benefits of outsourcing

Contents

Introduction 2

Payrolloutsourcing:Thefacts 4

Whyoutsource? 5

Bureauormanagedpayroll? 8

Debunkingthemyths 10

Howtooutsourceyourpayroll 13

Benefitsofpayrolloutsourcing|PAGE 1Whitepaper

Benefitsofpayrolloutsourcing|PAGE 1

Introduction

Hasanyoneinyourcompanyeverbeenpaidtoomuch,toolittle,orevennotatall?

Whenyourpayrollsystemisrunninglikeawell-oiledmachine,itgoesunnoticed.Butwhensomethinggoeswrong,itsuddenlybecomesahugeproblem.

AndmistakesDOhappen.Eventhemostexperienced,meticulouspayrollprofessionalscanmakemistakes–they’reonlyhumanafterall!

Withmountainsofpaperwork,thepressureofprovidinganessentialserviceandthethreatofharshfinesforincorrectsubmissions,in-housepayrollcanbearealpainforyourHRdepartment.

Should you keep your payroll in-house?

Doyouthinkin-housepayrollischeaperthananoutsourcedservice?Areyouprotectiveofemployeepaydetailsandwanttomanagelastminuteamendmentsyourself?

Well,inreality,outsourcedpayrollisnotonlyextremelycosteffective,butyou’llalsogetcountlessadditionalbenefitswhichwillsaveyouahugeamountoftimeandmoney,aswellastakingsomeofthepressureoffyourin-housestaff.



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As one of your most critical processes, it’s essential that your payroll always runs as smoothly, effectively and legally compliant as possible. Ask yourself:

z AreyouconcernedaboutyourcompliancewithRealTimeInformation(RTI)?

z Doesyourbusinessexperienceregularpayrollerrors?

z IsyourHRdepartmentstrugglingtocopeunderthestrainofpayroll?

z Areyoulookingtocutcostswithinyourpayrolldepartment?

z HaveyoubeenfinedbyHMRCforincorrectsubmissions?

z Areyouspendingtoolongonpayrollprocessingeveryweek/month?

z Doyouhaveproblemswithyourin-housepayrollsoftware?

Ifyouansweredyestoanyofthesequestions,readontofindouthowyourbusinesscanbenefitfromoutsourcedpayrollservicesandhowtoimplementit.



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Payroll outsourcing:The facts

z 95%ofUKbusinessesoutsourceatleastoneoftheirbusinessprocesses

z 61%ofbusinessesareopentotheideaofoutsourcingpayroll,giventherightpriceandservicelevels

z 63%ofbusinessesalreadyoutsourcetheirpayrolloperations

z Themainreasonforoutsourcingisthatasignificantpartofthecostofmanagingpayrollcanbespreadacrossmultiplecompanies

z 42.4%ofbusinessesbelievethemostimportantbenefitofoutsourcingpayrollisincreasedcosteffectiveness

z HMRCsaysthatover2millionbusinessesdonotkeepsufficientrecords

z Businesseswhichdonotmeettherequiredbook-keepingstandardscouldbefinedupto£3000

z HMRChasincreaseditsincomefromcomplianceinvestigationsby39%



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*Statistics sourced from a 2010 Accountancy Age Survey on Payroll Outsourcing and from HMRC.



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Didyouknowthatoutsourcingyourpayrollisoneofthebestwaystoimprovetheefficiencyofyourbusiness?Therearedozensofwaysthatpayrolloutsourcingcandramaticallybenefityouandyouremployees.Herearejustafew…

Cost effective

Considerthecostsofemployeesalariesandbenefits,NationalInsurancecontributions,thepriceofyourpayrollsoftwareandthemaintenancefees.

Ontopofthat,youhavetimecostsfortrainingandprocessing-nottomentionthepriceofpaper,inkandstationery!You’llfindoutsourcingeverythingforamonthlyoryearlyfeeismuchcheaper.Ifyou’rehiringinternally,yourpayrollcouldcostyou£15,000forsomeone’ssalary.Outsourcingcancostaslittleas£800.

Efficient

Payrollprocessingisnotonlytime-consumingbutitalsostopsemployeesfromtendingtoimportanttasks.Byoutsourcingthisprocess,youremployeescanfocusonaddingvalueelsewhere,leavingyourprovidertousethevasttechnicalresourcesattheirdisposaltoefficientlyprocessyourpayroll.

