If you currently manage payroll in house, you’ll know that it requires an individual, or perhaps even a team, with a thorough knowledge of the PAYE tax system. However, these skills can be quite hard to come by, and they don’t come cheap. Another option can be outsourcing your payroll, but what does this mean, and what are the advantages of doing it?
What is payroll outsourcing?
Payroll outsourcing involves hiring an external company to handle all payroll functions. When it comes to choosing your payroll partner, you need to consider what payroll services you require. Some suppliers provide a basic service, whereas others provide the full package including liaising with the HMRC and maintaining full compliance so your business never has to deal with payroll.
There are specialist Payroll Technology Consultants who provide a full suite of payroll services should you require them, such as:
- Payroll System Selection
- Payroll System Pre-Procurement Support
- Payroll Process Mapping and System Design
- Payroll System Implementation Services
- Payroll Data Migration Support
- Payroll Project Management
- Payroll System Testing and Quality Assurance
- Payroll Systems Project Audits
- Ongoing Payroll System Development
- Re-Implementation of Payroll Systems
- Payroll System Health Checks
- Payroll Audits
- Back up for your business as usual payroll team during migration projects
What are the advantages of outsourcing payroll?
It frees you up to focus on your core business
Unless payroll is your personal speciality, as a business owner it can become a time-consuming task that takes you away from more pressing matters.
Your business needs you on the ground to ensure it operates successfully. Being shut away in a back office tackling payroll each month is likely not the best use of your time. Instead, it makes sense to hand over the reins to someone who specialises in payroll day to day, and can take the weight off you. Knowing this task is being completed each month, without you having to get involved, will be a real weight off your mind and will give you more time to focus on your core business.
It reduces the need for training in-house payroll staff
Whoever is doing your payroll in house will require thorough knowledge of the PAYE tax system. Often this means having to hire fully-qualified staff, or use time and budget training staff up. If a member of staff leaves, it means you then need to start to recruit (and possibly train) all over again.
Outsourcing payroll takes away the need for recruiting, training, and retaining in-house staff. Providers of professional payroll services will have a number of highly-trained staff within their team, which means that there will always be someone to cover your payroll. It reduces concerns over staff absences too: you can be safe in the knowledge that there will always be someone covering your payroll which isn’t always the case with a small in-house team.
It removes the expense of buying and maintaining a costly payroll system
A professional payroll service will take care of all payroll systems for you, managing all systems and software so you don’t have to.
Buying and maintaining your own payroll system can be costly, but when you work with a managed payroll service these upfront costs will be absorbed by your payroll partner.
It minimises the risk of errors, omissions or late payroll tax filings
Professional providers of payroll services are experts at what they do: this is what they concentrate on every day. This means that the risk of errors, omissions, or late payroll tax filings is extremely low.
Choose a payroll service provider who has a good reputation and is a leader in their field. Look for payroll consultants who are CIPP accredited as they will have the necessary skills to translate complex payroll scenarios into solutions.
It helps you stay compliant with your tax obligations and PAYE responsibilities
Tax and PAYE are areas that often cause concern for business owners, as they’re important to get right, but at the same time they’re not everyone’s forte.
This is where a professional payroll service provider can be a great help to your business. A good payroll service should become a partner to you- almost a member of your team. This should be someone you can trust and lean on when it comes to all matters tax and PAYE: find a payroll service provider who can be the helping hand you need.
Can I outsource payroll on a short term basis?
The short answer is yes, you can. There are specialist payroll companies who can manage your payroll on a short term of temporary basis, to suit your needs. It may be that the person doing your payroll is going on parental leave and you need a specialist to take over until they return. Maybe you’re switching payroll software or implementing a new HR technology, therefore need a specialist to take the reins until the dust has settled. Whatever your situation, a company that specialises in outsourcing payroll will be able to help.
This blog was written by Phase 3, they are an exhibitor on the HRTech247 Consulting & Advisory Partner floor of the Partners Hall. You can visit their virtual space here.