From tenacious start-ups to established multi-national organisations, payroll processing is an essential part of any business.

After all, a company’s payroll function needs to ensure every single employee gets the correct amount in their wages, every time. Do the job well, and it’s likely a workforce will never know the hard work that goes on behind the scenes to ensure their salaries are paid promptly and correctly. However, as many seasoned HR professionals will tell you, payroll can be incredibly tricky (not to mention time consuming) to manage effectively.

Not only is there a heck of a lot of careful data entry involved, managing an organisation’s payroll also includes a huge number of complex processes and calculations. These all require highly skilled individuals, dedicated software, time and accuracy – not to mention a great degree of security. Make a mistake in any of these areas, and the consequences can be hugely damaging to both a business and its workforce.

5 resources payroll

It might come as no surprise to learn then, that many companies are now outsourcing their payroll to specialist managed payroll providers.

5 reasons why you should be outsourcing your payroll

Although the idea of outsourcing such a sensitive function of your business may seem daunting, it is becoming increasingly popular. Recent data from Statista found that 38% of organisations worldwide either partially or fully outsource their payroll functions – and this number is shown to be rising. Here in the UK, there’s research that shows a much larger proportion of businesses (61%) outsource their payroll operations.

That shift in how businesses manage their payroll function can be attributed to the changing role of HR. Payroll was (and still is) often considered a key part of HR’s responsibilities: but, with HR now considered a key strategic business partner, outsourcing to a managed payroll solution can free HR from time-consuming and labour-intensive administration – and lead to a great number of additional fantastic business benefits, including:

You’ll save your organisation money

Now, this may seem counter-intuitive (after all, you’re paying for someone to do something for you!) but look at it this way: by outsourcing your payroll processing, your organisation will save on the cost of having to hire a specialist person or team of people, and all the overhead costs that go with it.

It’s also worth remembering that it’s not just monetary savings you’ll enjoy. There’s also the time your business and hardworking HR team will save, too. Released from the burden of payroll-related administrative activities, they’ll be free to concentrate on more strategic objectives such as improving company culture, increasing employee attraction and retention, and enhancing company productivity.

You’ll enjoy a higher degree of payroll data security

Many reputable payroll providers will have the technology, experience, safeguards and industry accreditations to maintain the security of your payroll data. In particular, a reliable managed payroll provider will have ISO27001 certification.

ISO27001 certification demands that a business has robust infrastructure and processes in place to ensure data is stored and processed in an appropriate manner. Plus, companies that offer ISO27001-certified products or services are regularly audited by an accredited body to ensure they remain compliant.

If your managed payroll provider has ISO27001 certification, it’s an excellent sign the company takes your precious payroll security seriously.

You’ll stay compliant with your tax, HMRC and PAYE responsibilities

With payroll, the devil is in the detail. Outsourcing your processing to a professional managed payroll provider will take care of all the PAYE complexities, HMRC legal obligations and processes required in effective payroll management.

For example, with Cezanne HR’s smart managed payroll solution, statutory payments and deductions – including maternity, Paternity, Adoption, Sick and Shared Parental Leave – are all calculated automatically. In addition, the service also includes vital automatic updates via HMRC’s Data Provisioning Service (DPS).

If you’re a rapidly expanding business, outsourcing payroll makes even more sense. That’s because you’ll benefit from having more time to focus on growing your company, rather than keeping up to date with the intricacies of payroll compliance.

You’ll enjoy a service that can be tailored to your organisation’s unique requirements

Many good payroll service providers can provide packages to suit the specific needs of a business, and these will often also be flexible, too. That means that you’ll normally only ever pay for the services you really need.

With managed payroll providers, you’ll be able to amend your package to reflect the demands of your organisation. For instance, you may require multi-company or multi-schedule payroll processing, or perhaps a variety of monthly, four-weekly, fortnightly or weekly payment runs. This is all especially good for businesses who may be diversifying their operations, opening multiple working locations, or perhaps struggling to keep pace from an HR perspective.

You’ll get a reliable and accurate service

Lastly, outsourcing your payroll to a professional and experienced managed payroll provider will shield your organisation from potentially costly or embarrassing mistakes. As mentioned earlier, the devil is in the detail when it comes to payroll, and no-one likes to receive an inaccurate or plain-wrong payslip at the end of the month!

Managed payroll providers will not only have proven and established processes in place that prevent payment errors, but also the knowledge and expertise to ensure that if mistakes do happen, they are taken care of immediately and effectively.

Paul Bauer author image

Paul Bauer

Paul Bauer is the Head of Content at Cezanne HR. Based in the Utopia of Milton Keynes (his words, not ours!) he’s worked within the employee benefits, engagement and HR sectors for over four years. He's also earned multiple industry awards for his work - including a coveted Roses Creative Award.