Payroll can be a timely and be a high cost, so many companies look to outsource their payroll to free up time to focus on the main core of their business
Companies have 2 choices when it comes to their payroll:
- Team or individual process in house or
The Advantages of Payroll Services?
The cost savings
For large companies it makes sense to maintain a payroll department in house, For smaller companies it is not always cost effective to do so. Assess and calculate how many hours is spent on payroll, including associated tax and other related activity. Compare the cost of paying wages to someone in house or time spent out of your business by yourself. Then research the cost to the price that a payroll company will charge. Be sure to take into account all other factors such as stationary, printing costs, IT and training to keep up to date with legislation. Once research and assessed it may be more cost effective to outsource.
The Time Element
Processing wages is a very time consuming activity, which requires attention to detail and keeping up to date the latest legislation relating to Income Tax and National Insurance. By outsourcing this function, you and your staff can focus on the main elements of your business and allowing you to devote more time to increasing sales and revenue.
Access to the latest technology and legislation
A professional company will have access to all the latest technology and will have staff that are fully up to date with the latest legislation. Upgrading software and monitoring the latest legislation can be a financial drain on any company.
If a person is not paid on time or not paid correctly it can have a great impact on team moral, a professional company will guarantee and put a service level agreement (SLA) in place to ensure that wages or errors are rectified promptly.
In house employees may discuss wages which, may cause upset within the workplace, a good company will have the confidentiality agreement within their SLA.
The Disadvantages of Outsourcing Payroll Services
Your assessment of costs will have shown if it is more cost effective to keep your payroll in house
When outsourcing payroll, vital employee data and salary information must be shared with the company that you have hired. A reputable company will adhere to strict privacy protocols, employers do become nervous about divulging this information. It is safer if the company advises you to provide this information through an online database, as opposed to the more traditional methods i.e. calling or faxing, so make sure ask if they provide an online services.
It is important to assess your costs in house versus the cost of hiring externally, checking out testimonials and ensuring that if you do decide on a outsourcing payroll services they will offer you a bespoke service.