If you run a small business in the UK and employ any number of staff, you probably are familiar with some of the challenges that come with payroll management. If you don’t have any accounting or business training, this can be a tedious task – one that is prone to error-making and is a distraction form the work you need to be focused on, which is your actual business.
If this is you, outsourcing your payroll may be the perfect solution to relieve you of the hassle. While it may be an additional cost, it is far outstripped by the rewards – when you choose the right firm that is. Here are the benefits that you stand to gain from payroll outsourcing.
1. Saves Time
For any small business, time is a valuable resource, especially as you will probably be multi-tasking over a range of functions already. Outsourcing payroll frees up your time, therefore allowing you to concentrate on the most significant business functions – the ones that bring in the money.
2. Saves Money
Although it may not seem like it, having yourself or your employees handle payroll for the business is not just a waste of time, it could also be a waste of money, since every hour spent away from money-making activities should be counted as lost opportunities. When weighed against the often moderate payroll outsourcing cost that would be paid to an external payroll processor, it is simply not worth it in most cases.
3. Prevents Errors
When you have non-professionals poring over piles of data and making a series of calculations, mistakes are almost inevitable. Mistakes, depending on their severity, might mean further wastage of time and more money lost in attempting a rectification, not to mention potential penalties.
4. Prevents Fraud
Regardless of how much you trust your employees, providing them with the intimate details of other staff members’ financial and identity information may expose your business to liability in the event of identity thefts and other forms of fraud. These risks are best passed on to a professional payroll processing firm, which will be set up to mitigate and prevent such occurrences more effectively.
5. Provides Expertise
Tax and other payroll regulations change from time to time, and the average small-business owner is not likely to have the time nor the expertise to keep up with these changes. In larger businesses, entire departments may be dedicated to following, documenting and interpreting changes in regulatory regimes, and if you do not have these kind of resources, it may make some sense to rely, instead, on a professional payroll processing firm.
6. Minimises Tech Costs
Payroll software costs money. If you decide to do your payroll in-house, this is an additional cost you may have to incur. The payroll processing company will have a much better economy of scale as their software expenditure will be spread out over a far higher number of clients, thus reducing the cost per client.
Payroll is a delicate function that every business must execute; however, if you lack the resources to dedicate to executing payroll management, it may be best to simply outsource this to a professional payroll processing firm or agency.