UHY Ross Brooke Chartered Accountants

Top 5 reasons for outsourcing payroll

business owners

There are a multitude of reasons why payroll can go wrong, and these can have costly consequences for the company and employees alike.

Consequences of getting payroll tasks wrong

At best, receiving incorrect or late pay for the employee is a temporary irritation; at worst it can lead to serious consequences for them including inability to pay credit card bills or missing mortgage payments. Staff dissatisfaction results in higher staff turnover with all its associated costs for the company.

The company can face the prospect of large penalties for non-compliance or late payments to HMRC, or even an investigation by HMRC which is time consuming and difficult for all concerned.

It could even face huge fines for data breaches if employee information ends up in the wrong hands, and cause major employee upset if salaries are made public within the company.

As you can see, managing your own payroll may not be a good idea.

Reasons to outsource your payroll

For many companies, taking the decision to outsource their payroll is a major relief. The key benefits of outsourcing revolve around staff happiness, compliance and time and cost savings, so let’s look at these in more detail:

  1. Third-party payroll companies have the resources and expertise to handle payroll tasks quickly and accurately. Since your staff are possibly the most important asset your company has, by ensuring that they are consistently paid on-time and the correct amount, you remove one major obstacle to their happiness with the company.
  2. By outsourcing your payroll, you will stay up-to-date and ensure that your company is compliant with the relevant laws and regulations. Your risk of getting the figures wrong is lower, as is the resulting potential for HMRC fines or an investigation.
  3. Outsourcing payroll can be useful for a company that is growing or experiencing changes in its payroll needs, since it can react quickly and easily adapt to changing circumstances.
  4. Payroll companies typically have advanced security measures in place to protect sensitive employee and financial data, reducing the risk of data breaches or loss.
  5. By removing the need for internal staff to spend their time on payroll activities, your company can free up time to focus on its core business activities. As many who have been in touch with the tax office will appreciate, interacting with HMRC can be very time consuming, confusing and frustrating, especially for the non-specialist.

To find out more about outsourcing your payroll to a reliable and trustworthy company, please get in touch and you look forward to a better night’s sleep!

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