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Payroll Services
A company’s payroll consists of all the paid employees, and those receiving a company pension. It also refers to all the paperwork associated with paying them, including wage slips, bonuses and perks.
HMRC forms, tax and National Insurance data must all be current and accurate. The size, sector and location of a company will determine how complex its payroll is.
‘Payroll’ can also mean a company’s wage bill. Accurate information and timely payments are vital for a company to understand its own performance, but also for employee management and evaluation. Both the taxman and the employees will be highly sensitive to errors or delays.
A rock solid reputation in the payroll department is essential for a thriving business. Nowadays some of this work can be automated via dedicated software, but most businesses outsource their payroll to a third party specialising in the management and delivery of all the necessary data and paperwork. The number of companies in the payroll services sector demonstrate that outsourcing this administration is highly cost-effective.
If you want to find out more about payroll services, simply continue reading this information on this page; otherwise, if you want to compare quotes straight away, you just need to complete the form at the top of the page.
Comparing quotes with Approved Index is free, quick and easy, and it can save you as much as 40% on payroll services.
Outsourced Payroll Services
Outsourced Payroll Services
Most businesses want to get on with running and growing their business, not negotiating complex and changing tax codes and making sure they’re not falling foul of payroll legislation.
Sensitive salary information has the potential to cause strife in the workplace. This is why payslips come in security-sealed envelopes. Outsourcing payroll administration helps confidential salary information to stay confidential.
Outsourcing payroll also means that a company no longer needs to invest the manpower, training and tools that are required to keep payroll administration 100% reliable, and compliant with regulations. In terms of the man-hours it saves money on employee pay and payroll software licences, for smaller and new businesses and can be reassuring to pass this technical task to expert hands. Some of the key functions of an outsourced payroll service include:
- lower costs
- improve efficiency
- free up key staff for other tasks
- provide peace of mind – your payroll will always be compliant with legislation and regulations
- remove the need to purchase extra software and hardware
Useful payroll data is essential for assessing costs, strategy, and evaluating human resources. Information on payroll may also be requested by investors. Data capture can be difficult for the uninitiated. A payroll service will know how best to manage and interpret these figures so that they become a useful resource.
Keeping payroll in-house may make sense for companies at both ends of the spectrum, such as with only one or two employees, or perhaps a family business, and for a very large company with lots of in-house knowledge.
In-House Payroll
For a small business owner managing payroll in-house means:
- getting to grips with tax and national insurance calculations for each employee
- being aware of and keeping up to date with changes to employment law
- correctly filing returns to HM Revenue and Customs at the right times of year
- processing payments to employees, HMRC and pension schemes
- providing employees with payslips
Quite an undertaking for someone who also has to oversee and manage the day to day running of the business.
For larger businesses in-house payroll management means having one or more staff dedicated to the function, usually as part of the finance department or HR department. Keeping it in-house means:
- you retain management and responsibility for the correct administration of the payroll
- you retain access to data and reporting
- conflicts can arise (usually neither finance nor HR see payroll as naturally falling within their remit)
- employing extra staff due to the extra work involved
- purchasing expensive payroll software and updating it annually
Payroll Through an Accountant
Small businesses may choose to process their payroll through an accountant. This alleviates the need to perform complex calculations and stay on top of changes to tax and employment law. But accountants are overqualified for this kind of work. They tend to charge high hourly rates and so this way of managing payroll is rarely cost-effective.
Types Of Payroll Services
Types Of Payroll Services
No two businesses are the same, so each will have different payroll needs. There is a wide range of products to choose from so it’s possible to find a payroll services provider that works for every kind of company.
