If you run a small business, then it is likely you feel as though you are juggling many different plates all at the same time. There is a lot to keep on top of and many different responsibilities will fall to the same people.
This is why a growing number of small businesses are now looking to outsource their payroll services as a way to free up time and ensure that one of the most essential jobs within the business is done professionally and efficiently.
In this article, Rogers Spencer look at how outsourcing payroll services can work and what the benefits are for small businesses in the UK.
What is payroll outsourcing?
Your payroll tasks can be outsourced to an external company who are able to handle this on your behalf. Whilst you might prefer some to handle a more basic service, others can provide a full package that involves liaising with HMRC and maintaining full compliance so that your business does not have to deal with any aspect of its payroll requirements.
This can be outsourced to an accountant or bookkeeper or a specialist payroll company. There are many different advantages to doing this, and so here we take a look at some of the most important ones.
Time efficiencies
Small businesses can often find that time is the thing that they are most short of. Those in senior positions are left to manage a number of different roles, irrespective of their own individual skill sets. This can often mean that they are not doing the jobs that they intended to do as they are busy being pulled in other directions.
Payroll is a task which can take up a vast amount of time for any individual within a business, and so it can be extremely costly when it comes to time considerations.
By outsourcing your payroll requirements to a specialist company, you can immediately free up hours, if not days of time for someone in the business to be concentrating on other tasks.
Reducing errors
Payroll can sometimes be a complicated task, and so it is important that you get it right. Any errors can result in huge problems both for the business and the staff, which can then cause trust issues and leave people with independent problems.
If you outsource your payroll to a professional company, there is a much smaller chance of there being any problems, so you can be confident that payroll will be actioned correctly and on time, every single time.
Cost effective
Outsourcing your payroll needs to another company might sound like an added expense, but it can actually be a more cost-effective option. Not only does it free up hours of time for staff members to be more productive, but it can also remove the expense of having to buy and maintain your own payroll system.
These can add up to huge amounts of money and so hiring a payroll company to do it for you is often a cheaper alternative.
Maintaining compliance
Getting your payroll right is not just about ensuring that staff members receive what they are due at the end of the month, but it is also necessary in order to stay compliant with both your tax obligations and your PAYE responsibilities.
They will be able to ensure that everything your business is liable for is calculated and paid at the right time and therefore you will always have a clear picture of where you stand on the tax front.
This means there is a much smaller risk of you having miscalculated your tax requirements or missing anything important.
Any mistakes in the world of tax could not only land you with a bigger bill than you anticipated, but also some very serious penalties which are best avoided.
Reduced training needs
If you deal with your payroll in-house, then someone is going to need to be fully trained in how to do this. Often this responsibility can fall to more than one person in order to cover for things like holidays and illnesses.
This training is usually detailed, extensive and very expensive and is a burden that many small businesses could live without.
By hiring an outside payroll services company, you can avoid the need for anybody having to go through this training, as you will be dealing with fully qualified professionals with huge amounts of experience and expertise in the area.
Data security
All payroll tasks require you to deal with a significant amount of sensitive data on behalf of your employees. This is something which must be handled with the utmost care according to all relevant GDPR laws, but it is also something which is often a target for hackers and cybercriminals.
You therefore have a responsibility to make sure that this data is kept as safe and secure as possible. This means employing the services of an outside payroll company who will have made significant investment in their own robust security measures.
This means they are in a better position to safeguard any sensitive information and reduce the risk of data breaches or identity theft.
Scalability
One of the best things about outsourcing payroll services is the flexibility that this offers. When your business grows, your payroll needs will become more complex and so any knowledge or training in payroll that you have at the beginning may not be enough as you begin to expand.
When you outsource, you work with a business that will be able to accommodate any fluctuations in your workforce size, whether it is going up or down, without the need for you to make any significant or dramatic adjustments to your own business.
Outsourcing payroll is now becoming a much more cost-effective and time-effective option for small businesses who are under pressure to keep budgets tight and still remain compliant with a range of different laws. The use of professional payroll services means that they are able to stay on top of their payroll needs and concentrate on driving their business forwards.