Taking care of the payroll process may seem like a very easy and straightforward task from the outside. It might seem that you just have to deal with providing your employees with paychecks on time, and everyone will be happy. This might appear to you quite an easy thing to do, right? But in reality, there is much more in this to deal with. But the best part is if you feel stressed trying to manage all the moving parts of this entire process then you’re not alone in this.
Partly payroll is a compliance issue and partly an accounting element. This makes payroll a complicated process, making it the most commonly outsourced service.
Payroll is subject to many changing statutory and regulatory requirements. The complicated laws and the introduction of GDPR have made it hard for accountancy practices to stay on top of payroll compliance. Dependency on legacy processes and in-house teams can leave your accountancy practice exposed to risk in this ever-changing regulatory landscape, and there will also be a threat of being penalized for non-compliance.
So it is important to ensure that the payroll process is 100 percent reliable and accurate.
It may make sense to do payroll in-house for a new practice that employs only a few people. But with the expansion of the practice and the partners, ensuring timely and error-free payroll could take their attention away from other crucial tasks. This is where the option of payroll outsourcing to a company comes in handy. These days outsourcing of payroll is a preference for both large and small practices. So in order to reduce your stress here, we bring to you some guidelines, to help you craft a more manageable payroll processing experience. Keep reading further to know more:
- There will be plenty of paperwork to deal with in payroll. So from the start, you should be well prepared to handle it. Ensure that your employees have the proper paperwork filled out from the start.
It is equally very important to maintain all the collected records of each of your employees. It would be best to keep them somewhere you can easily find them. You can either store digital versions of the documents or store them in filing cabinets. Mostly it is required to keep all personnel records for at least a year depending on the rules of your country.
- Maintaining a Calendar:
Another important step to follow after documenting and retaining is to keep a tax calendar for due dates.
To make sure that you do not forget when all your taxes are due, it is best to maintain a calendar with all critical dates pertinent to your client's business.
- Follow the Laws
Laws keep changing quickly even though payroll may seem like a steady phenomenon to you. So it is very important for you to follow them because you can be penalized for not withholding taxes correctly for your employees.
Another important thing to do after all the above steps is to keep reviewing your internal process.
It is essential to stay aware of all the federal, state, and local laws and practices. But that's not enough it is equally very vital to also be familiar with your internal policies that affect payroll like sick pay, paid time off, and commissions.
In this aspect, every business will be different. There will be certain companies who may consider paying for their employees’ health insurance, but then there will be some others who will withhold it from each employee’s paycheck depending on their personal plan. The thing that works the most is to provide, based on years of service or career level of your employees within the company, different levels of paid time off accruals to them. There might be some complicated rules in your commission or bonus plan that might affect who is compensated and at what level and, who is eligible for what? All these must be documented and monitored as they affect payroll deeply.
All this so far might be sounding a lot to take in at the moment, but much of your payroll stress can be reduced by staying vigilant and taking help from your department managers to tell them the changes to you. They will also need to give reminders to employees of policies, and other payroll-related actions they might require to take care of from time to time. You can even reach out to XL KPO- the top payroll outsourcing company in India to take care of all your payroll activities and get your work done quite systematically and professionally so that you can get rid of all your stress. This way you can focus on other important activities which are more important for you to grow.
But why worry so much when you are in this digital age? Automate some of the more tedious administrative payroll tasks with online payroll and payroll software. This provides payroll professionals with a lot more time to focus on more strategic projects. All these payroll services can save your time by:
- Giving direct deposit and electronic pay stubs.
- Maintaining track of tax changes, to make you withhold the correct amount.
- Taking care of new hire reporting and onboarding. This makes adding new workers quite a seamless process. New employees documents remain on file in a digital format.
- Gives access to online and mobile time clocks. This way you will stay far away from fussing so much with old-fashioned timesheets. Also, you will no longer have to reach out to managers to make them remember to review and submit hours.
- Your employees will get software that will allow them to make changes in their own way and by themselves. Also, there will be updates made automatically from time to time.
Why outsource payroll?
The advantages outsourcing payroll offers can outweigh the objections but, for the sake of balance, here we have shared the potential demerits:
- It will make things worse in case you choose the wrong firm
- You might end up spending more than you need to in case your workforce is small with a simple working structure.
- It doesn’t mean that outsourcing the work will lead to outsourcing ultimate responsibility for compliance.
Outsourcing payroll for most accountancy practices reduces stress and leaves more time to reinvest in growth.
If you choose an experienced, expert firm, like XL KPO then you will be completely freed from the burden of having to keep up with the latest legislation and best practice.
To oversee auto-enrolment, by putting minimal effort total compliance with HMRC and The Pension Regulator is ensured.
Payroll Outsourcing Costs
Costs for outsourcing payroll vary depending on the number of people you employ and how often do you run payroll.
However, in general, the expense to run your payroll by paying your employee usually far exceeds the amount you have to pay an experienced team that can handle it on your behalf.
Let’s say you want to run payroll weekly and your business has five employees on its books, you could expect to pay around £5,000 a year.
If you compare this to keeping a payroll administrator to run it in-house at around £20,000 a year then you will be saving 75% by outsourcing it to an accountant.
So, is this the right time?
There comes a tipping point for most firms in the UK when handling payroll in-house is no longer feasible. This point varies from business to business.
It has become very tiring for accountancy firms to keep up to date with constantly evolving regulations, and the introduction of real-time information (RTI) legislation to the PAYE system. All this leads businesses to be fined for failing to submit information to the Revenue each time a worker is paid.
Indeed, more businesses have chosen to outsource either certain aspects of their payroll or their entire payroll since the RTI took effect in 2013 amid fears of becoming non-compliant.
GDPR legislation, which was introduced in May 2018, has made keeping your employees’ data confidential and secure very important.
Research has shown a high percentage of accountancy practices in the UK in 2018, had adopted cloud-based solutions.
Therefore the majority of accountants in the UK secure personal information, such as that of your employees, in an encrypted online environment.
No matter however you look at it, outsourcing your payroll can save you a tonne of money, give you more time, and provide peace of mind. All this will ensure that you will never miss a deadline with HMRC.
By coming so far you might have realized by now that the worst part of it all is that processing payroll involves your employees’ personal cash flow. The seriousness of it alone can create so much anxiety. The need to stay on top of a complex function like payroll with all that work to be done can add to the stress. But taking charge of your schedule, taking care of the management and security of the documents, and most importantly keeping track of the withholding rates and tax laws along with your personal business practices can make all this a little less intimidating. You can even lean on XL KPO for payroll outsourcing to India for handling all your payroll dealing parts in a systematic manner within time. You will be able to get the best practices done with the best of results. You can even reach out to XL KPO one of the most reliable accounting outsourcing firms in India for any sort of help today. In case, you are having any trouble dealing with your payroll process you can contact XL KPO at firstname.lastname@example.org top payroll outsourcing companies in India. But don't worry even the steps shared above will guide you to make stress-free payroll processing experiences all throughout the year. All the best:)