Benefits & Advantages of Payroll Outsourcing
Top 10 Reasons to Outsource your Payroll
With Real Time Information (RTI) PAYE reform set to change the landscape of the way employees get paid, Neil Lagden, head of Bond Payroll Services, reveals the ten top reasons to outsource your payroll.
Outsourcing can, and will often have, a strong impact to your business. Not only must you shop around to find a company that will suit your needs, but you should consider just why you want to outsource your company payroll in the first place.
Will it free up time and free you from processing lengthy employee queries over maternity pay, sick pay, or minimum wage? Can it provide a vital element of security and expertise if you do not know the rules of RTI or auto-enrolment (AE) inside out? And finally, will it keep your costs down?
Outsourcing your payroll is so much more than finding someone to process your payslips each month.
Here are ten top reasons to go down the outsourcing path.
Reduce cost – By outsourcing your payroll department, the requirement to invest in up to date software, headcount and all the other costs associated with running a payroll team is removed. The net result is overall a lower bill to run the payroll.
While people think outsourcing can be an expensive option, there is a wide variety and choice of different payroll outsourcing companies to suit different business types.
Reduce headcount – Organisations are always looking to run an operation with the leanest headcount possible. As such, outsourcing your payroll enables companies to maintain a much smaller body of staff to support payroll, if any at all – depending on the payroll outsourcing solution.
Outsourcing payroll often removes the need to employ a full time employee for work that has natural peaks and troughs in activity across the working months.
Improved efficiency – Streamlining the organisation’s processes internally allows payroll providers to pick up the time consuming duties surrounding payroll, which helps to increase efficiency within the business.
Strong payroll reporting helps you increase profits, and can be used as the definitive tool for workforce management. Good suppliers work hard to build strong relationships and get to know your routine, so sharing the workload in a way that suits you can be hugely beneficial.
Business continuity – Having the payroll function outsourced means that the reliance for disaster recovery and business continuity lies with the provider and not with the business. Disaster recovery is a big topic and issue for outsourced payroll providers and therefore the solution generally is more robust than a business can offer on its own.
A supplier who has your business at heart is more likely to want to see it develop and grow, rather than experience setbacks. Most have advanced systems to make sure procedures are in place and regularly tested.
Mitigate risk – Through outsourcing, organisations push the responsibility for compliance to the provider, as well as leaving the responsibility of payroll to an organisation whose core business it is, therefore, minimising the risk of errors which may occur on the payroll.
Sharing accountability, or removing it entirely from your business, can be a strong incentive to shop for a supplier. Mistakes can be made, and leaving it to the experts can help you sleep easier at night.
Increased knowledge pool – Rather than having one or two payroll staff who supports the business with limited industry knowledge, through outsourcing, organisations have access to many staff within the outsourced payroll business, offering a wealth of industry knowledge and experience.
Keeping up with the latest information, legislation and expert opinion in the sector can be a lot easier when it is delivered straight to you. Suppliers have access to a variety of materials, and often produce their own industry reports to keep you abreast of all you need to know.
Latest technology – Payroll companies by nature not only keep up to date with legislation changes and ensure that the software is compliant, but should also invest significantly in the services they are able to offer through advances with technology.
Buying and installing software for RTI compliance can be costly, especially if the number of employees that needs to be processed each month is a small one. Signing up with a supplier who has a large in-house IT team removes this necessity.
Compliance with statutory legislation – Basic requirements of a payroll outsourcer are to be compliant with legislation. The employees of the payroll provider are trained to be compliant and also the payroll software should be HMRC accredited, allowing the provider to be constantly up to date with legislation.
Reducing the burden of compliance and the risk of penalties can be a big incentive. Suppliers keep your data safe, in accordance with the law and keep you informed of new changes.
Improved service – Many years of experience mean that outsourced payroll providers have the skill, expertise and a track record of delivering effective solutions.
When your employees are paid on time, and accurately, moral will be strong. You will still retain control over your data and it will not be run without your approval, maintaining your jurisdiction over your business, just with less work.
Additional services – Payroll providers may offer complimentary services such as employee benefit consultancy including pension reform, international payroll, HR services and invoice finance.
Outsourcing offers a wide variety of incentives to businesses. Keep your options open and take the time to find which one will be a good fit for you. It’s all about getting the most out of your payroll management, while focusing your efforts on growing your own business.
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