Outsourced Payroll Processing – Is It Right for Your Business?
A number of companies now offer payroll outsourcing services in the UK, but most businesses, especially SMEs, have not integrated this approach into their operations yet.
This is partly due to the concerns that business owners have over costs and security, unwilling to hand over payroll responsibilities to someone else.
Others just don’t realise that this method is an option, or that it can be suitable for all types of businesses in all sectors, including start-ups.
We take a look at the situations in which you might want to consider outsourcing your payroll, and some common payroll options for small businesses.
When You’re Expanding
While some businesses opt to handle payroll in-house through manual bookkeeping or payroll apps, other business owners prefer the expertise of a professional payroll provider.
When considering whether to outsource this function, the time and resources required to complete essential payroll functions is a major aspect of the decision-making process. And this is even more important at times when a company is growing and taking on more staff.
Despite many owners being concerned about staying compliant with tax laws and regulations, as well as the sheer amount of time it takes to process payroll manually and manage taxes, most businesses do payroll manually — using some kind of third party online solution or desktop software.
When You Can’t Afford to Make Errors
Once you’ve hired your first employee, payroll responsibilities will continue every pay period. Due to the complexities of payroll processing and the implications of getting it wrong for you and your staff, it requires a significant time commitment on a daily and weekly basis. As such, it can place a significant burden on owners who would rather focus on other activities that could benefit their organisation.
For employees, a small mistake can influence an employee's final paycheck of the year, at a time that coincides with the holidays.
Also, missed hours or improper pay rates can decrease an employee's pay, which could cause dispute or resentment at the very least. These mistakes can negatively affect your employees' motivation and your ability to run a productive organisation.
Whether it's calculating payroll amounts, generating in-house reports, preparing or remitting payroll taxes and returns, there will always be room for error when it comes to payroll.
Having someone to outsource your payroll activities to can guarantee you don’t make any costly mistakes in the future.
When You Need More Time
No matter how many employees a business has, processing payroll demands time and attention to detail. This often comes at the cost of valuable time that could otherwise be spent on more pressing business priorities, such as building revenue or serving customers.
When You Need More Security
Outsourcing payroll to a reliable and professional bureau can offer peace of mind when it comes to your confidential payroll data. In addition to no more redundant backups and multiple server locations, your data will be less vulnerable to attack than if you are to use cheap payroll software or handle everything in your office.
Is Outsourcing Payroll Worth the Cost?
Even if you have only one employee, you might want to seriously consider a payroll service like Pay Check to help you with preparing payslips and paying and reporting payroll taxes. To learn more about payroll outsourcing services in the UK, don’t hesitate to get in touch!