Payroll is partly a compliance issue, and partly an accounting element. This complexity is what makes payroll a complicated process, and hence the most commonly outsourced service. Payroll compliance is much more than counting, sorting, and writing checks. Unfortunately, payroll errors are more common than you might think.
Payroll is subject to many statutory and regulatory requirements that are always changing. The complex nature of laws and introduction of GDPR have made it difficult for practices to stay on top of payroll compliance. In an ever-changing regulatory landscape, reliance on legacy processes and in-house teams can leave accounting practices exposed to risk, with the threat of being penalised for non-compliance.
It is the responsibility of every accountancy practice partner to make sure that the payroll process is 100 percent reliable and accurate.
For a new practice that employees only a few people, it may make sense to do payroll in-house. However, as the practice expands and the partners have more on their plates, ensuring timely and error-free payroll could take their attention away from other crucial tasks. This is where every partner is faced with the option of doing payroll in-house or outsourcing to a company specialising in UK payroll outsourcing. While each model has its advantages and disadvantages, outsourcing payroll seems to be a preference for both large and small practices. Here are eight more reasons that make payroll one of the most outsourced services:
1. Lesser compliance issues
Payroll regulations are confusing and complicated. It often gets difficult to stay on top of all the tax rules and changes when trying to run a practice, yet employers are legally responsible for incorrect payroll reporting, which can result in huge penalties from the HMRC. Outsourcing payroll can help you reduce, or even eliminate, compliance issues. Companies that specialise in UK payroll outsourcing stay up-to-date on all regulations and rules, and therefore are less likely to make an error. In addition, your outsourcing partner will also handle tax filings, payments, and even take ownership of the cost of mistakes.
2. Reduced costs
In addition to reducing or eliminating costly payroll penalties, outsourcing your processes to a compliant and trusted company can save you money in other ways. Payroll outsourcing costs way less than managing the entire process in-house. Particularly for small- to medium-sized accounting practices, the price to pay for hiring and training the in-house resources generally add up to more than the cost of outsourcing.
3. Reduced turnaround time
Not having an in-house payroll team will not only save you money but also a lot of time. When your employees have to work on running payroll every other week, they are spending less time doing things that would have added value to their jobs. Because payroll process takes an immense amount of time and attention to detail in order to prevent errors, outsourcing to a professional company that knows the ins and outs of UK payroll outsourcing can increase efficiency.4. No clashing holidays or off days
By processing payroll in-house, you may be putting your employee data at a higher security risk. Even though you may trust your staff, there is always a chance that personal information about an employee could be seen in the office or accidentally gets shared. This may lead to identity thefts, messing with personal records, or manipulating payments in extreme cases. An outsourcing company that is compliant in UK payroll outsourcing will use secure servers to store and communicate sensitive information and will ensuretheconfidentiality of employee data.
6. Reliable data backup
When you use software to run payroll internally, and if the software goes down, all of your payroll and employee data may be lost. When you delegate payroll to a reputed outsourcing company, they will have reliable backup systems in place and several server locations to store your data in a manner that meets the security requirement, without additional cost to you.7. Access to the latest software and experienced professionals
Hiring a payroll outsourcing company will give you access to the most recent payroll software and trained professionals who have a deep understanding of software as well as specified payroll-related tasks. In addition, outsourcing will provide a refreshing insight into how your processes can be improved. Most accounting firms do not prefer to buy costly payroll software or spend money on training employees. Payroll outsourcing is an excellent way to gain access to professionals at a fraction of the price as compared to hiring in-house staff.8. No panic to meet payroll deadline
One of the most significant benefits of trusting a company experienced in UK payroll outsourcing is the peace of mind that comes with it. When you do not have to stress about whether your payroll is getting done on time and without errors, you can focus on growing your practice. Since outsourcing companies usually take ownership for mistakes, you can rest assured mistakes will be taken care of quickly and professionally.
While every accounting practice is different, the benefits of outsourcing payroll often outweigh the disadvantages. And ultimately, it is all about the bottom line.
If any of these factors are leading to inefficiencies or limiting profitability in your company, it might be time to consider payroll outsourcing. By outsourcing your payroll to QX Accounting Services, one of the leading UK payroll outsourcing companies, you can reduce the overall cost in the long term, free up valuable resources, and reduce turnaround times. Payroll outsourcing will allow your employees to focus on revenue-generating activities that will help your practice thrive.