Retail/Hospitality Payroll: To Outsource or Not?
Payroll is perhaps the trickiest part of maintaining the finances of a business. It is part of an industry that it is essential to get absolutely right – nothing undermines employee confidence quicker than messing up their pay, but that also requires a number of factors to be considered before it is completed – and it needs to be done every single month!
Payroll Points to Remember
Payroll is not as straightforward as might be thought, for a number of reasons. In the retail and hospitality industries turnover can be high. They are demanding job sectors, with excellent people skills a necessity – not everyone can deal with customers, especially that small band of customers who feel that they can treat shop staff and hospitality workers with rudeness that would be inconceivable in any other walk of life! This means that employee turnover can be fairly high, even in the best organisation.
Then there are the various pay rates to take into account – under or over 25? Do they have a tax code already? Once the pay rate and tax code have been sorted out, student finance, child maintenance and pension contributions need to be deducted. And that’s before even getting to tax deductions, NI and matching those employee pension contributions or the matter of holiday pay! Tip sharing schemes must be taken into account too, and the whole thing can end up taking hours and hours over a couple of days…
Passing the whole lot over to a payroll company seems to be the perfect solution, but this can come with its own negatives. Figures must be made ready early every month, it is hard to estimate what the labour costs will be until after the payroll run has been completed, and sometimes timesheets might not be completed to their satisfaction, meaning that the entire pay run is held up while the paperwork passes down the chain to the relevant worker, and back up along the management hierarchy.
Or Not Outsource?
But traditional outsourcing means additional expense and not many companies can afford to add to their overheads without serious consideration of how it will affect their bottom line. The cost of paying someone to do the payroll might be as much as a whole extra salary albeit a part-time one – can you afford that? But is it ever really a viable solution to muddle through as best you can?
The Best Way
Fortunately, there is a middle way. What about using third-party expertise whilst still keeping all the information stored securely on your servers as well as synchronised on the Cloud? Having the payroll information on your own secure system means that the relevant people can access the data whenever necessary. This could be auditors, directors or financial managers – all of whom could be seriously disadvantaged by having to request and then wait for final payroll figures when preparing budgets, proposals or even the year-end accounts. But even as you peruse last month’s figures, for example, this month’s payroll can be being extracted and run for you, meaning that you have the best of both worlds. Instant access to all your figures almost in real time, and a payroll expert whizzing through your timesheets without incurring an enormous salary from your coffers.
Safe in the Cloud
Cloud-based security is reassuringly robust. It is in the interests of companies, such as Deputy (http://www.deputy.com/), who have access to other people’s data to keep it secure and stay on top of any tech industry innovations – their business will suffer if breaches occur – and because they are being paid by many companies for their services, they can afford to invest in the very best in data protection technology and facilities. Using this sort of cloud-based service is a great way to keep your information – and that of your employees – protected with up-to-the-minute protocols and actively tracking the latest innovations in or threats to data security. There are few companies that cannot benefit from the above-mentioned solution, whether it is a big company, a small one or one in rapid growth.
Of course, ultimately the decision of whether to outsource or keep payroll in-house is up to the needs and resources of the company. It is not a decision to be taken lightly, but hopefully, with the above information, it is one that can now be made with confidence.