5-reasons-for-outsourcing-your-payroll

Five reasons for outsourcing your payroll

 05 Nov 2018

Payroll is a very essential process for every business. But understanding whether outsourcing is the right options, so we’ve pieced together why outsourcing payroll is so popular and helpful to companies. Even though it doesn't add value to a business, it's still an important and legal obligation. 

If you're considering keeping your payroll in-house, there can be several complications such as the amount of paperwork, risks and pressure for the department while outsourcing payroll service will take this task from your hands and give you a professional payroll service.

Below are five reasons why businesses outsource their payroll

Cost-effective

Many businesses discover that the cost can be much more cost-effective than employing someone in-house rather as costs are calculated by the cost per an employee. The reason is based upon the idea that you will not be wasting resources and time training the employee. When outsourcing to professionals, you are entrusting to a team who are already qualified and prepared to undertake your requirements, without the risk of having new trainees making a mistake that could lead to large financial consequences.

The popular choice

Close to 95% of businesses outsource at least one of their process, and close to almost 61% of them are outsourcing their payroll. These high figures highlight the quality of the services payroll providers offer, and businesses understanding the importance of payroll being completed by professionals. Many businesses wouldn't want your employees being underpaid or make underpayments on tax. However, more and more companies are starting to realise the conclusion that outsourcing is the right solution for their business.

Safe personal data

Following GDPR, the implications it has had on businesses process’ has been huge, meaning the importance of keeping your data safe has never been under so much scrutiny. Therefore businesses are outsourcing to professional payroll providers who have the ability and infrastructure to adhere to legislation. You can be confident that all your employee’s personal information will be encrypted but they will still have digital access if required.

Accountable and transparent

When it comes to outsourcing payroll, the most crucial aspect is accuracy. This is why we recommend utilising an outsourcing solution, as errors with in-house payroll could have a huge impact on your business if something goes wrong. Whereas if you use the services of outsourced providers, this could be avoided. Many payroll companies will adhere to strict processes to ensure that commonly they will take the responsibility which falls upon them, however, you can try to change your provider if you are unpleased with their performance. A mistake by an in-house member would result in significant time-consumption to resolve the problem, rather than spending your time on more important matters.

Compliance

Complying with ever-changing regulations is always a time-consuming task and can be complex, whereas payroll professionals are updated as a company, meaning they have processes to ensure all their team members are up to date. You might also be underestimating how much impact could result from mal-practice including facing fines in the thousands and other associated costs if any mistakes are made. This is another reason for outsourcing your payroll to a professional provider as you will want to comply with all the legislation. Furthermore, your payroll must comply with HMRC regulations, especially while reporting on key figures in your business, E.G - The gender pay gap if your company has over 250 employees.

Under the Real Time Information (RTI) legislation. Businesses can be fined when they fail to submit specific information to HMRC each time an employee is paid. Unfortunately, this can be an exhausting task, especially for employers which run a weekly payroll process. Luckily, outsourcing can remove the burden and alleviate your time commitment or resources so you can focus on the important task to bring out the full potential of your business. This becomes a significant advantage to many growing businesses or new owners who do not have the experience to fulfil the obligations.

What next?

Each point justifies why a large proportion of businesses outsource their payroll to a professional provider. If you’ve come to the conclusion that you’d like to discuss the possibility of your payroll being undertaken by a professional provider, start by reviewing their charges so you’re aware of what it could cost. Then speak directly to the professional, they can advise you and get your payroll outsourced so you can get back to focusing on your business.