Payroll outsourcing. What are the advantages?

14 June 2016


In recent years, organisations have been investing in software solutions to bring their payroll back in-house. Now though, with the introduction of RTI and auto enrolment, which together represent the biggest changes to payroll in the UK in modern times, many payroll departments have been forced to consider a change of payroll software or solutions; the most obvious being looking at payroll outsourcing. Amongst other things, the reasons for this often include the non-compliance of their current system with the new legislation.

Benefits (yes, absolutely!)

There are benefits to outsourcing your payroll; one of the main ones being cost. It has been argued that in-house payroll is more cost efficient than outsourcing but consideration needs to be taken into account for example of the cost of hiring and training staff in the varying and sometimes complicated areas handled by payroll (like sickness, maternity leave, auto-enrolment and holidays), the cost of software and the pressure of ever changing demands on employers. Using a bureau also takes away the risk of being non-compliant and incurring HMRC penalties. 

Experienced professionals handling your payroll

Another advantage of this approach is that it removes the need for you to engage that expertise in-house. Rather than having one or two employees with limited knowledge, the payroll bureau will have access to a wealth of knowledge and experience.  A good provider will be able to provide you with tailored reports for example, helping you run your business more efficiently and give you important decision-making information. In addition, several companies may also offer services around all your employment related matters (such as corporate benefits or employer and expatriate tax).  Most importantly though, even if these folks are among the most efficient and knowledgeable you've ever met, if they're not approachable and accessible it's not going to work; so when you're looking around, be sure to run them through the "personable and friendly" test too! 

Getting it done!

One other advantage of outsourcing is speed. As payroll providers are specialists, they can process even the most complex payrolls promptly and without error, resulting in your payroll being turned around swiftly and efficiently.

It may well be for you

While we're not saying it's the best approach for every company, it's clear that outsourcing your payroll can present many advantages for a business. Not only can it be cost-effective, it allows you to concentrate on the business of ... well, your business! Not only this, it provides peace of mind for an organisation. Having your payroll processed by appropriately qualified people with the most up to date knowledge and using software that moves with changes in legislation, and covers even the most complicated areas of payroll means mistakes are avoided and employees get the best service possible.

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