When you first start a business it makes sense to manage as many facets of its workings as you can. This helps keep costs down and gives you a strong sense of the way your business operates now, and the direction it should take in the future.
Ideally there will come a point where you need to begin to hand tasks over to other employees or companies. One of those tasks might be your payroll.
There are many options available when it comes to making the decision to streamline your payroll function. You can pass the task to your accountants, a decision which might seem logical given they already have knowledge of your finances. But this won’t always be the most cost-effective option. You can read about the different options for payroll service here, but for the purposes of this article we are going to focus on Out-Sourcing your payroll.
Out-sourcing your payroll means you hand the task over to an external company. Some offer the option for you to upload payroll details each month onto their system, which will likely be the most cost effective solution, and others will manage the entire process from start to finish. You will need to provide the details of the hours worked/salary rate/holidays taken, etc, each month but the outsourced company will manage the inputting and processing of the payroll, including sending tax information to HMRC.
Let’s take a look at some of the specific benefits this option provides for you and your business.
Benefits of Outsourcing Payroll
It saves time
Whether it’s you managing the payroll or another employee, outsourcing the task creates more space in the days for you and your team. This allows attention and energy to be placed elsewhere. Things like marketing, operations, product development, sales and customer service can all be given more attention. This are the things which can help grow your business and therefore a very valuable way to spend your time. Not to mention, there must be a reason you started the business you did in the first place. Removing the repetitive task of payroll give you back some time to focus on what you love about what you do.
It saves costs
Having to employ someone specifically for payroll can be much more expensive than hiring an outside provider. You could bring someone in house who specifically manages your payroll, though as processing payroll for SME’s isn’t necessarily a full-time job, there would have to be some other work available to this new hire to justify their expense.
Working with a professional payroll company can also mitigates the risk of mistakes. Mistakes which could potentially result in costly penalty fees, not to mention the time lost trying to rectify those mistakes.
It can also save on your technology costs as you will not need to subscribe or manage any additional software which is required to do your payroll.
Increased Accuracy and Compliance
Payroll seems an easy process, but managing the system can be complex and errors can have significant consequences. Both for your business and your employees. As part of their standard practice, payroll service providers will be up to date on regulations, tax laws and other legal requirements. Their expertise is not just in the systems used to generate payroll but also in what reports must be done, compliance and regulations which must be followed.
Payroll management involves sensitive and confidential information. It can be a target for cyber attacks and other security threats. Small to medium business are often high on the list for these types of attacks as they typically do not have the same security procedures in place as larger companies. Outsourcing your payroll service to a reputable provide can help you ensure the security and confidentially of your data and reduce the risk of data breaches and cyber attacks.
Support and Expertise
If things go wrong, or you are confused about any part of the process, you have the ability to pick up the phone and speak to someone who knows your business. Whether it’s helping manage maternity leave, pension contributions, knowledge about changing regulations or just advice on best practice, having someone whose name you know on the other end of the phone can go a long way to make a stressful situation less stressful. Their expertise on payroll systems, regulations, compliance and knowledge of every changing tax laws can make the difference between a correctly processed payroll or one that is filled with errors and needs to be fixed.
A Provider You Can Trust
The benefits for SME’s when it comes to outsourcing payroll really do boil down to a better use of internal company resources. You can streamline your operations, reduce the risk of errors and mistakes and be certain you are up to date on any legal requirements. This means you can focus on core business operations. Operations that can help your business grow and improve your bottom line.
Bigmore Payroll & Pensions provide peace of mind with an efficient, accurate service and charges designed to offer excellent value. We know the importance of getting payroll right every time and we strive to provide a first class, tailored service to meet your business needs.
To find out more about how Bigmore Payroll & Pensions can work with your business, fill out the contact form below.