3 payroll outsourcing myths you need to ignore if you’re an SME Jan 23, 2020Views: 129
Companies nowadays have two options when it comes to paying their employees. They can either process their payroll in-house or they can outsource it. Both do exactly what they say on the tin. One means doing your own payroll and the other means letting someone else do it. No brainer, right? Actually, if you dig a bit deeper then no.
Doing my rounds on the local glitzy and glam payroll circuit I get chatting to all sorts. And a prevailing theme is the complaints from SMEs who have outsourced their payroll only to find themselves lumped with hidden fees; not to mention the lack of flexibility and control once they outsource it.
Well SMEs, never fear - I’m here to tell you that you no longer have to suffer in silence. I’m here to tell you about how in-house payroll solutions can provide complete control without the hidden fees. So let’s look at some common misconceptions that might keep you at bay.
1) If we outsource, it will be more cost- effective
While the true cost behind outsourcing is often difficult to predict, it is undeniable that over time a company may be faced with various hidden fees. These could be anything from the introduction of a new tax or simply a surcharge for certain reports.
But actually, by bringing your payroll in-house, companies will often see a return on their initial investment in as little as a year. It’s often thought that companies will need to hire additional payroll staff and IT staff to look after it, but in reality, the same staff who give the outsourced payroll information can easily manage the duties for an in-house system. Companies generally have basic IT staff anyway, and besides, with an in-house solution, support is provided by the vendor and the software is automated.
2) If we bring payroll in-house, we will need to be up to speed with all payroll changes - essentially become tax experts
Again, a very common belief. But as I mentioned literally 5 seconds ago, any self-respecting in-house payroll system will be fully automated. It will have a whole team behind every upcoming change in payroll legislation; the software itself performs all the necessary calculations.
Instead of complicating things and making you take night classes to become a payroll expert, the payroll software should simplify all processes for you.
3) If we outsource, then we don’t need to do any more payroll work - someone else will do all the work
SMEs are given the wrong impression that they won’t need to worry about payroll functions if they outsource. But in reality, you will still have to send the correct payroll data to the outsourced provider (such as hours worked, holiday pay and tax reliefs). The only difference is you’re giving the information to someone else to process and print off on a payslip.
Seems a bit counterproductive doesn’t it? If you’re an SME then this should be no sweat off your back and means that you can work to your own deadlines and not that of your payroll providers.
So there you have it. Don’t get me wrong, outsourcing payroll can be hugely beneficial for large companies but if you’re an SME then it makes sense to keep it in-house as long as you have the right software in place.
Luckily, BrightPay is here to help. Their fully automated and GDPR compliant software is perfect to manage your payroll from the comfort of your own couch or wherever your office may be.
Check out the benefits yourself at www.brightpay.co.uk or book a 20 minute online demo today.
Written by Aoibheann Byrne - BrightPay Payroll Software
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