How to Outsource Payroll

Outsourcing payroll may be a good solution if you are a small to medium sized business looking to cut costs.

Payroll on its own is a relatively dull job and does not necessarily make up a full time job, so it does not always make financial sense to hire someone to complete this job in-house unless you want to combine this task with other HR duties.

Outsourcing payroll therefore can mean you get your payroll completed effectively and on time, so all your employees are happy.

There are some points to consider before choosing a particular payroll company however, so take a look at the following if this is something you are considering.

• Think about the size of your company and if the payroll company you are considering is used to handling companies similar to your own.  They may only work with start-ups and may not have the resources to cope with a slightly larger business, or if they can, they may have difficulty when you start to grow.

• It is important you think about the future of your company, if you are planning on growing then remember to ask the payroll company if they would be able to take this on when it happens.  They may, for instance, charge extra when they start dealing with larger numbers, or may find it difficult to keep up with your changing circumstances.

• Work out the costs.  Each company has a different way of charging for the different parts of payroll required.  For example, you may find one company offers a better rate but you have to print off the pay cheques yourself, so you would need to work out whether the time it would take for you to do this, and the cost of the paper and ink would be worth taking the cheaper rate.

• Other services.  You may find you require an accountant, or perhaps you already have one, and are looking to combine the services.  First of all, contact your accountant and see if his company does payroll too and if you would be able to work out a deal.  If this is not possible then you may want to consider moving to a company who would do both so you all your company details will be on one system.

• Typically you will find if your company has fewer than 20 employees’ outsourcing to a payroll company it is the more cost effective method rather than hiring someone to do it in-house.  However, there are some companies who can cater for businesses with thousands of staff and can provide a good deal if HR is something you are not considering.

This article was written by a leading provider of Payroll & HR Software in the UK.