The 5 Main Benefits To Outsourcing Your Company’s Payroll24th August 2018
Before we go into the 5 main benefits to outsourcing your company’s payroll, I first want to highlight a serious issue concerning the use of outdated payroll software that in some cases is no longer fit for purpose.
A recent survey carried out by Kronos discovered, there are as many businesses using antiquated payroll systems (29%) as there are businesses using new ones. The reasons for this include familiarity, the pain of converting to new systems and cost as reasons not to change. But the reality is that the cost of sticking with old payroll software could be much higher.
Outdated software could potentially put your data and client data at risk and mean that you are no longer GDPR compliant. In really extreme cases, outdated software could open your computer up to being remotely hijacked and linked to a malicious network carrying out attacks on other networks.
Buying new payroll software is one option, but that does come with the requirement to master the new system. The other, of course, is to outsource payroll, so buying, learning, updating and securing your payroll software becomes someone else’s problem.
Xero and Quickbooks have payroll plugin options but these are arguably too simplistic and only satisfy very small and simple businesses. It is not worth using poor payroll software just to get integration between your payroll and book-keeping. Especially when there are better out sourced options available.
Whilst I may be focusing on payroll in this article, there are a whole host of other HR related hassles that Simas can help you with. There’s dealing with employee contracts, logging and tracking holidays and sickness. In addition, keeping up to date details for all your staff. New accounting rules mean holiday tracking is needed. It is advisable for companies to run their holiday years so they are be in line with their accounting years.
For these additional elements, we can recommend Breathe HR – cloud software which stores all your key employee data. It has various levels of access so that your employees can check and update their own details. They can check holiday availability and put in a request etc
But getting back on topic, here are The 5 main benefits to outsourcing your company’s payroll:
Big businesses can afford to maintain big payroll departments. For small businesses however, an in-house payroll service is a money burner. If you calculate the hours your employees spend on payroll-related activities, plus payroll software costs, training costs, printers, printing and distributing payslips, creating tax documents etc, you could be surprised by the result when you compare that amount to the cost a payroll service provider can offer.
According to XpertHR the ‘Financial Staff’ sector had an employee turnover rate of 9.5% in 2017, this was surprisingly high compared to other occupational groups. These roles are essential to running your business, in particular your Payroll Manager as they ensure all your employees get paid on time, as well as remaining compliant with current legislation
The recruitment process is costly and time consuming for hiring any new member of staff, on top of this, the average UK salary for a payroll manager is – £34k to £39k
(Hays, 2018). Never mind the cost of training them, you don’t need to take hours out of your day to train them and they can easily hit the ground running and provide you an excellent professional service
The payroll function can consume a large proportion of your staff resources, especially if the staff in charge of the payroll are not trained specifically to deal with it or have the payroll function as a smaller part of their overall responsibilities. The benefits of outsourcing the payroll include freeing up these resources allowing your staff to concentrate on more essential tasks. You may even be able to reduce your staff’s size. Outsourced functions also give you better scope for expansion of your company with scalable services suited to your business.
#3 Speed & Accuracy
As payroll service providers are specialists, they can process even the most complex payrolls at a great speed, providing a quick turnaround time on your payroll when required.
Payroll mistakes can be painful, upsetting and stressful. A good payroll service provider is far less likely to make a serious error than your in-house staff, as you are paying them for their expertise, knowledge and finely-tuned checking procedures they have in place.
#4 Reliability and Flexibility
In-house payroll activities function as reliably as the people doing the work. With a payroll service, output, speed and quality won’t vary in accordance with holidays and sickness. There is always a risk that you may lose one of the key members of staff that deal with your payroll and all their knowledge walks away with them. If this happens you could find it extremely difficult to replace them, causing a logistical nightmare come payday. You also won’t have to spend time training new staff or helping them to understand your business’s payroll system.
#5 Auto Enrolment
The increased complexity with the Auto Enrolment rules are a very good reason to look to outsource now. Especially if you are simply too busy to set up an internal auto enrolment solution. You can hand over your responsibilities to a trusted third party, who will take care of your auto enrolment duties. Auto enrolment also means considering salary levels for each payroll run. Something that the aforementioned antiquated software can struggle with. In addition, you can also rid yourself of having to process all of the extra pension communications that need to be sent out (by law) to the right employees at the right times in their auto enrolment journey.
With outsourced solutions, we are flexible to meet your specific business model. So you don’t end up paying for something that includes services you don’t need or miss key features that you do need.
If you are considering outsourcing your payroll, get in touch to see how we can help.