Being an employer carries a weight of responsibility. At the most basic level, this is a responsibility to pay your staff through a your Payroll department on time so they have the money they need to live their lives. The more employees you have, the more people you have an obligation to provide for so they can feed themselves and their families, and pay the bills.
We rarely think of it in those terms, but that is what employment boils down to.
It would be one thing if managing payroll was just a matter of making sure however many people you employ get paid the correct amount on time. Add in the mire of ever changing regulations concerning tax, holiday and sick pay, pension contributions and reporting and it becomes a major distraction from everything else required to run a business.
Here are four reasons why outsourcing your payroll accounts makes sense if you want your focus to be on making your business a success.
If you are a small business still handling payroll yourself, ask yourself how much time you are spending every month on that one area. Is it time well spent? What else could you be doing? Are you coping with the burden of it? If you have an admin team or even an HR department handling payroll, the same kind of questions apply – how long does it take, and what else could they be doing with that time to benefit the business? Whilst keeping staff paid and happy is essential, payroll is ultimately a functional, repetitive task which in itself adds no value to a business – the kind of task that can be allocated elsewhere while your own staff focus on what will add value.
This follows on closely from saving time, because after all time is money. People often baulk at the idea of outsourcing as an additional expense without realising what good value it can be. For example, hiring a third party to handle your payroll accounts will always be much cheaper than hiring someone internally. Payroll accountants are specialists who work at volume with a number of different clients, so they offer efficiencies of scale and expertise. Added to that, you save on overheads such as payroll software and printing costs.
Payroll is surrounded by a forest of regulatory red tape, and it is extremely easy to make mistakes with tax codes, holiday pay entitlements and so on. Not only is this inconvenient for your employees, it puts the business at risk, too – companies will face sanctions for filing employment taxes incorrectly. Professional payroll services build their businesses on not making these mistakes. Not only that, they will deal with HMRC on your behalf, including end of year reporting.
Outsourcing payroll is beneficial to the efficiency of your business all round. The accountants you hire will have access to the latest payroll software and are paid to stay on top of the latest regulatory changes. They will calculate payments quickly and accurately, make payments on time directly to employees via BACS, and also take responsibility for managing all employee records, such as tax code changes, P45s and P60s and payslip history. As pointed out above, that frees you and your staff to focus on making your business more successful, rather than spending valuable hours on admin.
If you would like to learn more about outsourcing your payroll accounting, our Manchester based payroll service team can provide you with a fully comprehensive confidential off-site service, regardless of the number of employees.