For small business owners looking to reduce their administrative load and reduce outgoings, outsourcing payroll is a quick win. And, if they have an accountancy practice already managing business finances, it makes sense to keep payroll under the same umbrella, rather than on-boarding an additional provider for payroll.
Payroll delivery and legislation around tax and pensions however, is becoming increasingly more complex, making delivery of payroll services more cumbersome and costly. For accountancy firms who provide full end-to-end services to clients, payroll and reporting has become a loss-leader. These laborious administrative tasks often detracting accountants and taxation experts from lucrative, high value client work.
It makes sense to outsource.
The Making Tax Digital impact on accountancy firms
More and more Accountancy firms are relying on outsourced payroll services to meet both existing client payroll needs, and as a unique service strand to attract new customers.
Compliance with Making Tax Digital legislation became compulsory on 1 April 2019 for most VAT registered businesses with a taxable turnover over £85,000. The new phase came into force on 1 April 2022. During that period, Qualitas has seen a 17.5% increase in accountancy firms using our outsourced payroll services, choosing from the white label service or partnered services.
Why are accountancy firms outsourcing payroll?
Payroll is a repetitive but essential processing task. Necessary filing in the form of reporting pay and the end-of-tax-year submissions, calculating tax and NI deductions, creating payslips and generating the end-of-tax-year P60 forms. Sick leave, pensions, the emergency legislative changes we saw through covid however bring a level of complexities that’s best left to the experts.
Why do small businesses outsource payroll?
When small businesses outsource payroll from in-house, the efficiency gains and cost savings can be monumental, including
- Greater time efficiencies
- Reduced payroll costs
- Expert payroll service delivery
- Access to cutting edge, Making Tax Digital compliant software
- Deep domain knowledge of payroll regulatory landscape
The benefits of outsourced payroll for accountancy practices
When accountancy firms outsource to a payroll provider, who can white label their services to the business or accountant’s brand, both client and the accountancy firm win.
Don’t already offer payroll services to your clients? Here’s a few reasons why you should.
Generate more business and revenue
Providing payroll to new and existing clients helps attract new clients, retain existing ones who may be scoping a full-service provider and generate recurring monthly revenue for your practice.
Gain value-added competitive advantage
As a one-stop shop accountancy firm, your full-service practice immediately a more attractive service provider than competitors who only offer accountancy services.
Solidify your position as a trusted advisor
By taking on this additional strand, you’ll gain a deeper understanding of your client’s organisation and financial health rather than working in a silo. Use these insights to become their trusted partner, offer tailored financial advice and support growth, often resulting in additional service use.
Improve end of year reporting and auditing
As payroll processor, end of year reporting and audit processes become quicker and much easier, with all the data you need at hand and on-site.
You can develop a lucrative niche
Some accountants run payroll services for businesses in specialist sectors, such as agriculture and hospitality, which have specific requirements that may include zero-hours contracts.
Build your practice’s reputation
As a full-service provider, you’ll benefit from reputational gains and improved client trust than single practitioners.
Ready to set up outsourced payroll for your accountancy firm?
At Qualitas, we offer fully-managed payroll services to our accountancy clients at highly competitive rates. Choose from our white labelled service or partnered service. Our payroll experts are UK-based, with over 150 years of combined experience across the full payroll spectrum, including but not limited to pension auto-enrolment, absence/sickness reporting, BACS payments, holiday scheme management and P11d preparation and submission.
Add on Qualitas value added payroll services to your client offering and avoid manual admin, the risk of human error and fines, while taking advantage of our up-to-the minute software automations.