Payroll sounds deceptively simple. And yet there is more to payroll processing than merely issuing a payslip or P45.
For starters, on the 5th of every month, you need to ensure you make those real-time submissions. Then by the 19th or 22nd of the next month, you need to make payments to the HMRC towards PAYE and NIC. Plus, at the same time you need to see that you are using the right P6/P9 notice, are checking WPP compliance, making the pensions payments and also seeing to other aspects like NMW requirements. Whew! And that’s just the start.
So, do you go hire someone as an employee to tackle this delicate part of your business or do you (heaven forbid) try it yourself?
Before we go into an analysis as to whether DIY or do it yourself if a suggestion you should give it a shot for – here is a few factors that should be kept in mind even when thinking of outsourced payroll services:
For starters, on the 5th of every month, you need to ensure you make those real-time submissions. Then by the 19th or 22nd of the next month, you need to make payments to the HMRC towards PAYE and NIC. Plus, at the same time you need to see that you are using the right P6/P9 notice, are checking WPP compliance, making the pensions payments and also seeing to other aspects like NMW requirements. Whew! And that’s just the start.
So, do you go hire someone as an employee to tackle this delicate part of your business or do you (heaven forbid) try it yourself?
Before we go into an analysis as to whether DIY or do it yourself if a suggestion you should give it a shot for – here is a few factors that should be kept in mind even when thinking of outsourced payroll services:
- Cost
- Time
- Space
- Expertise
- Output
Factors to consider before choosing to self-payroll
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Factor
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To hire an employee
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To do it yourself
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Payroll Outsourcing
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Cost
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Cost is the main blow here as you need to offer a suitable wage to sustain employee interest
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Time is money; so invariably, there is a sacrifice attached
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Lowers the cost comparatively while you get the same quality
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Time
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You need to monitor the employee and see if the man-hours are being spent appropriately. In most cases, payrolling is hardly a full-time job
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The time you could better invest in building your business or focusing on clients is diverted here
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You can set the deadlines and you needn’t worry about scheduling tasks
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Space
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You’ll need to provide the space, software and other requirements adding to the cost front
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Doesn’t impact you like it does when hiring an employee
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Your provider will arrange the same
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Expertise
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Since most employees are stand-ins when it comes to payroll you might be having someone do part-time or shifts but this might mean that they would not be that well versed or up to date like a pro
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A factor to consider as half-knowledge can be dangerous and lead to unnecessary penalties
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That is a prerequisite. In fact, some providers are even willing to work on the payroll software of your choice
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Output
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You’ll need to keep a check on the productivity levels. Had you outsourced it would probably be a few hours work for the provider. How do you justify this for a full-time employee?
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You might take more time than an expert and so your own productivity is going to see a drop
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You only need to pay for the work that you’ve asked for – thus, win-win all the way
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Not yet convinced? Perhaps it is time to bust a few myths so that you too can appreciate outsourcing to be – a worthwhile solution.
What about GDPR compliance?
This should not be an issue as long as the service provider is GDPR compliant. You can ask about how they intend to meet GDPR standards and also discuss how they will keep your data secure.
It sounds like a specialization – that won’t exactly be cheap
Outsourced payroll services as the name states are cost-effective as the very reason people choose to outsource is so that they get the same quality of service at a significantly lower price. Thus, you should not expect any compromise as far as quality goes.
How legislatively grounded and updated will they be?
Since you will be dealing with a professional – this shouldn’t be a problem. After all, it is their business to be well versed about payroll.
Outsourcing sounds a long shot. How will we communicate?
Technology and the internet have certainly made things easier. You can email, use Skype or simply just pick up the telephone. Even if you are outsourcing, your provider is going to be speaking in English so language should not be the barrier.
Sounds risky especially with payday dangerously near. What if they don’t meet deadlines?
Your provider’s role is to ensure that your business’ payroll is running smoothly. Thus, they are accountable to you and as professionals, no one is going to scrimp on deadlines if it is a good firm.
Will I be charged for each amendment?
This depends on whom you choose to outsource to. Most firms are quite flexible on this front and there are even a few that don’t charge for amendments. Finding the best deal will get you the ultimate package that’s to your benefit.
So, now don’t you find payroll outsourcing services to be a relief?
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