Reasons to Outsource Payroll
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Have you considered: Why should a small business outsource payroll? We look at the benefits of outsourcing payroll services and the reasons why your business may want to outsource its payroll.
Why Outsource Your Payroll?
Outsourcing your payroll to a third party provides several benefits to any business. By putting your payroll in the hands of an expert team, you'll have access to new technology and expertise that would otherwise be lacking if you had your payroll in-house.
Additionally, it saves you a substantial amount of time so that you can focus your attention on other aspects of your business. Payroll processing can often feel like a drain on both resources and hours due to its complexity and tedious nature.
By outsourcing your payroll functions, a professional team will handle all payroll information and pay runs regularly, allowing you to focus resources on bettering your business and making money.
Benefits of outsourcing payroll services
Get accurate, compliant payroll on time, every time
Payroll errors are extremely common, more so than you would expect. If any one of the 14 required pieces of personal data is incorrect or missing when processing an employees payroll, then you're faced with a payroll error. These errors will often frustrate or stress your staff, as well as cost you money.
For example, an incorrect or late employee tax submission can lead to a fine from the government. If there are any changes to reporting obligations and legislative compliance, you will need to consider them too.
Small businesses can often find it difficult to stay on top of the constant changes to legislation and tax codes, as it requires people to be constantly aware and ready to implement changes and new processes.
All of that hassle can be alleviated by outsourcing your payroll. Specialised payroll software used by professional payroll providers ensures your payroll will be on time and accurate every single time. If there are any legislative or tax code changes, they will quickly know about it and adapt your payroll to be compliant.
There are several security risks involved with in-house confidential payroll data. One example is an intentional data breach - a disgruntled employee could leak confidential information about workers as a result of a payroll dispute. Cyber attacks are becoming increasingly common and can be devastating for businesses.
In particular, phishing emails are a common attack vector that could result in your employee leaking confidential information to what they believe is a trustworthy source. In extreme cases, your network may be compromised by a ransomware attack, resulting in the loss of essential employee information and payroll history.
Many businesses simply don't have the time and resources to dedicate a significant amount of time to cyber security training. By outsourcing your payroll processing to a reputable, GDPR compliant business, you can have peace of mind knowing that your data will be secure.
Get time back
Time is money, and outsourcing your payroll provides your employees with more time to attend to essential business matters. Approximately 30% of all small businesses spend 6+ hours every month processing payrolls. For most businesses, these extra hours could be well spent on other important work. Larger businesses benefit from payroll outsourcing too.
Having to add an entire payroll department is almost unavoidable as a business grows, as the payroll processing for the hundreds of employees becomes increasingly complex. By outsourcing, businesses won't have to spend time employing, training and managing a payroll department.
Save on costs
Depending on the size and type of your business, outsourcing payroll processing could generate significant cost savings long term. By outsourcing, you can access valuable payroll services without the need to employ a dedicated internal team.
Your business can save on both infrastructure and people. New businesses benefit from the reduced upfront cost, and established, larger businesses have more money for key stakeholders and shareholders in your enterprise. Countless companies find that outsourcing their payroll actually saves them money instead of costing them.
Handling payroll is often very time consuming, and you may face expensive fines if you file any forms late (or if they contain errors). The penalties can quickly add up, which will cost the company a significant amount of money and stress.
When should I outsource Payroll?
If you are unsure whether an outsourced payroll solution is right for you, you can ask yourself these three questions:
Do you get stressed out with compliance?
Small businesses, in particular, find it difficult to keep up with the ever-changing legislation, constantly having to adapt and rework their payroll system.
As a business grows, the problem can become increasingly more complex. Outsourcing your payroll to a reputable company can help alleviate all of the stress. You can have confidence that your pay cycles will be on time and accurate.
Additionally, the third-party payroll service will have readily available staff to answer any related questions you might have, and they can provide useful advice.
Is there a more efficient use of your time?
It can be remarkably time-consuming to add a new employee to payroll, as you have to enter a lot of information to satisfy the government requirements. Smaller businesses often don't have this "spare" time as they work at an unrelenting pace.
On top of having to fill all the forms in, any errors in them can be overwhelmingly time-consuming to deal with too. Your business can save a substantial amount of time by handing over this work to an external payroll processor.
With all the extra time your business will have, you'll be able to spend more time with customers and offer an overall higher quality service that isn't as time-restricted. This is especially true for larger businesses, as they would otherwise have to implement a payroll division with time-consuming training, management, and meetings.
Do you feel buried under payroll paperwork?
One of the numerous advantages of outsourcing payroll is that it allows you to go paperless (or at least drastically reduce how much paper you must work through to manage your payroll). You no longer will have to deal with all the paper forms and spreadsheets piling up on your desk.
Not only will this reduce stress, but it is also beneficial for the environment. Customers think highly of businesses that make efforts to "go green", so outsourcing can offer an easy way to improve your business's image.
Furthermore, with digital payrolls, files will be misplaced less often, and spell-check technology will fix a lot of spelling and grammar mistakes.
You will no longer have to dread the tiresome manual payroll processing every month as automation will handle a large portion of it for you.
If you believe outsourcing payroll is the right call for your small business, the first step is looking for a reputable payroll partner to handle your payroll needs.
Trusted and experienced payroll specialists will guide you throughout the process, help you administer your payroll, and offer customer support.
Are you looking for small business payroll services in Redcar, Middlesbrough And North Yorkshire? Contact our team for help and advice with accounting and finance.