Managing payroll is an essential part of business but it can require a substantial investment of time, money and effort. Therefore, some companies are attempting to get around this by outsourcing their payroll services to dedicated vendors. This idea is particularly relevant post-lockdown as many businesses are struggling financially and facing a reduced workforce. When you factor in the effect that furlough is having on payroll services, many companies are now considering outsourcing as a viable option.
There are a variety of benefits to outsourcing your payroll but business owners should consider all aspects before taking the leap.
When you’re running a business, time really is money. Any time, effort and resources that you invest into one part of the company will have a knock-on effect to the others. Payroll is a particularly time-consuming task and one that will only continue to grow as the business takes on new employees. As payroll services involves financial information, it requires an attention to detail, again eating up resources that could be spent on the day to day running of your business. You may even have a designated member of staff to complete your payroll duties, who will require their own salary- costing the company valuable funds.
When you outsource payroll to another company, you will of course have to pay a fee but the overall process is streamlined. Eliminating this task in-house will free up valuable time, manpower and in some cases funding, all of which can be invested straight back into the business.
Another aspect of payroll duties which can be problematic for many businesses is security. You are handling incredibly sensitive information and if it falls into the wrong hands, it can lead to identity theft, embezzlement and a potential PR disaster. Not only do you have to worry about the data itself but also the server in which it is stored. Companies which specialise in payroll services utilise the absolute best security measures to protect this information, including data encryption, secure cloud servers and electronic payments. Attempting to replicate this infrastructure in-house would be incredibly expensive, therefore outsourcing is an easier and cheaper option.
Dedicated payroll providers have access to cutting edge technology and infrastructure, ensuring that the services they provide are the absolute best possible. These include cloud-based systems, which improves data visibility, audit-tracking and integrity. Centralised payroll information is also better for customers as it allows for easier and faster access to data, rather than waiting days for an in-house request. Expert providers can guarantee the best security, accuracy, efficiency and reporting of your payroll data. Considering it would be extremely difficult to replicate this in-house, outsourcing is an attractive alternative.
Not every business owner is trained in payroll management and it can involve many complex, specialised processes. It’s not only salary which has to be managed but also payments to other organisations, including HMRC and pension providers. Delays or mistakes in your payroll services can lead to serious consequences, including unhappy employees, fines, penalties and investigations. Therefore, handing this aspect of your business off to another company doesn’t only save time and money, it also reduces stress. You can be rest assured that your payroll duties are being carried out by experts, ensuring that you meet all of your demands promptly and without error.
The outsourcing of in-house duties within the business world has been growing in popularity in recent years. Whether it’s security, communication or financial services such as payroll, outsourcing can offer companies the best of both worlds.