manager to carry out the work.
Smaller companies, however, do not have a requirement for a full-time payroll manager. That means that if they continue to do payroll in-house it will have to be a part-time job for an employee who was originally hired to do something completely different. When you have that sort of situation, you are taking that employee away for, say, two days a week from doing something that may have been more productive.
Not only that, but you are going to have to pay for that employee to be trained in the production of payroll which is a complicated task for people who don’t understand it. Indeed, it can be a complicated task for those who DO understand it. You will also need to have the software to run it. In addition, whoever is doing your payroll will also need to keep up to date with all changes in legislation which can be a time-consuming task on its own.
For every pay period, each employee must have their hours totalled and verified for accuracy, and then multiplied by their rate of pay. Then it is necessary to calculate the appropriate amount of tax and deduct it to arrive at the correct figure. It can get even more complicated when you have salesmen on commission because no two pay periods will be the same.
Then, if an employee has benefits such as child support, you have to make additional calculations. You also have to calculate the amount to be deducted for those in your auto-enrolment pension plan. When you multiply all this by the number of employees you have, it becomes a mammoth task.
This is an aspect of your business where it pays to use payroll outsourcing services in the UK because it completely gets rid of all of the hassle of doing it yourself. Your payroll gets done on time, and most importantly, is accurate, so you don’t finish up getting fined by HMRC for mistakes.