Factors to consider when choosing a payroll service provider

/ Posted By - Bradleys Accountants / Categories - Payroll

With an increasing number of small businesses springing up in the UK, competition has undoubtedly become fierce. The only way to stay ahead in the post-COVID ready-to-hustle environment is by streamlining your business processes.

Payroll management is one such task that requires a lot of time and effort. A thorough understanding of PAYE (Pay As You Earn), pension auto-enrolment, and specialised payroll software is necessary for any small business.

And let us not forget the ever-changing legislation that seems to make running payroll more difficult than it needs to be. But here is the good news: You do not need to handle administrative data and payroll management activities all by yourself.

You could outsource the function to an expert. But how do you find the best payroll service provider that suits your company’s needs and helps you combat payroll hassles? Glad you asked!

Here are the top nine parameters to consider before choosing the best payroll service provider for your small business:

1. Factor in your unique payroll needs

When choosing a payroll service provider, it is essential to first determine what your needs are from the provider.

One option is a payroll bureau option where the processing element of your payroll is provided. Here your team provides the raw data, normally via payroll software, and the payroll bureau will run the data and arrange the payslips of your employees. Here your business provides all other related services.

Another option is full outsourcing, in which the provider offers support for all payroll needs other than collecting the payroll data. They will help your business stay compliant with legislation, run reports, ensure your employees are paid on time, liaise with HMRC and respond to your employees queries, process the correct deductions and leave you to focus on running your business.

Therefore, please research potential payroll service providers to ensure that they offer the services your business needs, work with your budget, and determine how they will fit in with your own processes.

2. Evaluate their data security processes

The security of payroll data is of the utmost importance, as it is both valuable and sensitive. Select a payroll service provider with a robust infrastructure and strict data security policies to ensure that all employee information remains secure.

Additionally, look for a payroll service provider that has a system in place to back up your data in case of emergencies and can help you migrate legacy data during the onboarding process.

3. Use pricing for competitive advantage

When considering the cost of a payroll service, it’s essential to remember that prices can vary from provider to provider. However, a standard pricing structure generally includes a flat base fee, which is usually on a per employee basis.

When comparing pricing, consider all the features and services each provider offers to ensure you get the best value for your money.

4. Check out their reviews and references

When researching potential payroll service providers, read through testimonials and reviews to get a sense of the quality of their services.

You can find reviews on Google and third-party sites like TrustPilot and Clutch, on the provider’s website, and by looking at their social media presence.

If you are already in talks with a provider, it might be worth asking for customer references, as these can provide:

  • Level of experience
  • Valuable insights into their service portfolio
  • The quality of work they put out for their customers

With this groundwork, you can understand what it is like to work with the payroll service provider and whether they are a good fit for your small business.

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    5. Note the industry experience they have

    An experienced payroll service provider should have a team proficiently handling calculations, taxes, deductions, and other payroll-related tasks.

    One of the best ways to assess the expertise of a payroll service provider is to visit their office and meet with their team; this will give you a good sense of their capabilities and skill sets.

    6. Determine their level of expertise and skills

    Opting for a package that covers all your basic payroll needs such as employee record-keeping and regular payroll processes may be tempting. However, it is also important to consider scalability. Your payroll and compliance needs will also increase as your small business grows.

    You will likely require a custom payroll services package to meet those needs. If the payroll service provider has a restrictive skill set, you may have to switch providers in the future, which can be time-consuming and disruptive.

    Therefore, it may be best to choose a service provider with experience in handling larger companies with complex accounting requirements which can provide you with the support you need as your business grows and your payroll needs evolve.

    7. Confirm the type of support you will receive

    Find a payroll service provider that offers reliable and consistent customer support. If you encounter any issues, you should have access to a team member who can promptly guide you through the resolution process.

    At Bradleys Accountants, we prioritise our clients’ time and understand the importance of timely resolution. That is why we assign a named team member to be your point of contact throughout our partnership. This ensures that you have consistent support and can easily reach out for assistance.

    8. Prioritise compliance when making a decision

    Be sure your payroll service provider can meet corporate compliance requirements. They will be responsible for handling tax filings, calculating pensions, completing P11D forms, and making RTI submissions to HMRC among other tasks.

    If your payroll provider fails to run payroll in a compliant manner, you will face penalties. To avoid this risk, choose a reputable payroll services provider with a proven track record of success and satisfied clients.

    9. Ensure their software is compatible with yours

    Your chosen payroll service provider should be proficient in using the top payroll software in the market, such as Xero, QuickBooks, BrightPay, or FreeAgent, and ideally one that enables your company to add the payroll data directly. This minimises errors and enables you to have an overview of your payroll at any time.

    In a nutshell

    Before selecting the payroll service provider for small businesses, consider factors such as their experience, customer support, data security, compliance with regulations, and pricing.

    At Bradleys Accountants, we offer a range of payroll services for small businesses, including expert support, streamlined processes, and a dedicated team member for a personalised experience. Contact us to learn more about how we can make your payroll process more efficient.

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