Different levels of payroll service can be broken down into the categories below:
| Payroll Service | Feature |
|---|---|
| Fully Managed | This is total outsourcing of your payroll. The payroll company will not only calculate and process all payments but ensure compliance, taking on the following responsibilities. |
| Part Managed | A part-managed payroll service sees responsibilities split between an internal HR team and an external agency - the exact split of responsibility will depend on each companies' preferences and expertise. |
| Bureau Service | Payroll functions are outsourced as the business sees fit, allowing larger companies to manage their requirements without committing to a potentially incomplete service for a long period of time. |
| Hosted Service | This where you retain staff who oversee the payroll operations but the payroll service company provides. This options allows your company to use expert staff without having to hire or train them. |
| Pay-as-you-go Service | Fully managed payroll is available on a rolling basis as well as on a fixed term contract. This can be useful where you require short term cover for specific payroll positions within the company. |
| Global Service | Global payroll services allow your company to operate legally, even when they have companies overseas in a number of countries and economic environments. This is an excellent choice for large, multi-national enterprises. |
| BPO Service | A BPO payroll provider, as well as ensuring compliance on a worldwide scale, will be used to dealing with large organisations and can easily incorporate mergers and acquisitions. |
Fully Managed Payroll Services
The only thing a fully managed payroll service needs is raw data. As the name suggests, the company will take care of every other aspect. This makes it an excellent choice for new businesses and those with no in-house knowledge.
A payroll service will keep up with current legislation, including changes to HMRC interim reporting requirements. They will make sure that new/departing employee calculations are correct and submit all the necessary year-end tax data to HMRC on your behalf, if you wish.
A fully-managed payroll services company can provide the unexpected bonus of data capture via reports, broken down by department, manager, or employee group, as well as cost-analysis. Their experience also means that they can suggest other useful reporting parameters.
Fully managed payroll services often cover the following functions:
- Processing starters and leavers
- Calculating pay for salaried and variable wage employees including performance related bonuses
- Processing BACS payments to employee bank accounts
- Processing payments to HMRC, pension schemes and unions
- Providing payroll software for reporting
- Providing security sealed payslips or e-payslips
- Providing end of year filing
- Handling enquiries from staff and tax authorities
Part Managed Payroll Services
When using part-managed payroll services the work is split between the provider and the user.
Essentially, how this split is divided will depend on the two businesses concerned, but broadly speaking, the business has access to the payroll software, and probably undertake the data entry and analysis.
A company with its own accounting and/or HR departments will already have some payroll knowledge in-house, but the provider will be able to offer expert support where necessary. It is important to analyse the cost of paid employees versus the cost of a fully-managed service.
Bureau Payroll Services
Bureau payroll services are essentially modular. Both parties use the payroll software, but some in-house expertise is required. Payroll functions can then be outsourced as the business sees fit. This is useful for larger companies in a changeable economic climate.
Hosted Payroll Services
This where you retain staff who oversee the payroll operations but the payroll service company provides:
- Compliant software for calculating payments and reporting
- End of year filing
- Security sealed payslips or e-payslips
- Processing of BACS payments
- Telephone and online support for your payroll staff
With hosted payroll you’ll normally still be responsible for reporting to and answering queries from HMRC. Your staff will need to input changes to tax codes and perform all the calculations using the software provided. In essence, you’ll be handling all the data, the payroll company will facilitate the calculations and payments.
Key benefit: Keep a payroll department and have access to data and reports in-house.
Pay-as-you-go Payroll Services
Fully managed payroll is available on a rolling basis as well as on a fixed term contract. This can be useful during organisational changes to your company or when your payroll manager requires maternity cover.
Key benefit: Freedom to change with almost no notice.
Global Payroll Services
If you have staff based overseas you’ll need a payroll company which can cope with international and trans-national legislation and regulation.
Tax calculations need to take into account laws in both countries, employment law in the host country needs to be adhered to and payments must be made in accordance with local regulations. Larger payroll services companies can just cover your overseas staff or incorporate these workers as part of a fully managed or hosted solution.
Key benefit: Ensured compliance with laws and regulations between countries.BPO Payroll Services
Large multi-national companies with operations in many different countries may opt for BPO outsourcing when it comes to payroll management. This standardises payroll throughout the organisation rather than having separate operations for different countries. A BPO payroll provider, as well as ensuring compliance on a worldwide scale, will be used to dealing with large organisations and can easily incorporate mergers and acquisitions into the standard payroll process.
