Why should you outsource payroll?
For any business owner with employees, the most important single part of their business may be making sure those employees are paid (and paid correctly) on time every time. The bigger the business, and the more employees you have, the more opportunities there are for mistakes, especially if:
- Your employees are paid on an hourly rate rather than salaried
- You pay different rates for overtime pay
- Some or all of your employees are on commission
- You operate a bonus structure
Payroll is a significant responsibility and, over the course of a business year, can take up a significant amount of time. After fielding some questions from a client who’s recently taken on their first employee, we thought we’d outline the five biggest reasons to use an outsourced payroll service.
Payroll Legislation Frequently Changes
Financial legislation as a whole evolves constantly, and keeping up to date is the essential first step in compliance. It also requires someone to invest the time to do so – and as we’re discussing payroll, it’s worth remembering that time worked is money spent.
Even then, it’s not enough to know current regulations; it can be important to know about any forthcoming changes that could affect your business once they come in, to help your planning horizon.
Outsourcing your payroll means passing this baton on to an organisation with years of experience handling payroll, staffed by qualified professionals whose continuing professional development requires them to keep their knowledge of regulations up to date. This doesn’t just save you time but it gives you peace of mind.
Pension Auto-Enrolment
At this point it’s widely known that UK employers must offer a workplace pension to all qualifying employees.
On the other hand, when an employee qualifies, what criteria the workplace pension must fulfil, and what options are available both to your business and your employees is much less common knowledge.
A professional payroll provider, like ICS Accounting, can gather all necessary information, apply for pensions on your behalf, and manage workplace pension scheme implementation – and more!
This means you can remain compliant with current legislation, ensure your employees receive the information they need to, and have everything ready for audits by the Pensions Regulator as needed.
It will also be easier for you to keep track of your pension contributions and (if and when they increase) make sure you know what to expect. The last increase was in April 2019.
Minimising Costs
Especially for small businesses, an in-house payroll service may not be cost effective compared to outsourcing. Setting up and updating the software, carrying out training, creating tax documents and more all take time and require investments. Outsourcing this can save money in the long run.
It can also cut out certain hidden costs (annual software licences, etc) which might be missed during initial research.
Streamlined Process
Most of all, handling payroll externally lifts the load from your own team, freeing up their time to focus on other things. It also means that rather than spending the time gathering the information and calculating payroll summaries and variance reports, you have access to these at a glance, making it easier to find efficiencies in your operations.
Reliability
We saved the biggest one for last. Just as we said at the start of this blog post, paying your employees correctly and on time, every time, is vital for a business; whatever else we do to build morale will crumble if they have to worry about where their next rent instalment is coming from or what effect this might have on their savings.
When you outsource your payroll, you can rely on a qualified team of professionals. Especially if the alternative would be one individual in your team taking responsibility (when you might need to worry about the lack of double-checking, the speed of their work, or simply what happens if they’re on leave or ill at the wrong time, outsourced payroll has an obvious advantage here.
A team also means continuity; where one employee might leave your business, taking that knowledge with them, an outsourced payroll service means even if one of their team leaves, there’s still continuity of information for your organisation.
We’re well-established as a payroll provider with a fully qualified payroll team and years of experience. If you’d like our support as your business grows, why not get in touch?
