Outsource vs In House

Is Outsourcing the way to get your payroll in order

When it comes to deciding between Outsource vs. Inhouse payroll, there are a variety of things to consider

Off-the-shelf payroll software packages are available, at first glance they may seem to meet your needs. However, upon closer inspection you may find this one-size-fits-all approach isnít the solution it seemed and therefore has no value at all.

The in-house system has been in use for many years and is usually written and supported by specialist IT staff within the company. The statutory updates occur on an annual basis. These types of systems often use older technology and the cost of upgrading is great.

A fully outsourced system is an option for companies who would prefer to concentrate on their core activities and developing their business.

Such a system replaces the need to have payroll specialists in-house, which has become more of a requirement in recent years due to the increasing complexity of payroll legislation. Costs are also more manageable, as the company would know years in advance how much it will cost to provide and support the payroll function. Companies who choose this usually pay a monthly fee with no hidden extras.

A payroll provider will also deliver their best practices and streamline an organistion's payroll function. In truth, outsourcing payroll can be the catalyst to identify and improve upon current processes. With an in-house payroll departrment there is often a tendancy to maintain a 'status-quo' situation.

What are the key considerations?

Time: Does your business have the time and expertise to take their focus away from their business so that they can deal with payroll weekly or monthly? Payroll is a task that has natural peaks and troughs throughout the month - will filling this role internally be cost effective for your business?

Reliability: It goes without saying that your staff will require payment on time, every time. The payroll must be accurate and must be processed when it is due regardless of holiday, sickness or any other unforeseen circumstances.

Confidentiality: Payroll is probably the most sensitive subject within a business - an indiscretion can cause huge upset - can the organisation be sure that sensitive information is kept confidential?

Flexibility: Changes may need to be made to payroll at any time - will the in house resource always be available to make last minute changes?

Cost: Last but by no means least, cost is a major consideration for businesses when considering outsourcing. While it may be advantageous to have in-house staff available ‘on tap’ as it were, there are costs involved in staffing this role, eg holiday/absence cover, ongoing training (payroll is an area that is guaranteed to have annual changes - and that’s before whoever is sitting in No 11 decides to be imaginative (remember the computer incentive scheme!)), not forgetting the cost of the payroll software, support and annual updates.

For a small organisation all the above objectives could be met by a manual system. The system used by an organisation depends greatly on the number of staff and whether an in-house IT division/department is available.

Your next step...

Have you seen a benefit that you know will work in your business? Then contact our team today and find out how Payroll Village makes payroll simple for your business.