This guide aims to show you how payroll outsourcing works and key things you need to consider when outsourcing payroll. This will give you a better idea of what to expect from the service and how it can benefit your business. At FMP Payroll Services (formerly Bond Payroll Services) we work with organisations from all sectors to ensure their payroll is processed accurately and on time, so we know all there is to know about payroll outsourcing and how to make it work for you.
The Payroll Outsourcing Guide includes:
- An analysis of the current state of the payroll market
- Payroll basics and outsourcing models
- A step-by-step guide to the outsourcing process
- Guidance through the risks of implementing an outsourced solution
Your Definitive Outsourcing Guide from FMP Payroll
Outsourcing your payroll is an excellent way to streamline your HR functions and will save you money. Download our free, comprehensive guide to outsourcing payroll. Learn how to make the most of your outsourcing provider, what questions to ask and much more!
STEP 1: CHOOSE BETWEEN MANAGED PAYROLL OR BUREAU SERVICE
The first step is to decide how much of your payroll function you want to outsource. This will depend on how much staff and expertise you currently have in-house and how much you want to keep. It will also depend on how much direct control and visibility you want to retain.
A managed payroll service involves outsourcing every aspect of your payroll to a third party – including data entry and running reports. This means that, apart from collecting payroll data internally and passing it to your payroll business services provider, you have nothing else to do.
Managed payroll is a particularly beneficial solution for companies that cannot or do not wish to employ staff to administer payroll, or maintain in-house expertise regarding pay, taxation and compliance issues. A fully managed solution will tend to cost more than a bureau solution – but this is usually offset by savings in personnel and other software costs.
By contrast, a payroll bureau service involves outsourcing the processing part of the payroll function, while keeping data entry and reporting in-house. This means that your staff will enter payroll data directly into the payroll service provider software and run reports themselves as needed. The provider then arranges for the data to be processed and payslips produced.
This outsourcing solution is suitable for companies that are happy to keep the data entry function in-house, but want to benefit from the specialist software and processing facilities provided by a payroll bureau. A bureau solution will tend to cost less than a fully managed solution, although the client continues to bear the cost of data entry.
At FMP Payroll Services we understand that outsourcing your payroll, whether fully managed or bureau, is a large step to take and requires proper consideration of your company’s overall circumstances. We are happy to talk with you to help you decide which service would be most appropriate for you. Contact us now for a review of your payroll.
STEP 2: CHOOSE A PAYROLL BUSINESS SERVICES COMPANY
Once you’re certain that outsourcing your payroll will be beneficial, your next step is to choose a payroll business services company who can deliver the service you need. Here’s our list of what to look for when making your choice:
Track record and proven expertise
You want a provider who is already successfully managing the payrolls of a large number of companies of all sizes. This gives you the assurance that the company has the resources to accommodate your needs and the practical expertise to deliver. FMP is payroll provider to many large corporations, SMEs and non-profit organisations. We also have a large team of payroll professionals who form our permanent staff – the majority of whom hold IPP diplomas.
It’s essential to consider a provider whose technology can easily cater for all the quirks and exceptions within your current payroll system. It also needs to be up to date with current pay and tax legislation. FMP Payroll Services perform a requirements capture at the set-up stage and then build a database tailored to your company’s needs. We use Payrite software which is feature-rich and is continually updated with all new pay and tax changes.
Your provider needs to be BACS approved and HMRC approved. Since they are going to be moving large amounts of money around on your behalf – as well as submitting figures to the revenue that your company will be liable for – you need to be absolutely sure that they have the necessary processes and procedures in place to ensure security and accuracy. FMP Payroll Services are BACS and HMRC approved.
Training and support
It is important to choose a provider that can give you specialist training (if using a bureau service) and offer constant support as standard. FMP delivers its own training to your staff using our own payroll consultants, and then provides you with a dedicated Payroll Manager who is available at any time to discuss queries or deal with problems. Our aim is to work with clients as partners – working continuously to adapt to the changing needs of your business. We can only do this by staying closely in touch with our clients.
Need some light reading to help you formulate whether outsourcing is right for you? Read our ebook.
This ebook is a must-read, giving valuable pointers for any manager considering outsourcing.
What things do you need to consider to make an informed choice?
Step 3: DEFINE YOUR PAYROLL REQUIREMENTS
This is an important part of the set-up stage for payroll outsourcing. If you choose to work with FMP Payroll Services, we will help you to define all the elements which need to be included in your payroll.
Taking time to ensure this stage is performed thoroughly means you not only have a payroll system which works correctly – it also means that we understand your business and are in a better position to work with you as partners.
STEP 4: BUILD AND TEST YOUR PAYROLL SYSTEM
The next stage involves building and testing your payroll system based on the requirements captured above. At FMP we use our Payrite software to do this, then we populate it with employee data.
The payroll system is tested by running it in parallel with your existing system to ensure that all calculations are being carried out correctly. Only when we are satisfied that it is working do we switch you over to using the new system.
STEP 5: PROVIDE DATA – AND RELAX!
The final stage is the easiest – all you have to do is enter weekly or monthly data into the payroll system (bureau service) or send us the data to enter for you (managed service). We do all the processing, payslip production and distribution, and create any reports which you have specified.
At the end of the financial year we produce end of year figures for you and submit them to HMRC automatically on your behalf. If any issues or questions do arise, you can call your dedicated Payroll Manager and we’ll sort things out straight away.
With our payroll outsourcing services, we can completely remove the headache of payroll processing, and free up valuable time and money for your business to channel into more important, revenue-boosting objectives.
For more information on our payroll outsourcing services, and for assistance in choosing the right solution for your organisation, please contact us now for a review of your payroll.