The two things that make the biggest impact in any business are time and money. The more time you have, the greater the number of new business opportunities you can create and the healthier the bottom line of your agency will become.
Yet the amount of time small business owners spend on managing their payroll is quite staggering.
According to a report published by SCORE, 28% of small business owners spend the equivalent of 1-2 working days every month managing their payroll. On the face of it, that may not sound like a lot of time.
However, when the end of the month comes along and you still have your targets to meet, can you really afford to sacrifice 1-2 days of selling time in order to process your agency’s payroll?
Paying your team (and yourself) on time and correctly every month is crucial, and while outsourcing this area of your business may seem daunting at first, the benefits more than outweigh any fears that you may have:
1. Increased revenues:
We have already touched upon the amount of time that is used up each month by some small business owners, but by outsourcing your payroll you gain that time back. This enables you to concentrate more of your efforts on those activities that could be making a positive impact on your bottom line.
2. Reduced risk and peace of mind:
The ever-increasing number of changes to HMRC’s rules and regulations mean that you need to keep up to date with the latest developments to avoid any costly mistakes or ‘glitches’, particularly for complex payrolls.
It can be a minefield, so it shouldn’t surprise you to learn that over half (51%) of small businesses in the UK outsource this function, according to Bond International Software.
Payroll providers such as Together make it their job to stay abreast of these changes and ensure that you are fully compliant with all legal obligations and other requirements associated with paying your people. In doing so, they protect you and your business and save you considerable time trying to get to grips with the legislation you really need to know.
3.Savings on hiring:
Would you rather build a team made up primarily of fee-earning consultants, or have some of that headcount made up of a team of administrators? Hiring in-house expertise can be costly, especially if the person responsible for payroll is not trained or they simply have the payroll function bolted onto their overall list of responsibilities.
Outsourcing your payroll frees up their time to concentrate on other important tasks and you may even be able to reduce the size of your back office team too. It is not uncommon to see recruitment firms without any in-house expertise at all – they prefer to outsource and take advantage of the cost and time savings to be gained.
Experienced payroll staff are hard to come by. It is a specialist role but if you have just one or two people performing this task, do you have a contingency in place for when they are not there?
That’s where outsourcing really comes to the fore. By using an external payroll provider, you can be assured that your payroll service will continue to run uninterrupted throughout the year.
5. Costs are kept to a minimum:
As well as salary savings, small business can also reduce the costs associated with having an in-house payroll function. Indeed, when you factor the payroll software costs, the costs incurred for printing and distributing pay slips, training staff, drafting in external support to cover holiday and sickness periods, the amount you could save compared to what you would pay to use an outsourced payroll provider can be significant.
There are many more reasons why it makes good business sense to outsource your payroll.
Hopefully the five points above will demonstrate to you how much of a difference it can make to your agency and its bottom line.