Compliant

UndernewlegislationcalledRealTimeInformation(RTI),you’llgetfinedifyoufailsubmitinformationtoHMRCeachtimeanemployeeispaid.Thiscanbefinanciallydamagingtobusinesseswhostruggletokeepontopofdataorworkwithanunreliablesystem.Withoutsourcedpayroll,it’salltakencareofbyyourprovider,whowillfullyprepareyouforanyupcomingchanges.

Why outsource?

Secure

Areyoureluctanttoswitchtoanoutsourcedpayrollservicebecauseofsecurityconcerns?Noneedtoworry!Yoursensitiveinformationisheldinasecure,backed-upandpasswordprotectedenvironment,oftenwithtechnologywhichhelpsyouidentifypayrollfraud.

Accountable

Whenitcomestoaccuracy,yourpayrollproviderisfarlesslikelytomakeamistake.But,inthisunlikelyevent,theproviderholdscompleteaccountability.Ifthere’sadelay,orpaperworkishandledincorrectly,it’suptoyourprovidertocleanupthemess.

Iftheycan’torwon’t,youcansimplytakelegalactionandquicklychangeprovider.Ifanemployeemakesthesameerror,you’llfinditdifficulttofirethem,thenreplaceandtrainanewrecruitinthetimeitwouldtaketomoveonfromapayrollprovider.



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Bureau or managed?

Everyorganisationhasitsownspecificpayrollneeds.Andthat’sexactlywhypayrollprovidersoffersomanyflexiblechoicestoensureyougetexactlywhatyouneed,fortherightprice.

Youcanchoosefromeithera‘Bureau’or‘Managed’payrollservice,whichofferdifferentlevelsofservicedependenton…

z Howmuchinvolvementyouwant

z Howmanyemployeesyouhave

z Howmuchin-houseexpertiseyouhave

z Howmuchexpertiseyouwanttokeepin-house

z Howmuchvisibilityyouwanttomaintain

z Howmuchyouwanttospend

‘Bureau’requiresajointeffortfromthepayrollproviderandthebusinessitself.‘Managed’offersafullservice,takingtheburdenofpayrollcompletelyoffyourhands.

Bureau

All the benefits of an in-house payroll system, without the hassle

WithacosteffectiveBureauService,youcantakecontrolofyourpayrollandemployeeinformation.Simplysendthedatatoyourpayrollprovider,they’llprocessthepayrollandprovideemployeepayslipsandreportssoyoucanmakepaymentstoemployees,HMRC,pensioncompaniesandallotherrelevantthirdparties.



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You’llbeprovidedwithafully-developedsystem,savingyoutimeandmoney,andgiveyouthepeaceofmindthatyourpayrollisbeingwelllookedafter.Youcanevenbenefitfromaself-servicecloud-basedsystemwhereyouremployeescanviewtheirownpayslipsonline.

Ifyoupreferalevelofcontroloveryourpayrollfunctions,Bureauwillbeperfectforyou.Whileyourin-houseteamtakescareofdata-entryandreporting,theprocessingandpayslipproductionishandledexternally.

Ensureyouhaveaclearideaoftheamountofthesupportyou’llreceivefromyourprovidersoyouknowtheexactskillsandlevelofinvolvementyou’llneedin-house.

Managed

Remove the headache of running your own payroll, so you can get on with running your business

Ifyoudon’twanttoworryaboutyourpayrolleveragain,youcangetthefullpackagewithManagedPayroll.Yourpayrollwillbecompletelylookedafterforyou,includingdatacapture,processing,printing,distributionandreporting…everything!Allyouhavetodoiscollectpayrolldataandpassthisontoyourprovider.

Yourpayrollproviderwillensureyouremployeesarepaidaccuratelyandon-time-whetherthat’sweekly,fortnightlyormonthly.They’lleventakecareofBACSpaymentsforyou-straightintobankaccountsorascheques-andgenerateofyear-endstatementsandforms.

WiththeintroductionofRTI,compliancewithHMRClegislationhasneverbeenmoreimportant.But,withexpertpayrollprofessionalsmanagingyourpayrollforyou,RTIworriesareathingofthepast.Afullymanagedsolutionistypicallymoreexpensivethanapartialservice,thoughmanyfindthatthiscostisoffsetbysavingsinsoftwareandpersonnel.



