Ask any small business owner what one of the most daunting parts of growing their company past being a sole trader, and many of them will tell you that it is dealing with payroll, taxation, and HMRC. Buying software and then learning how to use it, dealing with employees, paying the correct tax, national insurance, student loan contributions, or pensions, are all tasks that involve a step into the unknown for someone who is wanting to expand their business.
Most small businesses start out as a single or two person company- who are the business ‘owners’, but when they begin to employ other people, the rules all change. This can often create a great sense of worry for business owners, not just because of the lack of understanding but also the potential cost of software and personnel that is required.
Outsourced Payroll for Small Businesses
A perfect solution for these issues is to outsource the ‘payroll department’ and there are many companies available who can provide a payroll service for them. These companies offer a variety of services depending on the individual requirements of the client. Some clients, for example may be comfortable with certain aspects of the payroll system, and wish to keep them in house, whereas others may want the payroll company to do everything.
A major issue for small businesses is the fact that they may have to hire or train a specific payroll administrator which can be costly in the first place, and they will have to be continually trained on new policies which are put in place nationally. Outsourcing payroll means that this needn`t be an issue as they will always be up to date with new laws and policies.
Time and money can be saved by using specific payroll software, but this is usually expensive to buy and upkeep, and without a basic knowledge of payroll requirements this can be difficult to understand. Using a payroll service bureau would cut out the need for this completely.
Other services offered by payroll companies include the printing of pay slips or paying wages directly into a bank account, calculating and processing taxes, dealing with employee queries, processing new starters and leavers and dealing with sick pay, maternity pay, or paternity pay. They can also act as an agent with HMRC; registering and liaising with them on behalf of the company.
Errors in payroll and taxation can prove to be extremely costly to businesses and whether the issue is between the company and an employee or the company and HMRC, they are best avoided. This is another reason for the burden to be put onto a payroll company who will drastically reduce the potential for error.
Outsourced Payroll for Medium and Large Companies
The benefits of outsourcing the payroll in medium and large businesses is primarily the same as it is for smaller businesses, although it also provides a smooth system for the payment of high numbers of employees. Most larger companies may have the funds available to establish their own in-house payroll department but this doesn’t mean that they want to deal with the hassle of ensuring everything is in order. Whatever the size of your company; an outsourced payroll provider will offer many benefits and take a large weight off your mind; leaving you to focus on more important aspects of your business.
About the Author: Chris Mayhew is grateful that he has never experienced any problems with his pay but knows that payroll can be a complex mistress. He would recommend Trace Payroll to any business owner looking for a trusted outsourcing partner.
Photo credit: Kheel Center
