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5 Key Reasons You Should Be Outsourcing your Payroll

Monday, November 12, 2018

As businesses grow and legislation changes, many businesses consider outsourcing their payroll function in a bid to increase efficiency and remain ahead of their competition. Admittedly, larger businesses can afford to maintain big payroll departments, dedicating their own personnel to payroll solutions, while for smaller businesses, an in-house payroll service can prove to be a real money burner.

If organisations were to calculate the hours their in-house staff members spent on payroll-related activities, they’d be alarmed at the sheer level of time that gets wasted. Yet, with such potential to heighten efficiency within a department, outsourcing payroll - either fully or partly - is proving to be an effective solution to the altogether time-consuming payroll problem.

Legislation seems to constantly change…

With so many changes occurring this year alone, from changes to the government’s national living wage (increasing to £7.83 per hour from £7.50 for over-25s), to increases in minimum contributions for automatic enrolment pensions, not to mention some firms needing to pay the Apprenticeship Levy, it’s safe to say there are frequent challenges to contend with when it comes to newly introduced legislation.

So how can such challenges be eased? Well, having payroll fully managed on an outsourced basis, means no longer having to handle the nitty-gritty tasks, leaving businesses with more time to concentrate on the work that really matters. But what other benefits can be gained from outsourcing?

Five Reasons for Outsourcing your Payroll:

1. Reduce your Legislation Strain

As mentioned above, the legislation is constantly changing, and with change comes stress, not to mention a whole lot of time and effort spent in preparing for it. By outsourcing your whole payroll function to an external provider, you can minimise your stress levels and pass the responsibility over to your provider, reducing your legislation strain.

Not only do we see the pay rate increase on an annual basis (each April), over the years we have had to consider changes such as real-time information (RTI) penalties, shared parental leave, removal of the 26-week rule for Statutory Adoption Pay and many more.

Changes in legislation can prove to be a real challenge, particularly when they happen so often. So, no longer having to concern yourself with such changes by instead relying on a professional outsourcing supplier, can feel like a huge weight has been lifted.

2. Benefit from Experienced Payroll Professionals

Using a few dedicated staff to manage your company payroll may prove beneficial for some, but outsourcing brings with it a much wider pool of experts in their field, ensuring you benefit from professional payroll expertise, with years of dedicated experience.

This includes specialist areas that might otherwise be missed when relying on one or two in-house personnel, from payroll processing and pension auto enrolment, to tax assessments and benefits processing as well as universal credit management and HMRC compliance.

Outsourcing some or all your payroll functions, makes payroll administration quicker and more convenient than ever before, where you can benefit from professionally sourced business finance and even, favourable credit terms (subject to approval).

3. Save Time

There’s no disputing that payroll is a vital process within every company, be it large or small. Outsourcing this to an external provider can streamline your payroll processes and save you hours every month. It’s no wonder then that more and more companies are outsourcing either all or part of their payroll functionalities.

One of the major challenges to in-house payroll processors is the sheer amount of time it takes to complete and the inability to find much in the way of efficiency. That demand on your time increases as your staff grows, so outsourcing is a great way to escape this problem.

4. Reduce Costs

For companies that have many internal staff completing payroll and HR tasks, it’s likely they’re experiencing an overcapacity in existing procedures (and possibly an insufficient management of tasks). In either case, this means there is scope for the area to be streamlined and cost to be reduced. Outsourcing is often associated with a financial saving, particularly for companies that have too many staff designated to payroll processes.

5. Heighten Efficiency

By outsourcing payroll, your staff’s time can be spent on other higher value activities, while optimising payroll procedures can help to save time, reduce errors and increase transparency across the entire payroll and HR area within your business.

Additionally, your payroll provider should be able to give you access to a wider variation of reports to suit the individual needs of your company. Standard reports can include anything from payroll summaries to general ledger reports, payroll analysis to variance reports and HMRC payment summary reports.

Accountancy Partners Can Help…

It’s essential you know precisely what it is you wish to gain from an outsourcing provider before you begin your search for one. Should you have any questions or queries you’d like to find the answer to before committing, we’re happy to help. Contact one of friendly team at Accountancy Partners today.

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