22nd January 2016
With the ‘Be Like BIll’ images flooding the internet we thought we’d show our own ‘payroll version’.
But Bill has the right idea.
If you thought that outsourcing payroll just meant not having to worry about getting your workers’ payslips out on time, you’d be wrong – outsourcing payroll can provide free up valuable time and provide real support to your business as it develops and grows.
While an HR department is seen as a clear source of support for a business (helping with workforce welfare, engagement and valuable reporting), payroll is often seen as a purely administrative finance function that has to be done, but which does not itself directly assist the development of the business.
In fact, payroll is, sadly, more often seen as an unwanted but inevitable cost, or even a drain on resources. But with the right expertise and technology, payroll can be a positive asset to the way a business functions, becoming an enabler to development and growth.
In this article we look at some of the very visible business services that outsourced payroll can deliver – and then look at some of the less obvious but extremely valuable business support functions a good managed payroll and payroll bureau service can provide.
TIME SAVING OF COURSE (BUT THAT’S A GIVEN)
The most immediately obvious benefit to a company of outsourcing payroll processing is to relieve the business of a long list of repetitive administrative tasks.
These tasks include:
Accurately calculating pay, tax, pension contributions and myriad other payments and deductions on every pay cycle – weekly, fortnightly or monthly (perhaps with multiple pay cycles for different areas of the workforce)
- Printing and distributing payslips
- Arranging secure BACS payments to staff bank accounts on the correct dates
- Real Time Information (RTI) reporting to HMRC for every pay cycle
- Assisting with the implementation of Auto-enrolment
- Pensions and auto enrolment administration
- Ensuring joiners, leavers and exceptions (e.g. sick pay, maternity leave etc) are correctly processed
- Completion of required forms such as P11D’s, P45’s, P60’s etc.
- Year-end submissions to HMRC accurately and on time
- Dealing with individual employee queries
Provision of a dedicated payroll manager so that in the event of any problems or queries there is always an expert at hand to sort them out quickly, further reducing company time spent on troubleshooting
EIGHT OUTSOURCING BENEFITS YOU MAY NOT HAVE CONSIDERED
But outsourcing, whether to a fully managed or part managed payroll bureau solution, provides a host of additional benefits which, while perhaps not directly visible on a day to day basis, can result in measurable time and cost savings, as well as practical support for your business.
- NO ON SITE SOFTWARE
Because your payroll software becomes the responsibility of your payroll service provider, this saves your business vast amounts of time spent researching and procuring suitable software – and then having to constantly update and upgrade every time there is a new release. You are also saved the cost of license renewal and upgrade costs.
- NO ADDITIONAL HARDWARE
Access to any good outsourcer should require only regular IT access, saving you the cost of buying additional dedicated tablets,laptops or PC’s just for running payroll, as well as finding the space to house them.
- NO BACKUP OR SECURITY REQUIREMENTS
Your provider is responsible for organising backups of your company’s payroll data and ensuring secure access, which means less risk to the business as a result of lost or compromised payroll data. The best provider will have something like ISO 27001 security accreditation and, if BACS accredited, will have the highest audit figures for their service.
- FLEXIBILITY
The best outsourcers will have highly configurable software to suit many different types and size of business and a range of workforce types. So if your workforce grows suddenly or involves different types of contract, such as more part-time or temporary workers, they’ll adapt the payroll system to suit – allowing your business complete freedom to experiment and grow in whatever direction makes sense, unhampered by payroll issues.
- FUTURE-PROOFED
Future changes to tax, pensions and payroll arrangements (and there are likely to be lots more in 2016) won’t require ongoing management time to understand and implement. When the next change comes along it is your provider’s problem, not yours – saving you immense amounts of management time, plus any capital expense that might be have been involved to implement it.
- LESS NEED FOR IN-HOUSE EXPERTS
You no longer have to employ people with specialist expertise in areas of tax and payroll legislation in order to ensure compliance – or pay for expensive consultations with experts every time a new legislative change comes along. A good outsourced payroll provider will upgrade any software as required to meet all new requirements and ensure you are kept informed of any changes that you need to know about. And if you need additional advice you should be able to consult a team of experts at any time for no additional cost.
- PREDICTABLE ONGOING COSTS
Once the initial set up phase is completed, your company pays only a fixed per-payslip charge. This means you will have manageable and predictable monthly costs that are always proportionate to the size of your workforce. Fixed per-payslip charges will greatly assist with your cashflow, forecasting and business planning – invaluable to any business especially if other costs are fluctuating.
- EFFICIENT ESCALATION
If queries or problems arise the escalation route is to the outsourced payroll provider, not up the management chain to directors, or outside the business to expensive consultants or technical support. This means fewer distractions for you, senior managers and directors leading to better focus on running the business and keeping it successful.