Key benefit: Keep global payroll operations under one roof.
What to Expect from a Service
It is in the interest of every payroll provider to keep the transfer as seamless as possible. With a full service, a manager will look at accounting processes, ensure software compatibility, deal with industry-specific input requirements, and test the system for you. Part-managed services will either have detailed guidelines or do the transfer themselves.
A payroll provider should be adaptable when processing overtime, staff changes, maternity, pensions, holiday, and sickness pay.
A payroll service company is there for your business, so they should be accommodating – if fully managed, taking data in whatever way is necessary, including spreadsheets, fax, cloud options and over the phone. There should also be a choice with respect to payslip delivery (online or printing) and despatch.
The company must also be dependable – ensuring accurate and timely supplier, employee and HMRC payments via required formats.
Security is vital for banking details, as well as a data protection for staff addresses amongst other information. Measures to protect data are also important for trade secrets and should include everything from passwords and identity verification as well to tamper-proof pay-slips.
Excellent support is also essential, no matter what level of service the company is providing. Qualified professionals are the main bonus of a payroll services company, and dedicated personnel should be allocated to each account.
Growth
Payroll service companies are keen to keep your business as your company grows, particularly when they are growing with you. When it comes to international payroll services, your current provider may either have the necessary expertise, or recommend another service that specialises in the international market and can offer support in several languages. Another option is to employ different companies in different locations.
Comparing payroll services with Approved Index is free, quick and easy, and it can save your business as much as 40%.
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External Payroll Provider Benefits
External Payroll Provider Benefits
- Pro-active payroll providers will work for you and with you
- Payroll providers will have in-depth experience of all the important facets in providing payroll services, alleviating the pressure from your business
- You will have complete confidence that payroll processes will be completed on time, all the time
- There are large time and cost savings to be gained from employing an external payroll service provider
- Complete security and confidentiality is guaranteed in all aspects of the payroll process
If you want to cross payroll off your "to do" list for good, Approved Index can find you expert payroll services companies to suit your requirements. Just fill in our simple enquiry form to receive free no obligation quotes from 4 leading payroll service providers.
Choosing a Payroll Services Provider
Choosing a Payroll Services Provider
There are so many payroll services providers to choose from, and so many different levels of service that you can almost pick and choose exactly which elements of your payroll operation you want to outsource and which you want to keep in-house. You may like having a person in your company with responsibility for payroll, someone who is visible and available to handle staff enquiries and provide you with information on-demand but want to make their lives easier with software and support. In this case you’ll likely plump for a hosted solution. If cost cutting is your key objective, a managed payroll service provides maximum efficiency.
In any case, you’ll want to watch out for the following:
- Transparent and open pricing: Make sure all costs are provided up front and that there aren’t hidden charges for reporting, end of year filing, starters and leavers, providing P60s, changing tax codes etc. Also, for hosted solutions, check that there aren’t extra charges for software updates.
- Contract length: Make sure you’re not tying yourself into a contract that’s too long or that there is a suitable termination clause. Some industries are prone to rapid, unforeseen changes and you don’t want to be stuck with an unsuitable service or have to pay through the nose to get out of it.
Outsourcing some or all of your payroll functions to an outside company can save you time, money and a lot of headaches. Choosing the right provider is a matter of deciding exactly how much responsibility you want them to take on and then comparing quotes for that level of service. Play your cards right and you’ll never have to worry about P11d forms again.
Comparing Payroll Service Provider
The information on this page has been designed to provide businesses with a range of options for their payroll requirements; the options included range from small-scale service provision to large-scale, full outsourcing - deciding which option will suit you best will depend on a number of factors.
To get the best quotes today, you should speak to as many payroll specialists as possible - Approved Index can help with this process. To start comparing providers today, you just need to fill in the quick and easy form at the top of this page.
Comparing payroll services with Approved Index is free, quick and easy, and it can save your business as much as 40%.
Further Reading
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Essential Payroll Services Articles
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