Whether you’re considering outsourcing your company’s payroll for the first time or looking to switch outsourced payroll providers, it’s important to do your research.
Running an SME is tough – the burden of day-to-day administrative tasks and compliance weighs heavy, and it can be difficult to focus on growing your business.
A recent YouGov study reported a quarter of businesses believe managing payroll requires too much of their time and affects their overall business performance.
If you’re looking to grow your business, outsourcing your payroll is a great step towards unburdening yourself from the administrative headache of keeping up with legislative changes and the expectation that you have all the answers to your employees’ payroll and pension queries.
Outsourced payroll providers can also save you money and minimise the risk to your business if you choose the right provider.
In this post, we’ll discuss six important things to consider when outsourcing your payroll:
1. Choose a specialist outsourced payroll provider
There are so many payroll providers to choose from – from specialist outsourced payroll providers and payroll companies to HR companies and accountants.
The accountancy firm that you use for your accounts may be great at accounts, but are they specialists in payroll? If you’re using your accountant for payroll administration or are considering doing so, ask them about their expertise in payroll. Chances are, they might not actually enjoy payroll processing and may prefer to focus on your accounts, which is where their specialism lies. Some accountancy firms will actually outsource your payroll to a third-party specialist payroll provider, so this is also something to consider.
2. Check the outsourced payroll provider is fully compliant with HMRC and The Pensions Regulator
Payroll compliance can be a headache if you’re not a specialist in this area. To comply with Government regulations, you must make accurate payments and deductions, provide employees with detailed payslips, file and pay all taxes on time, pay deductions such as pension payments to the right places and keep hold of records for a minimum of three years.
Pension compliance can also be difficult to keep on top of. Under the Pensions Act 2008, you must put staff into a workplace pension scheme and contribute towards it. Auto-enrolment is an important thing to get right, as is re-enrolment. Check with the outsourced payroll provider whether they will handle all the administration of this for you.
How do you know how your chosen pension fund is performing; when was the last time you reviewed the performance of your auto-enrolment fund?
3. Ensure transparency
Outsourcing your payroll is not a decision to take lightly – after all, you’re talking about the hard-earned wages of your employees. A seamless transition is best for both you and your employees, so look for a specialist provider who can handle the transition expertly and efficiently.
Ask to see the full process from end-to-end, ask to see their security credentials and how they keep your data safe and check how they’re set up to handle any significant changes to payroll, such as the job retention scheme. These are all things which YOU will be liable for if THEY get wrong, so it’s best to check these from the outset.
4. How much input will be required from your finance team?
Unburdening your finance team is a great reason to outsource your payroll. Finance managers are a fantastic asset, and freeing up their time is a win for small businesses. Payroll and pension administration is process heavy and takes a lot of time and accuracy – take the headache away from them, and they will be available to help you grow your business.
Using specialist outsourced payroll providers may also reduce the number of staff you need to recruit to your finance team to administer payroll and pension payments, therefore helping to reduce your fixed costs. A fully outsourced specialist payroll provider will also take care of the administration of new starters and leavers.
The main thing to make sure of here is that you outsource to a specialist who requires minimal interventions from your finance team – otherwise, you could end up giving your finance team an even bigger headache.
5. What do you get for your money?
You will find most payroll providers charge a set amount per employee to administer payroll, but check what added value you get.
- Do they provide any other services for your employees?
- Do they provide online 24/7 access to pay documents via an app?
- Do they provide UK-based customer service support to answer your employees’ payroll issues?
- Are they GDPR compliant?
These are important questions to ask to help you choose the best value payroll provider for you.
6. Will they give you peace of mind?
Check if compliance with HMRC and The Pensions Regulator still sits with you. If it does, you may be reducing your fixed costs and saving some money, but you may not feel you have complete peace of mind.
If the compliance still sits with you, this means the payroll providers will administer a company’s payroll and pensions, but ultimately the company directors are still responsible for the payroll providers’ actions and any compliance issues.
Our Payroll and Pension services
We’re proud to offer a fully outsourced specialist payroll and pension service with the following benefits:
- A dedicated, expert payroll team here in the UK to administer your payroll and pension responsibilities and produce all your pay documents
- A guarantee that all your employees are paid accurately, on time, and in compliance with HMRC regulations
- Complete auto-enrolment processing with dedicated pension advice and support for employees, in compliance with The Pensions Regulator
- 24/7 online, secure access to pay documents and an online easy-to-track pension pot for employees via our SMART-e app
- UK-based customer service support by phone, email and live chat
- A range of employee benefits including employee discounts, a full Employee Assistance Programme with 24/7 confidential counselling and online GP, a fitness and wellbeing hub
- A range of management services including specialist HR legal advice, unlimited access to occupational health support and access to recruitment specialists at discounted rates
We deliver our payroll and pension solutions as part of the SMART Employment model, which costs SMEs as little as 30p per day. SMART Employers have more time to focus on business growth, experience increased profitability through reduced costs, increased performance, and have complete peace of mind for themselves and their employees.
If you’d like to know more about outsourced payroll through our SMART Employment model, contact us for a free, no-obligation demonstration of the process and our added value services.