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Debunking the myths

Somebusinessownersarereluctanttooutsourcetheirpayroll–but,inreality,mostofthereasonspeopledon’twantoutsourcearejustmyths.We’reheretoshowyouthatthesemythsaboutoutsourcingyourpayrollhavenobasisinfact…

I’ll have less control

Justbecauseit’shandledoff-sitedoesn’tmeanyou’llhaveanylesscontrolthanyouneed.

Youcanstillhandletheprocesses,suchaswhogetspaidandhowmuchtheyget,soyou’llstillmaintainsomecontrol.

It’s less flexible

Lastminuteorunscheduledchangestoemployee’spaycanbehandledjustasflexiblywithapayrollprovider.

However,thismayrequireusingagoodproviderwithastrongcustomerserviceteam.Bybuildingasolidrelationshipwithyouraccountmanager,therewillreallybenodifferencetohavingsomeonesatinyourofficeandanychangescanbemadewithease.

It’s impersonal

Manypayrollprovidersarenotimpersonalatall–ifyouselecttherightone.

AtMoorepay,forexample,weseenewclientrelationshipsasabsolutelycrucial.Acontactwillgettoknowanorganisationpersonallyandgainanunderstandingofanyparticularrequirementsitmayhave.

We’lldevelopaworkingknowledgeofyourpayrollanddoublecheckalldataforaccuracy.



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It’s unreliable

Anestablishedprovidershouldprovidereliable,accuratedataprocessingmonthonmonth,yearonyear.Processingthousandsofpayslipsamonthforlocalandnationalcompaniesisproofofareliableservice.

Forexample,atMoorepay,weensureapayslipaccuracyofover99.65%-Canyourownin-housepayrolldepartmentboastthesamestatistics?

It’s less secure

Thereisacommonmisconceptionthatpayrolldatastoredoutsidetheorganisationwillbevulnerabletoaccessorevengetlost.But,inreality,yourdatawillbemoresecure,sinceanoutsourcedpayrollproviderinvestsheavilyintechnologysoit’smuchmorerobust.

Moorepay,forexample,usessecurecloud-basedsoftwarewithafullbackupandrecoveryofthesystemswithin8hoursofanydisasters.

Incontrast,themajorityofsmallerbusinesseswillhavelittleornobackupordisasterrecoveryiftheirpayrollsystembreaksdown.Somebusinessesarealsoworriedaboutthesensitivityoffinancialinformation.But,sincetheintroductionoftheDataProtectionAct,outsourcedpayrolldatais,infact,protectedandkept‘safe’bylaw.

It’s more expensive

ItiscertainlyNOTmoreexpensivetohireoutyourpayrollprocessing.Whenyouconsiderthecostofanemployee’swagesandaddinbenefits–payrollcostsquicklyaddup.Ifyouaretheownerofaverysmallcompanyandyouaretryingtodopayrollyourself,thecostofyourtimeisevengreater.

I’m happy with how things are

Youmightwellbehappywithyourpayrollset-up,butwhathappensifthepayrollsoftwaresystembreaksdownorsomeoneisill?Bynothavingtothinkaboutthemonthlygrindofpayroll,youandyourteamcanfocusonotheraspectsofyourbusinesswhicharemoreimportantandmoreproductive.

YoucanavoiddealingwithHMRCandforgetaboutchangesinpayrolllegislation-becauseit’sallhandledbyyourprovider–andit’salsofantasticifyouarethinkingaboutstreamliningyourbusiness.



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Changing methods is a hassle

Eventhougheveryorganisationhasitsownspecificprocessesandprocedures,agoodoutsourcedpayrollproviderwillabsorbanypainofchangeover.

AtMoorepay,weworkcloselywithclientsateverystagetomaketheprocessaseasyaspossible.Ourimplementationconsultantsareresponsibleformakingitallhappen.

Youmightexpectimplementationtobeatime-consumingprocess,butitcantakeanythingfromafewhoursto10days.

We still need payroll expertise in-house

Someorganisationsthinkthathavingapayrollexpertonsiteisrequiredtomanagebothdataandtherelationshipwiththepayrollprovider–butthisisn’ttrue.

Allthatyou’llneedisapointofcontactwithagoodunderstandingofyourbusiness.Theydon’tneedtoknowanythingaboutpayroll,justwheretogetthenecessarydatafrom.

