Although it can be tempting to want to handle every element of your business yourself on an in-house basis, outsourcing certain tasks and functions can ease some of the pressure on your shoulders and ensure you are spending both your time and your resources wisely.
There are many benefits inherent in outsourcing payroll, so let’s run through some of the key reasons why you might want to consider working with an external payroll expert.
Save Time and Money to Invest in Core Business Activities
Well-optimised payroll processes often require a lot of time and resources that may be better invested elsewhere in your business. In addition to ensuring your employees get paid on time, there are myriad other responsibilities that fall under the payroll umbrella, such as reporting terminations and new hires, managing deductions and benefits, and ensuring tax compliance, all of which can take up a great deal of valuable time.
By outsourcing your payroll needs, you won’t need to invest in costly in-house payroll personnel and software. This also means that you and your team will have the bandwidth to focus your full attention on your core business activities whilst also ensuring that you aren’t unnecessarily overspending when you could be saving.
Guarantee Compliance with Complex Tax Laws
As a business operating PAYE in the UK, you will need to complete a number of set tasks every month. These tasks include:
- Recording the pay of your employees
- Calculating employee deductions, such as National Insurance and tax
- Calculating employer’s National Insurance contributions
- Generating payslips
- Reporting pay and any deductions to HMRC
HMRC expects reporting to be sent on time, and you will incur penalty charges unless you can provide a valid reason for lateness.
Not only will external payroll services ensure that your responsibilities as an employer are being met, both to your employees and to HMRC, they will also keep up-to-date with changes to requirements and regulations so that you can feel confident that your business is fully compliant with taxation laws and won’t be met with any potentially costly charges in the future.
Improved Accuracy and Efficiency in Payroll Processing
There are many moving parts to the payroll process, which is why implementing seamless processes is key to ensuring both accuracy and efficiency. Experienced payroll service providers work with tried and tested methodologies and technologies to deliver top quality, accurate outcomes consistently.
Your business will also benefit from access to the leading systems and software used by experienced payroll service providers in other ways, too. For example, advanced systems have better processing and reporting capabilities as well as enhanced automation and integration abilities, which allows for the seamless sharing of important data and automatic updates to streamline the process and minimise errors.
Advanced technologies also have the ability to provide key insights into your payroll processes via analytics tools, which can help your business to identify:
- Where and when errors are most likely to occur
- How much those errors are costing your business
- Whether they impact other areas of your operation
- How to implement strategies that will prevent the same mistakes from being made in the future
As is the case with most business strategies and processes, there are always optimisations that can be implemented to drive better outcomes. So, it can be helpful to view your payroll strategy as another aspect of your business that will benefit from refinements made using data-driven insights.
Enhanced Data Protection and Security
Your payroll information is extremely sensitive, so you need to ensure that it is properly protected. In-house payroll processes and software can often be vulnerable, and you will need to invest a fair amount of time researching precisely how well-protected your payroll data is if you choose to go down this route.
However, by outsourcing your payroll to an external provider with solid credentials and a great reputation, you can have confidence that you’re playing your part in keeping highly personal information safe and secure.
Additionally, professional payroll services also have processes in place to mitigate the impact caused by system failures, which will prevent the loss of vital data and keep your payroll process up and running. This will allow you to continue to deliver the seamless payroll experience your team deserves whilst minimising unnecessary stress and worry for you.
Improved Flexibility to Adapt and Scale with Business Growth
The demands on your payroll processes will only increase as your business grows, which can put even more pressure on your shoulders and take up even more of your valuable time. Businesses choosing to outsource their payroll don’t need to worry about whether their processes can keep pace as their business grows, as external payroll services have the skills, knowledge and strategies in place to scale upwards as required.
Finding a Trusted Payroll Provider
It is important to do your research when looking for your ideal payroll service provider, as this is the only way to ensure that you’re making the right choice for your business. When looking at potential partners, you need to feel confident that they have the experience and knowledge to deliver the high quality service your business deserves.
In addition to exploring the specific services they offer and the technologies they utilise, it is also often beneficial to seek out peer reviews from other businesses who are utilising their services, which can help you to validate their claims and determine whether they can meet the needs of your business.
Crucially, your chosen partner must be able to demonstrate they keep up-to-date with latest tax changes that could impact your SME, this being an example from AK Tax which also includes some actionable insights to help businesses thrive.
There are myriad benefits that come from working with a trusted payroll services provider, which is why finding your ideal partner should be on your business to-do list this year.
