Are you a small business owner who is handling payroll processing yourself? Payroll can be complex to navigate and errors are much more than an admin issue for employees. In a study by Sage, it was revealed that 51% of surveyed employees acknowledged that it would cause them to lose trust in their employer, with 35% saying it would prompt them to look for new employment.
Given these statistics, it’s not surprising that 61% of all businesses in the UK opt to outsource their payroll services. This choice serves to safeguard their financial stability and ensure the wellbeing of their employees.
In this article, we discuss some of the benefits to outsourcing payroll.
Why outsourcing your payroll is a smart move
If you have an in-house finance department, you might be unaware that there are a huge number of benefits to outsourcing your payroll, to both your bottom line and also the finance department.
With all the best intentions, business needs shift and priorities change and it’s important to be both flexible and agile. Outsourcing your payroll enables you to adapt to any changes in your budget, and it won’t impact your workforce or slow down their salary payments.
It’s no secret that payroll regulations can be time consuming and complex to navigate. Outsourcing your payroll services to a company that specialises in payroll ensures accuracy and compliance with regulations. Having peace of mind that payslips and pensions schemes (to name a couple) are all correct is one less thing for you to have to think about.
Save time and money
Immediately, you’ll notice the time savings of outsourcing your payroll. From entering data to researching new laws or updates, the amount of time that payroll requires quickly stacks up. By removing those admin heavy tasks, not only is your payroll now compliant (see above), but you’ve freed time up for you or your colleagues to focus on the tasks that really matter.
Typically, outsourcing payroll services costs less than creating an in-house payroll department as you’re not hiring someone who specialises in this area. Additionally, outsourcing your payroll will reduce the mistakes that commonly result from manual calculations and data entry.
Although you’ll have to pay to outsource your payroll, compare this to the cost of the fines and penalties that can result from mistakes, outsourcing payroll may actually save businesses money.
The word expertise can get thrown around a lot, but payroll legislation and regulations are notoriously complex and time consuming, so having experts on hand to deal with everything makes sense. Any problems, concerns or simple advice is always just a phone call away as payroll companies employ teams who are experts in payroll regulations, tax laws, and accounting, and outsourcing means you benefit from all that expertise.
Reduce your spend on hiring, training and software
Outsourcing your payroll can save businesses money in the long run by reducing redundant systems. The cost of software can quickly add up as well as become out-of-date. Businesses can also avoid costs associated with hiring and training in-house payroll staff, and there is also the savings on office space and utility costs.
Outsourcing payroll services can also help to prevent costly errors, such as miscalculating tax withholdings or misclassifying employees.
Outsourcing payroll to a provider that invests in state-of-the-art technology and has backup servers can help employers safeguard their confidential data.
Scalability is crucial in any business, and so if you’re outsourcing your payroll, make sure they can easily handle payroll tasks for businesses with just a few employees, as well as those with hundreds or thousands of employees. This means you can scale your payroll services, without any impact on your business. If your business is growing, you need a payroll provider that can grow with you.
Why outsource your payroll?
Outsourcing payroll services is an especially cost-effective and efficient solution for businesses that want to streamline their operations and focus on core business activities.
With any business decision, there are pros and cons and outsourcing payroll is no different. However, outsourcing payroll tasks to specialists will ultimately save businesses time, cut down on staffing costs, and ensure compliance with payroll regulations.
If you’d like to speak to one of our Payroll team about how outsourcing could change your business, get in touch.