Whether you are a small or large business owner, you may have considered outsourcing your payroll matters. There are various reasons why companies often initially process payroll themselves. Indeed, some companies consider in-house processing to be a more cost-effective and efficient method.
However, for a lot of companies, this is usually not the case. In fact, there are several benefits that can be obtained through outsourcing your payroll.
Dealing with the payroll in-house is often a time consuming and resource demanding job, requiring awareness of constantly changing HMRC requirements and meeting detailed legislation and strict deadlines. When considering the time spent completing your payroll and taking into account the penalties for mistakes and missed deadlines, in-house processing may become a more costly solution.
Additionally, with the recent onset of auto enrolment and compulsory workplace pension schemes, the compliance obligation on employers has significantly increased. Many businesses are asking our IFAs in Hawsons Wealth Management to deal with the pension obligations and are also asking us to operate their payroll. This enables us to provide an integrated service and helps to ensure the compliance obligations are met.
How flexible is their service?
Different businesses have different needs, so it is important that your payroll provider can offer a flexible service tailored to the specific needs of your business. Additionally, your needs may alter over time, especially when experiencing growth and change – you don’t want to have to look for a new payroll provider, you want to have the option to adjust your agreement and package when necessary. Are they willing to be flexible on time scale and deadlines? For example, if you provide the information later than normal, will they still manage to process the payroll on time?
Are they willing to fix their prices?
Ensure that the price is a reasonable and affordable solution, which fits within your budget. Find a service that is tailored to your needs. It is also important that you choose a payroll provider who sets a fixed price; to ensure that there are no hidden charges and that the final bill is as you expected.
How responsive are they?
It is crucial that you have a point of contact with the payroll provider who is easily accessible and responsive to your needs. Ideally, your payroll provider should be proactive and constantly looking for ways to manage your payroll matters more effectively.
What experience do they have?
As HMRC requirements are constantly changing with more obligations on the employer, it is crucial you use third party providers who have specialists who are used to these obligations. It is their responsibility to make you aware of the ever-changing legislation so you can feel at ease knowing that your business is compliant with all new legislation, so having a wealth of experience is essential. Without experience, your provider could be prone to making mistakes, which can quickly become expensive. A consideration that you must take into account is who will be in charge of your account once you have agreed to outsource your payroll. It is a common criticism of payroll providers that they outsource or ‘pass down’ the payroll matters. Ideally, you should look for a provider where all staff dealing with payroll have years of experience.
Do they have the necessary expertise?
Given the increased compliance and burden of Real Time Information (RTI) and Auto Enrolment, it is crucial that your payroll provider has the necessary expertise to ensure you comply with new legislation.