During periods of business growth it can be tough for companies to meet the demands of increased scale or to evenly allocate resources, which may already be stretched thin, across all areas of the business. They may also need additional expertise that they don’t currently have in-house, but not have the need or resources to justify a new full-time hire. For business owners who want to make the most of their own time, outsourcing time consuming or more complex tasks – such as payroll processing – can be a savvy move.
WHAT IS PAYROLL OUTSOURCING?
Simply put, payroll outsourcing is handing off all pay related duties to an external company or individual. They will provide accounting, tax, and legal support. This ensures that employees are paid the correct amount, on time, and that the company’s finances are legally compliant. Other financial benefits, such as holiday pay or commissions, can become complex and confusing. Outsourcing payroll means everything is taken care of with minimal risk to businesses.
THE BENEFITS OF OUTSOURCING PAYROLL PROCESSING SERVICES
SAVE TIME AND MONEY OVER IN-HOUSE
Learning how to manage your books can be time consuming. But time isn’t the only resource that internal payroll processing can use up. Payroll processing software can be expensive, as is hiring dedicated payroll personnel. Training, software, and payroll admin all have the possibility to incur unnecessary costs that quickly accumulate.
Conversely, a key benefit of outsourcing payroll is that it frees up valuable time for businesses. Additionally, with a range of providers and services available, businesses are able to outsource in conjunction with their budgets.
REDUCE ERRORS AND OMISSIONS AND MANAGE HMRC OBLIGATIONS
Errors are a principal concern of many businesses trying to manage payroll internally. Without due time or the needed expertise, mistakes can be made and result in hefty fines.
Outsourced payroll companies have the processes and systems in place to make sure that nothing slips through the cracks, and mistakes are not made. Payroll processing providers also help to stay on top of changing legislation and government regulations, so all submissions are HMRC compliant, bringing you peace of mind.
TRAINING TAKEN CARE OF
For many businesses there is not a need for a full time hire, but training an existing member of staff can be costly and time consuming. They may not have the capacity to take on another responsibility and their current workload, meaning submissions could be rushed and mistakes may be made.
The expertise of dedicated external providers means that they can begin straight away. Your time is valuable, and a key benefit of outsourcing payroll is that there’s no lengthy onboarding or training processes. The services are simply available when you need them.
LEVERAGE EXISTING TECHNOLOGIES
There are so many payroll processing or accountancy systems on the market that it can be difficult for a business to know where to start. With a massive range of features, add ons and integrations, at a variety of price points, how do you decide which suits your needs? Outsourced payroll companies often have a range of systems already at their disposal. Many automate admin tasks and calculations, reducing the risk of human errors and ensuring that all data is processed and held securely. Technology integrations can also provide more accurate data insights and help identify any anomalies, accessed through a secure portal.
HOW TO CHOOSE YOUR OUTSOURCED PAYROLL PROVIDER
If you’ve decided that the benefits of payroll outsourcing are a match for your business requirements, it’s important to choose your provider carefully. With no room for error, you need to have full trust in your provider’s experience and their ability to meet your business’s needs accurately and on time. So what should you look for?
How flexible are they? Your payroll provider should provide a range of packages and services to meet your business’ needs. The features that you will need and the budget you have will vary by industry and business model. Every business is different, and your payroll provider should have the agility to meet your requirements. At MSP, we have a range of packages available to accommodate businesses at every stage of growth.
Payroll data is sensitive information that needs to be held and dealt with securely. Data compliance and security should be a priority for your payroll provider to protect your business from any potential breaches. A good outsourced payroll provider should have the systems and processes in place to prevent you from being hit by any fines or other penalties.
Ensuring that your payroll is in safe hands is crucial, so carrying out due diligence on potential payroll companies is a key step in choosing your provider. Some software providers, like SAP, do offer tech solutions to help with vendor evaluation, but this isn’t always necessary. Conduct a background check to ensure stable leadership and solid finances – a quick check through their accounts and director appointments on Companies House can provide valuable insight. You should also look for testimonials from customers and peers – some payroll providers will use these in their marketing.
Payroll outsourcing is a time and cost effective solution for businesses of all sizes across all industries. If it’s right for your business, MSP Secretaries can help. We provide secure, HMRC compliant outsourced payroll processing services, with flexible solutions for businesses at all stages of growth. To further discuss why you should outsource payroll processing, to find out more about the services that we provide, or to get started, please contact us.