Why Entrepreneurs Need to Outsource their Payroll

Dec 05 2019 Financial Management

Entrepreneurs are the creative spark behind every new business. Often, they are dynamic forces of nature … but there are some things entrepreneurs should leave to others.

Confidence. Determination. An appetite for risk. Passion. Adaptability. The list of traits traditionally associated with entrepreneurs is long. However, there is one thing every successful entrepreneur must acknowledge if they are to make a success of their venture – they simply cannot do it all.

The trick, of course, is knowing what needs your personal attention, and what you can leave to an expert set of helping hands. After all, time is money. For every business, there are some tasks which are more efficiently done by value adding professionals , freeing up the entrepreneur to do what they do best.

Google any list of ‘5 things an entrepreneur needs to outsource now’ and payroll comes at or near the top of the list.

It does so for several reasons:

There are better ways to spend their time

For some, mundane, repetitive and detailed tasks hold little appeal. Others may love the prospect of wrangling a monthly payroll and negotiating the intricacies of auto-enrolment, NICs and more. But either way, as the driving force of a business, a leader really needs to be focusing on the bigger issues. Especially when there’s low cost expertise at hand to take the job on.

A Payroll needs to be processed right

Every entrepreneur is pulled in a million different directions, with constant demands on their time and attention. But if there’s one thing you can’t afford to get wrong, it’s paying your people – on time. Paying HMRC on time is also very important. Outsourcing to those who know what they are doing, ensures payroll is done right, which can help keep your people, and HMRC, onside.

A new business needs to be compliant

It’s all too easy for new businesses to lose that start-up energy and dynamism by becoming bogged down in compliance issues – yet few entrepreneurs know all the regulatory requirements incumbent on a business, let alone understand how to fulfil them.

From the Apprenticeship Levy to the National Living Wage, pensions auto-enrolment to the gender pay gap, outsourcing payroll can give you the reassurance that your business is acting legally and responsibly, whilst removing the headache of setting up the systems and gathering that data.

It cuts costs and frees time

In any new business it’s usual for people to wear many hats and juggle a range of roles and duties. Time pressures are constant, and it can be a real challenge to stay in control of a full workload .

It makes sense, then, to outsource payroll – a relatively self-contained process that can be neatly offloaded to free up your time. But in doing so, it can help you cut costs, first, because all those hours which will otherwise be poured into data entry can be put to something more productive (and lucrative). And second, because the total cost of in-house payroll processing is often greater than outsourcing – where technology and expertise get the job done more efficiently.