by Frontier Software.
In the past year business operations have been under the microscope and in the months (possibly years) ahead budgets will be facing scrutiny. An organisation’s biggest and sometimes most expensive asset is the staff. Employment is expensive: salaries, taxes, NI, pensions, salary sacrifice and perks all add up and, to protect this cost, you must ensure that payroll processing runs smoothly, is accurate and compliant. Payroll can be an emotive issue and has to be handled sensitively; mistakes directly impact your employees and that’s the last thing any of us need right now.
The challenge of producing the payroll can often fall on the shoulders of a single employee, which alone can create risk. Taking into account the existing pressures on payroll, such as always being ready for the next complex change in legislation, the additional challenges that may lie ahead for your business post pandemic could be huge. Do you want this to be on a single point of failure? Payroll is not just about the numbers it’s about navigating the constantly shifting legislative sands and this is more apparent than ever as payroll has been thrust center stage this year.
Of course, there are sound business reasons for keeping payroll as an in-house function. All sensitive data is held within the organisation; the payroll team are on hand to answer immediate queries; there can be seamless integration with HR; it is part of the core management strategy; control is kept within the organisation. But, running a payroll department comes at a cost. Experienced payroll staff demand good salaries; new staff require training and there are associated equipment costs. Input from the IT department may also be required to keep software maintained and up-to-date and to handle any technical issues.
Could now be the perfect storm for considering outsourced payroll services? Outsourcing specialists maintain compliance with complex and extensive legislation and deliver timely updates. They use functionally rich, Revenue tested software and employ experienced and professionally qualified staff. Many companies are turning to payroll providers not to manage the administration, but to remove the potential risk of running a non-compliant payroll. The penalties can quickly add up and this is a cost no business needs, especially now.
The choice for running payroll is a decision unique to each organisation. However, change is constant and what was once the right choice for you may need to be reviewed in payroll’s Brave New World.
Article originally published on London Loves Business January 2021.