What are the Pros and Cons of Outsourcing Payroll in eCommerce?
Payroll, on the face of it, seems a simple concept. All you need is some simple calculations, right? Just times the work hours of each employee by their wage? In theory, yes, but in practice, payroll is often tricky. There are many deductions to take into account e.g. tax and NIC, as well as bonuses and time off. You’ll also have to plan ahead for holidays, making absolutely sure that you pay your employees correctly and on time. For these reasons, payroll can become a bit of a time vacuum, hoovering up your attention and distracting you from other areas of your business.
So what is a modern solution for this age-old problem? Outsourcing.
Outsource vs In House Payroll
Traditionally, businesses are run entirely in-house. In the case of small businesses and start-ups, you might do everything yourself. Even when your business is small and seemingly straightforward to run, you may quickly find yourself running out of time.
This is a classic dilemma. You might spend all of your time running the areas of your eCommerce business that you enjoy - and that you’re good at - which is great. But, neglecting the other details and business processes lets problems creep in and these can become disruptive if you ignore them.
Accountancy and payroll are two guilty parties here. One solution is to hire accountants or payroll managers internally, but this is costly and it means you’ll have to deal with the rigmarole and regulation of official employment, which is not ideal in many situations. Another solution is to outsource. This essentially amounts to hiring a service from outside of your business to take care of payroll and accountancy for you.
The benefits of outsourced payroll are numerous; you gain trained professionals at competitive prices and can often access state-of-the-art payroll software.
So, what are the pros and cons of outsourcing payroll?
3 pros of outsourcing payroll are:
De-Clutter Your Business
Dealing with too much ‘stuff’ in-house can mean a build-up of business clutter. Clutter in your environment clutters your mind! With outsourcing, you outsource both the task and the process. Payroll is simply not an object you need to worry about anymore. Yes, you can check your figures and make sure everything is in order, but as far as the actual calculations and payments are concerned - the tricky bits - you don’t have to worry.
Refocus your Time
When you outsource, you can refocus time on your core business. By freeing up your time, you can keep your eyes on the prize and your efforts streamlined towards the things you’re good at. That’s not to assume that you’re not good with figures or anything! But even if you are, payroll doesn’t exactly move a business forward, it merely maintains it. Outsource payroll to keep working on the progression of your business.
Reduce and Eradicate Errors
Payroll is a business process that requires impeccable attention to detail and accuracy. One screw up can cost you and your employees. It might even cost you your employees if you underpay or pay late. You don’t just have your employees to deal with, but HMRC too, and you’ll need to make sure all your tax deductions are square before submitting payroll to HMRC. Outsourcing payroll reduces payroll errors across the boards. Professional payroll software combined with trained outsourced accountants vastly reduces payroll errors.
On the flipside, 3 cons to outsourcing payroll could be:
Whilst some outsource payroll providers like Accountancy Cloud allow you to check in with your payroll 24/7 using integrated payroll software, this is not always the case. It might be that you lose control of your payroll and cannot readily access your payroll data.
In the vast majority of cases, outsourcing payroll will be much, much cheaper than in-house. But, depending on your business needs, you’ll have to compare the costs of outsourced payroll and in-house to make sure that it’s a good fit for you.
Confidentiality is always an issue regardless of whether you employ in-house payroll staff or outsource. It’s important that you choose an outsourced payroll service that you can trust. Most outsourced payroll services use the in latest-tech encryption to protect their customer’s data. This is superior to traditional payroll where unsecured spreadsheets are still commonplace.
Should you Outsource Payroll?
Any business that finds payroll in-house payroll problematic, time-consuming or costly should consider outsourcing payroll. It doesn’t matter if you have a handful of employees or hundreds. Whatever size your business is, outsourcing payroll yields many benefits that can help accelerate your business and fuel its progression.
Payroll with Accountancy Cloud
Here at Accountancy Cloud. we're proud providers of outsourced payroll and accountancy services. Our payroll services allow businesses to tap into next-gen payroll software, as well as access our trained accountants and financial advisers who will always be on hand to consult in the event of query, problem, or just for advice. Get in touch today to outsource your payroll the smart way.