Payroll is a critical business function, but it is a non-core function of most organisations as it is not a profit generating centre. i.e. you don’t charge your customers for it.
Payroll has no direct impact on increasing sales or enhancing business performance or development but get it wrong and it can create a world of pain, consuming time and money, upsetting staff and removing focus away from the core activities.
Realising the above surely all organisations should outsource their payroll? Yes, but many still undertake it in house.
So, what do you actually gain from outsourcing payroll?
1. Physical cost savings
If you calculate the hours your payroll employees and associated staff spend on payroll-related activities and add to this stationery costs, payroll software costs, computer costs, training costs and printing costs. It’s not surprising that you save money by outsourcing.
2. Business cost savings
Having fewer payroll employees will cause a ripple effect on cost savings throughout an organisation, reducing costs for HR, IT, office space and utilities costs, through to savings on employers NI, holiday pay, sick pay and or maternity /paternity pay.
A new client explained to us recently a difficulty they experienced before outsourcing: – Consider, it is pay month end and you need to run payroll, but your payroll staff member is absent for sickness or on holiday, what do you do?
A. ensure you always have another staff member that is fully trained specifically to jump in
B. Jump in yourself and hope you get it right and no other areas of your business suffer
C. get a temp in and hope they understand your systems and software
D. ask your accountants to resolve the issue… ouch, expensive!
The answer was a combination of three of the above and immediately the following week they outsourced.
Outsourcing payroll means you always have your staffing resources covered, allowing your existing staff to concentrate on more essential business tasks or even allowing for a reduction in staff members. Outsourcing also give you better scope for expansion of your company with scalable services suited to your business.
As mentioned earlier Payroll mistakes can create a world of pain and stress. A good payroll provider will check and check again and because they have a working procedure they are far less likely to make a severe error than your in-house staff.
If you have a small in-house payroll team it is unlikely they will have the wealth of experience and training that a good payroll provider will have at their disposal. Any good payroll company will know the latest legislation.
Providing the correct training for payroll staff is expensive, whether it is payroll software or legislative tax training, it pays for your staff to be up to date, but this can be difficult to achieve. In addition, many smaller organisations view payroll as an added responsibility to an existing staff’s members core role which again often means a deficiency in skill sets. A good payroll provider will maintain a high level of training within their team across software tax and legislation. On average Payroll Champion’s employees receive 3 hours training per week.
In our experience business owners don’t really have the time to closely supervise their organisations payroll for fraud, Phantom workers, payment manipulation, absences and overtime falsification… these are some of the activities a good payroll provider will be looking for when running payroll. Our experience, knowledge and software can assist in spotting fluctuation and so alert clients.
1 to 5 or 5 to 500 whatever the size of your workforce Payroll Champions can offer small and medium sized organisations total tailored payroll services to meet any payroll requirements. Our outsourced solutions are developed so you don’t end up paying for services you don’t need.
9. Peace of mind
Outsourcing your payroll can bring peace of mind to a business owner or manager, no headaches, no stress and no hassles. You are simply left to focus on running your business knowing your payroll obligations are dealt with correctly, efficiently and lawfully.
Payroll Champions are specialists at payroll, it’s all we do. Therefore, we can process even the most complex payrolls with great speed, providing a quick turnaround time on your payroll when required.
Organisations that operate in house payroll normally discover that their payroll efficiency is totally dependent on the staff undertaking the work. They run the risk of staff sickness or holidays happening at the wrong time of month or may be even losing a key member of staff that operates the payroll. If any of these happen it is extremely difficult to quickly substitute or replace them, causing a logistical nightmare come payday. There is also the wasted time you will have to spend training new staff members or helping existing staff members to understand your payroll system.