The Chaos of Handling Payroll In-house and How to Deal with It

As a practice owner or accountant, handling payroll in-house can feel like navigating a labyrinth of regulations, compliance requirements, and ever-changing laws. The complexity of the payroll process can make it a daunting task, even for the most experienced professionals. In-house payroll management is, therefore, a highly chaotic and time-intensive affair that may need your urgent attention.

Accountancy practices are often caught in the web of capacity challenges, increasing competition, and extensive pressure to cut costs. Each practice owner has their own way of dealing with these challenges – some prefer retaining the function in-house, while others opt for payroll services for accountants. With the payroll season underway, it is important to understand the challenges of handling payroll in-house and how to deal with them.

In this blog, we will explore some dos and don’ts that accountants should keep in mind when managing payroll.

Why is the payroll season so chaotic?

The UK payroll season comes right after the busy Self Assessment season. Accountants are, therefore, already overwhelmed from toiling right after the holidays. This is a time when they deserve a break but are forced into another exhausting accounting period.

Practice owners, on the other hand, strive to manage operations in-house, explore new technology, and make payroll outsourcing decisions while attracting new clients and fostering stronger relationships with existing ones.

The payroll season comes with a vast set of challenges. Where the task itself is daunting, the 2023 payroll season could be tougher owing to the layoffs and pay cuts facilitated by the ongoing recession. Plus, if you work with a client having a multi-country presence, you will be expected to stay abreast of the latest payroll legislation of these countries.

In this situation, if you lack the latest technology or professional support from outsourced payroll providers UK, the payroll season can get real chaotic.

The Dos and Don’ts of Payroll Management

When it comes to managing payroll, accountants need to be equipped with the right tools, knowledge, and resources to ensure accuracy, compliance, and efficiency. Payroll management can be a challenging task, but with the right approach and mindset, it can also be a rewarding one. In this section, we will explore some dos and don’ts that accountants should keep in mind when handling payroll.

Dos

Stay abreast of legislative changes

Payroll calculations are subject to the latest legislation. These regulations keep changing as the government amends tax rates, revises NIC rules, and introduces new schemes to support businesses and employees. Accountants must stay abreast of these changes to be able to manage their clients’ payroll processes effectively.

Devise a robust payroll strategy

Before stepping into the payroll season, accountancy practice owners must devise a robust payroll strategy. This may be challenging as the payroll season begins right after the Self Assessment season. However, a well-devised strategy is critical to navigate the payroll season effectively and ensure everything goes as per plan. If you plan to employ external payroll services for small businesses, remember to factor them into your strategy.

Outsource to create capacity

Outsourcing is a common trick in the book, helping accountants facilitate cost savings and scale their services up and down as required. In modern times, outsourcing is used extensively by accountants and practice owners to create capacity within their firms and bridge the current talent gaps.

Payroll outsourcing services allow you to access highly experienced and dedicated payroll specialists across geographical boundaries, whose expertise can make your processes efficient and hassle-free. Based on your requirements, you can hire offshore as well as onshore resources to work alongside your team, all while saving up to 50% of your in-house costs.

Communicate regularly with clients

Another key to-do when managing payroll is communicating with clients. Connect with your clients regularly to understand their processes and requirements and get your queries resolved. If you outsource your services to an external payroll provider, the outsourced team often handles the communication part for you.

Don’ts

Rely solely on manual processes

This is one mistake many accountants make. Accounting, as a profession, is evolving, and so is the payroll process. It is, thus, essential to match the industry’s pace and do away with traditional processes.

Instead of solely depending on manual processes that take up a lot of time, automate tasks wherever possible. Employ the latest technology, such as cloud computing, automation, artificial intelligence, and machine learning, to access and manage data efficiently, minimise errors, and boost productivity. Partnering with one of the top outsourced payroll providers UK can facilitate technological advancement for your firm.

Fail to update records and documentation

When handling payroll, it is extremely important to keep all records and documentation updated at all times. With companies hiring and laying off employees rapidly during the recession, you should update your employee database regularly. Along with well-maintained records, ensure you finish all the essential documentation on time, including client and HMRC reports.

Ignore the need for regular process audits

Whether you manage payroll in-house or rely on payroll outsourcing, regularly reviewing your payroll process for efficiency and possible gaps is essential. You may have a robust process in place, but as the industry evolves and businesses adopt new technology, it is important to streamline it. Review your technology and efficiency, assess all the necessary documentation, and ensure the relevant information is shared with HMRC regularly.

Summing up

With the payroll season underway, it is time to prep up your staff, devise your strategy and have backups ready. Examine your firm’s technical readiness and capacity to handle the oncoming workload. If you plan to attract new clients or take up additional projects, payroll outsourcing services should be the right choice.

When it comes to handling payroll, accountants must have a checklist handy to ensure the entire process is streamlined and managed properly. Put the above dos and don’ts into practice to efficiently sail through the payroll season.

Need help with payroll? We’re right here!

Sometimes, no matter how well you strategise, things don’t go as planned. That’s precisely why outsourcing is a viable solution for modern accountancy firms.

We understand you are just out of the busy tax season, and your teams must still be overwhelmed. So, how about delegating the mundane work to us while you focus on re-energising and making a comeback?

QXAS, a global leader in accounting outsourcing, is a specialist in payroll outsourcing services for accountancy firms. We provide the best talent in the industry, assure quick turnaround time, facilitate substantial cost savings, and help accountants scale their practice effortlessly. Check out our latest payroll outsourcing packages for accountancy firms, or book a free consultation with our outsourcing expert today.

To learn more about our services, call us at +44 208-146-0808 or drop an email at [email protected].