April 30, 2014
Cutting your payroll expenses – Is it hard?
Payroll – vital to businesses but it can be expensive…
To cut down these expensive processes, you first have to get to grips with it. I’m not talking about taking the easy route of cutting jobs or expenses – instead understanding how to make the function itself more streamlined and efficient.
Understanding and reducing payroll costs
It’s no secret that payroll can be complex – admin, accounting, finance, human resources, technology and management skills are all required.
While salaries are the main expense, there are many other associated tasks and costs:
- Calculating the pay for each category of employees
- Entitlement to statutory rights – maternity, adoption or sick leave, as well as holidays
- Other benefits – bonuses, overtime etc
- Withhold taxation and schemes such as health or life insurance and various benefits both from the employee and the employer’s sides
The payroll department then must issue cheques or direct debits and payslips to each employee and securely store the information.
Should you use In-house or outsourced payroll?
There are advantages to both of these. But while in-house may have a better knowledge and capacity within the company, it costs money to provide tools like software, updates and training.
That’s why outsourcing payroll is a great cost cutting expense – although there is usually a fixed cost per employee per month.
However, there is more to payroll than payslips – Legal aspects, technology, finance, and human resources management etc – which is which may alone be a reason to outsource as a cost cutting exercise.
So where can I save?
Quick and easy savings can be made by looking at the current structures and processes of a business – for example, larger companies which pay weekly will save a lot by switching to monthly payslips or of digital payslips.
Having a payroll expert will bring knowledge in every aspect of your payroll practice and projects and adapt the solutions and technology to your individual payroll requirements. They will also take into account elements such as benefits suppliers, payroll software, training, etc.
What will a payroll expert do?
- Compare processes with similar companies
- Find errors and ways to increase efficiency and accuracy
- Find savings in employees’ benefits providers
- Ensure compliance with ever-changing regulations
- Advise on technology and software if needed
- Improve data accuracy and process
- Advise on the best way to distribute payslips and report
- Get the more secure data storage solutions