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Let`s face it, any small business owner dreads the thought of having to deal with payroll. Valuable time which could be spent on building business and delivering a better service is spent on trying to understand complicated software, intricate tax systems, meet tight deadlines, and not to mention dealing with pensions and sick pay. For small companies especially, an obvious option to ease the burden is to outsource the payroll.
The Pros Of Outsourcing –
A payroll service bureau is an accounting business whose main role is the preparation of payroll for other businesses. They are usually run by Certified Public Accountants, but they often call themselves a Payroll Service Bureau to distinguish between the services that they are offering. Most clients are small businesses who do not want the hassle of having to process payroll runs themselves, nor are they large enough to have their own payroll department.
Amongst other things, services usually include printing pay cheques on time or depositing salaries into personal bank accounts, the calculating and processing of taxes, creating payroll reports, dealing with P45s/P60s and employee queries, and the processing of sick pay, maternity, and paternity pay. There are often optional services offered, such as dealing with retirement and savings plans and time keeping.
The Costs Of Poorly Operated Payroll –
Tax laws are continually changing, as is payroll software, and dealing with HMRC is not always very easy, especially to the un-tax-trained business person. Using a Payroll Service Bureau can take this pain away. They can act as agents with HMRC and produce the payroll reports required by them. It is important that payroll is calculated accurately as errors can be very costly in terms of money but also in terms of employee job satisfaction! There are over 43,000 cases per year at employment tribunals related to payroll-more cases than dismissal grievances! These can be very expensive to companies and even the simplest of errors can be extremely expensive to rectify. The HMRC are also an establishment that companies do not want to upset. Mistakes in taxation and National Insurance can create no end of financial and other problems for companies!
A Personal Service –
For small to medium sized businesses, the only real positives about keeping the payroll system in-house is that no fees will have to be paid, and that companies would have more control about exactly when the money will be coming out of their bank accounts. Obviously, a good business to client relationship is imperative to ensure a smooth running and accurate outcome. Often payroll providers offer personal contacts to clients in order to create a stronger bond and more personal service. They often consider themselves as an extension to a small business to create a better feeling of everybody working together.
It does not appear to be a difficult decision whether to use an external payroll service. For companies which are small and maybe with limited admin and time resources it is the obvious solution, meaning that the other employees can get on with doing the work that they are actually employed to do.
Chris Mayhew knows that business owners have more important things to worry about without having to delve into the complex world of payroll. He would recommend Trace Payroll to anyone looking for a trusted payroll provider for their small business.
Featured images: Creative Commons image source
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