There are some incredible benefits of outsourcing payroll to a reputable provider. Some clear, such as time savings and reduced compliance risks. Other less so, such as retained control and the ability to customise your services.
Whatever your payroll challenges, it’s likely that outsourcing your payroll will offer the solution you’re looking for. So, we’ve rounded up the top nine benefits of outsourcing payroll, to demonstrate why it’s a smart, efficient move for your organisation to make!
The benefits of outsourcing payroll
1. Risk reduction
Compliance errors, miscalculations, late filings, and payroll fraud (to name but a few!) can lead to costly penalties and legal issues. One of the biggest benefits of outsourcing payroll to a reputable provider is that these risks are significantly reduced. Your outsourced payroll provider will bear a lot of the responsibility for ensuring compliance and will use their payroll specific expertise to manage the process with timeliness and accuracy.
2. Cost savings
While there are costs associated with using a payroll service, outsourcing often proves to be more cost-efficient that keeping your payroll function in-house. Compared to the costs of employing either an individual payroller or a payroll team in house—salaries, HMRC contributions, employee benefits, and so on—you’ll likely see some savings when you outsource your payroll. Payroll outsourcing costs typically work on a price-per-payslip basis, with economies of scale involved the larger your headcount.
3. Full compliance
Whether it’s the deadlines and requirements related to paying employees, income tax, national insurance, or other aspects such as pensions, payroll providers will that your organisation meets all the necessary regulations. They also provide you with all the relevant information that you need to store to demonstrate compliance, and this record-keeping is invaluable when facing compliance audits or dealing with employee queries, helping you maintain transparency and trust.
4. Higher accuracy
When it comes to accuracy in in-house vs outsourced payroll, payroll errors happen twice as frequently when running payroll in-house, compared to outsourced payroll. So, when you outsource to payroll professionals, you significantly reduce the chances of payroll errors.
When errors happen, there’s more work for an in-house payroll team as they spend time fixing those mistakes cycle-to-cycle. And as well as the direct financial implications of payroll errors on your organisation, there’s a financial risk to your employees. Late payments, for example, can lead to additional costs being incurred by your employees—such as bank charges—all of which hugely damage trust between you and your workforce.
5. Service continuity
When you run your payroll in-house, disruptions can happen for a number of reasons. That might be absence in the payroll team, technical failures, disruptions in the wider organisation, or anything else that will impact how and when the pay cycle will go ahead.
One of the big benefits of outsourcing payroll is service continuity. As there’s a dedicated team of payrollers, your payroll cycles won’t be impacted by absence. And service providers will have detailed disaster recovery plans in place, offering an extra layer of security should issues arise and ensure your payroll goes ahead without interruptions—even in challenging situations.
6. Retained control
Outsourcing any part of your organisation can be a daunting prospect. However, when it comes to outsourcing your payroll, this is a concern you can put to rest. A payroll provider operates in partnership with you, to ensure that everything runs smoothly.
They take care of the entire payroll process, handling the intricacies of calculations, tax filings, and more. This support, however, does not equate to losing control. You retain access to all important data and reports, allowing you to oversee and review the payroll processes. This ensures that you can stay in control while alleviating the stress associated with the intricate payroll tasks.
7. Customisable services
Every organisation is unique, with specific requirements and processes surrounding their payroll. Many payroll outsourcing providers offer customised processes that cater to your unique needs. You can tailor the services to fit your specific payroll process, reporting requirements, and more. This level of customisation ensures that you receive a solution that aligns seamlessly with your business’s individual needs.
8. Time savings
Outsourcing your payroll provides significant time savings for your team. It relieves your employees of the day-to-day payroll processing, allowing them to focus on areas that will truly drive your business forward—saving you both time and money in the long run.
9. Advanced reporting and analytics
One of the biggest benefits of outsourcing payroll is that you’ll be provided with all the key payroll reports you need to fully understand what’s going on with your payroll. More sophisticated providers will also have their own advanced reporting tools built into their own technology, giving you access to valuable data. Although, if they don’t have their own technology, they’ll likely use a platform from another provider so will still be able to offer you the capabilities.
The benefits of outsourcing payroll are clear
The benefits of outsourcing your payroll go far beyond just cost savings. When you look at the bigger picture, it just makes sense—compliance, accuracy, efficiency, control, time!
We’d love to talk to you about our outsourced payroll services. We’ve been in the business for over 40 years, and we’ve developed one of the most advanced payroll platforms available today. Get in touch to find out more.
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