Payroll Outsourcing

With the introduction of Real Time Information (RTI) and Auto-Enrolment there is no better time to consider payroll outsourcing.  Below are 10 factors to consider:

1. Cost

Big businesses can afford to maintain big payroll departments.  For small businesses, however, an in-house payroll service is a money burner.  If your business has fewer than 20 employees, there is a very good chance that you can save money by outsourcing your payroll operations.  Do the math.  Identify how many hours your employees are devoting to payroll-related activities.  With this figure and your employees’ hourly rate of pay, calculate how much you are spending and compare the amount to the plans offered by payroll services providers.  Also, be sure to factor in the money your business spends on tasks like printing and distributing reports, creating tax documents and the like.  You will probably be surprised by the result.

2. Productivity

Payroll management is a time-consuming activity.  With this burden removed, your employees can focus on more productive activities and you can consider reviewing staff levels.

3. Accuracy

Payroll mistakes can be painful, angering employees and, maybe more worryingly, the government.  A good payroll-services provider is far less likely to make a serious error than your in-house staff.  Furthermore, if a big mistake is made, your payroll-services provider would be professionally qualified to rectify it and also insured for any mistakes; something you can’t do with your own employees.

4. Reliability

In-house payroll activities are as reliable as the people doing the work.  With a payroll service, delivery and quality will not vary with staff workload and availability due to holidays, illness or other absence.  You also will not have to spend time training new recruits on your business’s payroll system.

5. Speed

Since payroll-services providers are specialists with technical resources at their disposal, they can process even the most complex payrolls quickly, completely and correctly.  Unlike most employers, they can also accommodate a temporary influx of seasonal workers without acquiring potentially costly new systems that would otherwise remain dormant the rest of the year.

6. Insight

A good payroll-services provider will be fully trained and up to date in all the details of payroll-related legislation.  Your employees could try to achieve the same level of understanding, but it would take a considerable investment in time and effort.

7. Accountability

If payslips are delayed or paperwork is mishandled, it will be the payroll-services provider’s responsibility to put things right.  If the provider cannot (or will not) remedy the situation to your satisfaction, you can sue.  You can also switch to another service provider relatively easily, even if you have to pay a notice period or cancellation fee to cancel an existing service contract.  Compare this with the alternative of firing, hiring and training an in-house payroll staff, which would probably take several weeks or even months.

8. Flexibility

Boring, repetitive payroll work can act like an anchor on your business.  Your staff, when released from rote payroll responsibilities, will be free to focus on other, more creative work.

9. Security

Do you have the time and energy to closely supervise your business’s payroll for time and rate abuses and other dishonest activities?  Most payroll services firms have technologies that can spot and alert clients to various types of payroll fraud, such as payment manipulation and “phantom workers.”

10. Worry

There is a lot to be said for the peace of mind that payroll outsourcing can bring to a business owner or manager.  No headaches, no hassles: You’re left to focus on running a profitable business.


The Pay Pod can manage your payroll and auto-enrolment allowing you to manage your business.

For further information and friendly advice, contact us today.

By | 2016-10-14T11:07:16+00:00 November 5th, 2014|Payroll|0 Comments

About the Author:

Tim Evans
Tim Evans is a Fellow Member of the Association of Accounting Technicians, a practising Accountant and Director of The Pay Pod Limited.