So,withthemythsofoutsourcedpayrollexposedandthedustsettled–whynotstopmaking‘excuses’andfindoutwhattodo,whichweaddressinournextsection.



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How to outsource

Ifyou’recomingaroundtotheideathatoutsourcingyourpayrollmaybethebestoptionforyourbusiness,wehaveputtogetherthesesimplestepstohelpyou.

1 Assess your current payroll

Thefirststepistoassessthecurrentprocesses,practices,employeesandexistingcostsinyourorganisationinordertogiveyouaclearpictureofyourstrengthsandweaknesses.

Asaresult,youroveralldecisionmakingwillbewell-informedandprecise.

2 Define your requirements

Oncompletingyourinitialassessment,thenextstepistohaveaclearideawhat,andhowmuch,ofyourprocessesistobeoutsourced.Doyouwantamanagedorbureausolution?

3 Analyse the provider market

Onceyouknowwhatyouwant,it’stimetodoyourresearch.Notallpayrollprovidersofferthesameservice,soit’simportanttoknowtheprocesses,activitiesorevencountriesyouareoutsourcingto.

4 Prepare the proposal

Youneedtodocumentyourexpectationstoensureyourpayrollprovideractsinanefficientandeffectiveway.Facetofacediscussionscanalsohelpinreducingandsaveexcesspaperwork,timeandeffortonbothsides.



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5 Select a great payroll provider

Whenselectingyouroutsourcedpayrollprovideryoushoulddoabackgroundcheckonthembeforemakinganydecisions.AtMoorepay,forexample,weprideourselveson:

z Avarietyofintegratedsolutionstosupportyourpayroll,HRandcomplianceneeds-nomatterhowdiversetheymaybe.

z Beingprompttorespondtoyourneeds,beitfromtheinitialsalesenquiry,throughtoimplementation,deliveryandon-goingsupport.

z Constantlyevolvingandupdatingoursystemsandprocessestoprovideyouwiththelatesttechnologyavailableinthemarketplace.

z Accuracy,deliveryandqualityoftheservicesandsolutionsweprovide.

z Adedicatedteamofsolutionexpertssoyoucanrestassuredyourbusinessandemployeesareinsafehands.

Beforeyoumakeadecisiononyourprovider,it’sessentialtoensureyourpayrollproviderfulfilsthesecriteria.

6 Prepare a watertight service level agreement

Whenyouarepreparingyourcontract,or‘servicelevelagreement’,youshouldoutline…

z Responsibilitiesofyourproviderandstaffmembers

z Aclearprocessforresolvingpotentialdisagreements

z Clearlydefinedresponsibilityandaccountabilityinthecaseofpayrollerrors

z Adefinedprocessforidentifyingerrors

z Clearlydefineddeadlines

z Schedulednegotiations



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7 Implement your strategy in the most efficient way

Inordertosuccessfullyimplementyournewoutsourcedpayroll,youneedtoensureyouunderstandyourcompany’snewresponsibilitiesandthatyourteamisefficientlyresourcedandskilledtodealwiththem.

Dependingonthetypeofoutsourcingserviceyouhaveselected,you’lleitherhavetoeitherinputthedataintoyournewsystemorsendittoyourprovider.Theremayalsobesomeextratrainingoremployeecommunicationrequired.

Afterthat,it’sasimplecaseofensuringyouandyourprovidersticktothedeadlinesyouputinplace.Then,sitbackandrelax–butknowthat,shouldanyproblemsarise,yourproviderisavailabletohelpyou.

Areyoureadytoimproveyourbusinesswithanoutsourcedpayrollsolution?Wecanhelp!Findoutmoreathttp://www.moorepay.co.ukorcall08451844615.

Understand how your payroll is currently being processed and why this method was chosen

Sit back and relax! But know that should any problem arise, your provider is available to help rectify the issue

Either input data into your system or send data to your provider (depending on your solution)

Implement and test the new system

Understanding how your provider’s performance will be measured and which deliverables should be met

Define the requirements to your provider, i.e. the specific requirements of your payroll

Choose a provider. Check:

They have a good track record with companies like yours

They utilise the relevant technology

They can keep you compliant

They are able to provide support and training where necessary

Define your goals for outsourcing. Is it to cut cost? Improve processes?

Choose between a bureau or managed solution and understand the level of information you will be required to pass to your chosen provider

benefits of outsourcing

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