outsourcing
An outsourced payroll function – friend or foe?
Have you ever considered outsourcing your company’s payroll to a specialist bureau? We hear from Nick Clarke, managing director of Online Payrolls, about the prospect
How did you become involved with payroll?
I invested in Online Payrolls two years ago, with the intention of providing support from afar. However, I was hugely impressed by both the team and the potential for the business that I subsequently committed additional time, joining as managing director 12 months ago. My background is in accountancy, restructuring and private equity and I believe this mix of experience helps support our payroll specialists in adding value to our clients, as well as growing the offering.
What do you see as the benefits of outsourcing payroll?
We believe there are three key benefits: releasing resource, legislative compliance and cost savings.
Releasing resource: pressure on existing resources, either as a result of organisational growth or due to cost cutting, can impede a business’ ability to manage its payroll. Outsourcing payroll allows existing accountancy and management resource to be allocated to workstreams that will add greater value to your business.
It also avoids the inconvenience (and costs) of covering payroll staff on leave – either planned or otherwise and there is no time spent dealing with HMRC or other government agencies.
Legislative compliance: The increasing legislation surrounding payroll, combined with the greater reporting requirements such as RTI, have added to the administrative burden and the prospect of fines for non-compliance. Outsourcing payroll avoids the need to track and implement changes in payroll legislation and statutory requirements.
Cost savings: There is the potential for significant cost benefits when you outsource payroll including no capital expenditure required for payroll software, hardware, associated IT support or payroll stationery. No need for ongoing training to maintain compliance with the latest legislative requirements and furthermore, the costs are known upfront – making forecasting much simpler.
What impact has auto- enrolment had on your business?
It has been very positive. In many respects auto-enrolment has been the catalyst for businesses to reconsider their payroll options. In doing so, many decide that the pension challenges are best dealt with by experts and this results in outsourcing their payroll and auto-enrolment requirements.
What advice would you give someone considering outsourcing their payroll?
Don’t rush. It’s absolutely imperative to
choose the provider that best suits the needs of your business and this can take time to establish. I would specifically consider the following:
• One size doesn’t fit all: too often providers will seek to squeeze you into their rigid service framework – this includes fixed input schedules, timelines and reports. A provider should be seeking to work alongside your business to add value – this could be bespoke input schedules, management reports or company branded payslips.
• Hidden pricing: too many providers strategically pitch very low monthly costs upfront, but then charge for a multitude of add-ons throughout the year (which should already be included in the service) and it ends up being uncompetitive when added together.
• Client referrals: take the time to speak to existing clients of the payroll bureau, and not just the names they give you.
• Mitigate risk: all providers should be offering to be on-board in parallel to your existing operations to rule out any teething problems. We conduct our parallel runs as a complimentary service.
About the Company
Online Payrolls was originally founded in 2003 to meet the needs of an independent recruitment firm. However, identifying that the market lacked a transparent and solutions based approach, Online Payrolls began offering managed payroll services to external parties and grew quickly into a standalone payroll bureau providing payroll, pension and BACS services to both companies and accountancy firms.
Today, Online Payrolls provides services to hundreds of clients from a diverse range of sectors and from across the UK. The business continues to grow, doubling in size in the past 12 months, as more and more businesses recognise the advantages of outsourcing their payroll function to a dedicated and professional provider.
For more information visit the website or call to speak to one of the team:
onlinepayrolls.co.uk 01202 853333
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businessmag.co.uk
THE BUSINESS MAGAZINE – SOLENT & SOUTH COAST – DECEMBER 16/JANUARY 17
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