If you’re asked to list your most critical priorities as a small business owner, payroll may not immediately jump to mind. That’s because payroll tends to be regarded as an “admin” function.
However, calculating and issuing payouts in compliance with legal requirements can be more challenging than you think. You need a solid knowledge of PAYE, an understanding of the latest HMRC updates, and software to run payroll accurately and on time.
Instead of trying to figure it out yourself, why not let the professionals take over? Payroll outsourcing for small businesses has become increasingly popular, and for good reason. You save time and money, benefit from expert insights, and have happy employees who give the business their 100%. Let’s take a closer look at what small business payroll outsourcing looks like.
Benefits of outsourcing payroll services
1. Ensures compliance
Tax regulations are changing constantly, and keeping track of those changes can be tiresome for small businesses with other things on their plate. At the same time, if you fail to comply with those regulations, you run the risk of hefty penalties.
Outsourcing payroll services to a professional payroll service provider offers an easy solution to this. It’s their job to stay updated on tax law changes and what they mean for your returns. So when they issue payouts to your employees, they do so inclusive of all withholdings and allowances.
2. Reduced risk of payroll errors
If you make a mistake with your payroll, you run the risk of unhappy employees. A recent survey indicated that 49% of employees would consider quitting after just two payroll errors, so you’ll want to prioritise this.
You’re also likely to make mistakes when filing your business tax returns, which could attract unwanted attention from HMRC. The problem exacerbates when you rely on manual calculations or primitive tools, which prolong the process and increase the chance of errors going unnoticed.
Payroll providers, however, always use the latest systems and automation. This makes payroll a breeze and provides you and your employees with complete records of each payout, including year-end tax statements. Everyone gets paid on time, and your books of accounts stay flawless.
3. Access to expertise and resources
Most small businesses don’t have the budget, know-how, or bandwidth to run their payroll. Small business payroll outsourcing gives you affordable access to the decades of experience the outsourcing team brings to small business accounting.
You get access to the latest payroll software and dedicated payroll professionals who can guide you on optimising your payouts. This is invaluable support, especially regarding tax season or budget planning — professionals can give you money-saving insights you might otherwise have missed.
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4. Save time and money
Payroll isn’t just about the software — you also need at least one dedicated staff member to take charge of executing the payouts every cycle. Hiring and training such staff members can be expensive for a small business, not to mention time-consuming.
Instead, you can just outsource the process to external experts. Payroll outsourcing experts will assign the right team members to your payroll and take care of all necessary training — you only need to pay the agreed-upon fee every month.
This also reduces the administrative burden on your staff members, letting them focus on core business activities. In addition, you avoid the costs associated with mistakes in your payroll, including HMRC fines.
5. Scalability
As your business grows, your payroll needs will grow, too. Managing payroll for an expanded team with complex payout structures can be difficult, especially if you’re using a basic in-house payroll solution or maintaining an internal staff.
With payroll outsourcing, on the other hand, you get access to a system that evolves with you. Payroll providers use advanced software designed to work flawlessly even with large enterprises, and the team members are trained to advise you on how to modify your payroll structure as you grow. Need to downsize? The payroll provider can help you with that, too. And at every step, you pay only for the services you actually use.
6. Improve data security
As a small business owner, you know the importance of safeguarding your internal data. When you use primitive software or lack suitable admin policies, you risk exposing sensitive financial information to malicious parties.
Payroll outsourcing for small businesses protects you from such risks. Payroll providers have their own advanced security protocols to keep your data safe at all times. Plus, they take regular backups so that you always have your data intact.
7. Accuracy and precision
As we’ve mentioned already, accurate payroll processing is key to ensuring your team members stay happy. It’s also vital to ensure that your employees are signed up for pension schemes and that any bonuses or deductions are processed accurately.
The easiest way to do this? Invest in payroll services and auto-enrolment outsourcing. Your provider will collect employee information, track timesheets, calculate the payout for each employee, accommodate any deductions or extras, set employees up for automatic payments, issue payslips, and give you complete reports of each payroll cycle. You can rest assured that everyone is getting paid on time — and you’ll have the records in case HMRC comes knocking.
Conclusion
When you run your own venture, it’s tempting to want to handle everything yourself. As your business grows, however, it will demand more from you, and it helps to know that there’s an expert on hand to take over some of the functions. One of the best investments you can make this year is opting for payroll outsourcing for small businesses.
And at Bradleys, we’re ideally poised to help you make that transition. Our experts use the latest software and strategies to help you run payroll without a hitch and completely comply with HMRC regulations. Check out our website to know more — and when you’re ready to take things further, we’re just a call away.