In a recent survey, over half of accountants questioned are looking to increase their fees due to the introduction of Real Time Information (RTI) coming in to force in April 2013. And with Payroll Year End approaching, businesses should review their current payroll procedures now and think about a DIY approach.
It is estimated that over 700,000 small businesses in the UK currently outsource their payroll. However, it’s worth noting that even if a business uses an outsource provider they’re still open to fines and penalties as liability will remain with them even if the outsource agent makes an error or late submission.
Many small businesses may be daunted by the prospect, and understandably, nervous about being compliant with legislation, not having payroll expertise, and fear of fines and penalties from HMRC for incorrect submissions.
As a result many outsource their payroll as they believe it is quicker and more cost effective than in-house software.
However, in-house software can automate payroll processes, so there’s no need to be an expert and ‘shut-up-shop’ for a week.
Take a look at the comparison table compiled by our payroll experts, which compares in-house software vs. an outsourced solution.
DIY V Outsourced Payroll for 5 Employees
|DIY payrollCost – Sage One Payroll from £60 for 1 year||Outsourced payrollCost – £210 for 1 year*|
|Collate timesheets – 5 minutes||Collate timesheets – 5 minutes|
|Enter timesheets into software – 5 minutes||Send timesheets to outsourcer – 5 minutes|
|Print payslips and reports – 5 minutes||Check payslips and reports -10 minutes|
|Check payslips and reports -10 minutes||Pay employees – 5 minutes|
|Pay employees – 5 minutes||Authorising submission to HMRC – 5 minutes|
|Submit to HMRC – 5 minutes||Pay HMRC – 5 minutes|
|Pay HMRC – 5 minutes||–|
|Total minutes – 40||Total minutes – 35|
As you can see, this highlights that the time needed to complete tasks for outsourcing payroll is relatively the same as doing it in-house.
The costs however, are quite different, showing that an in-house solution can save a significant amount of money and keep you in control of your payroll:
Year 1 – £150 saving
Year 2 – £450 saving
Year 3 – £750 saving
Don’t just take our word for it; see how easily you can process your payroll in under five minutes with Sage One.
Jack Ford, Small Business Team
*An average cost taken from research conducted amongst accountants. Outsourcing £3.50* per employee x 5 employees x 12 months