Any business with employees will need to get a firm handle on their payroll processes if they want to keep their staff and HMRC happy, but for those with little experience of payroll services, dealing with taxes and the other responsibilities that come with running a business, it can be a costly, stressful and time-consuming overwhelming task.
Even if, as a small business owner, you’re always looking for ways to cut your costs and save money, sometimes you really do have to invest a little to save money in the long run, and dealing with payroll, is one such instance.
It might actually be easier to think of it in terms of how much money you could lose by not getting payroll right, rather than thinking of how much outsourcing payroll will cost you. Below are some questions to ask yourself when thinking about taking advantage of third-party payroll services for your small business:
Will it cost you more to hire someone to handle payroll in-house?
There’s no question that unless you’ve got prior experience and knowledge of running payroll, you shouldn’t attempt to handle it yourself. There are simply too many mistakes you can make, and most will be at the expense of your employees. If in knowing this, you decide to hire an in-house payroll individual or team, you’ll need to think carefully about the costs associated with doing so, which can include buying software, paying salaries, training and cover for sick leave, among others.
These costs can soon mount up, and most small business owners find that outsourcing their payroll is the most cost-effective option, simply because most, if not all of the costs mentioned previously, can be avoided.
Are you ready to devote extra time and effort to payroll?
If you do decide to handle the payroll services yourself, have you thought about how much of your time and effort this will take up? What may get left by the wayside when you have to devote a certain amount of your time to payroll each month? If you have a lot of employees, are you prepared to spend a considerable chunk of your time getting their pay right every month? Payslips, tax codes, auto-enrolment and under or over payments to HMRC can all mount up.
Are you skilled and knowledgeable enough?
With payroll rules and regulations changing like the wind, if you don’t put considerable effort into staying on top of them all – at all times – you could easily get left behind, or worse, end up unwittingly breaking the law, and landing yourself in hot water with HMRC. The only way to get the relevant skill and knowledge, is to invest time in learning the ins and outs of payroll, and again, this can take up a lot of time.
If you assign your payroll services to an existing member of staff, and train them up and then they leave, you have to go through the process all over again. Hiring an in-house payroll representative will likely cost you far more than hiring a third party would, and you get instant access to their skill and breadth of knowledge.
For many small business owners left asking themselves the same questions as those above, they come up with the same answers: it will cost more to hire someone in-house, I don’t have the time to devote to payroll, and I am definitely not skilled or knowledgeable enough. In these instances, outsourcing to a third party payroll provider, is the only solution.
|If you’re not sure about which of your payroll areas need help or would like to speak to someone about outsourcing your payroll services, then please get in touch with our team today.