Exploring the Costs Involved in Managing Payroll Internally

Lots of businesses are still unaware of the alternative options they have when it comes to payroll management. It is usually assumed that organising payroll internally, with one or a few people managing everything, is the most cost-effective approach for smaller and medium-sized companies. 

But, in-house payroll can have numerous disadvantages such as hidden costs and long-term issues, which can affect a company's efficiency and profitability. For this reason, in this post, we will explore the costs involved in managing an in-house solution and outline why you might be better off outsourcing your payroll with a company such as Clockwork Contracting. 

What Makes In-House Payroll Management Expensive?

When it comes to in-house payroll management, there can be a lot of hidden costs that aren’t always visible to businesses at a first glance. Organising your payroll is a complex, tricky skill and there is so much involved in it. It is not just about transferring wages to employees. Over a long period of time, in-house payroll management can lead to extra costs such as;

• Indirect costs for equipment, office space and resources
  
• Upgrades of technology and IT labour costs
  
• Time and labour costs - from admin-heavy manual processes of in-house payroll management
  
• Costs from troubleshooting, human error and legal issues
  
• Partial outsourcing costs - in-house payroll solutions sometimes need to outsource aspects such as tax filing and accounts
  

Compliance Issues

As is to be expected, there is a lot of legislation surrounding employee payroll. When your business chooses to manage payroll internally, this will mean that you have to deal with a lot of compliance issues. 

Doing this can be highly time-consuming and demanding on company resources. It costs lots of money to stay on top of constantly changing laws both domestically and internationally. With an outsourced payroll solution, you won’t face these expenses as there will be full compliance with tax law changes, employment and wage laws, and pension auto enrolment amongst other regulations. 

The Long-Term Nature of Payroll Management

Payroll management can become much more expensive over time, as it is a long-term investment for any business. If you are just beginning in business and you decide to manage your payroll internally, then it will be a long-term cost to your company’s revenue and labour resources. When you outsource your payroll, all of the stress and costs associated with payroll management will disappear, as you’ll have a dedicated service from a specialist 24/7.

Trusted Payroll Company in Bromley

Now that you know more about all of the costs associated with internal payroll management, if you are searching for a reputable payroll company in Bromley - Clockwork Contracting is the provider to choose. 

Outsourcing your payroll with us will eliminate all of the stresses, overheads and administrative burdens of doing it yourself. We provide a dedicated payroll manager who liaises directly with HMRC and/or pension providers on your behalf. 

If you’d like to find out more, then please do not hesitate to contact us today. You can reach us on 0203 0042 262 or email us at [email protected] and we’ll get back to you as soon as possible. 

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