Payroll is a crucial aspect of accounting with intricate details that many business owners struggle to manage alone. Outsourcing to a trustworthy party can, therefore, simplify the process, providing a chance for accountants to offer comprehensive professional assistance in this field.
Payroll, however, requires its strategy and optimisation. Here, we offer a brief guide to how accountants can go about outsourcing the payroll function of their clients and thus provide a more comprehensive service experience. Let us go:
What is the payroll fiscal year in the UK?
The fiscal year in the UK runs from 6 April until 5 April the following year and is the period for which a company needs to report its financial information to HMRC. Every April, a company begins employee tax computations from scratch and collects tax saving declarations from them.
In other words, a big case must be made for aligning a company’s payroll operations with the fiscal year and ensuring that their employees take home the correct tax-adjusted amount every time. That is precisely what accountants can help with.
Why is payroll so important?
Payroll may not be fun, but it is essential for businesses. There is the compliance aspect to it, and there is the fact that employees need to be paid on time. It is also an incredibly complex process for those not conversant with the rules.
Things like commission, leave, benefits, pension deductions and overtime pay must be tracked and reported in real-time. It is so complex, in fact, that many accountants end up sidelining it too. That is where outsourcing the payroll function of the clients makes a difference!
Seriously, there is enormous scope here for accountants to step up through payroll outsourcing, take charge of payroll and earn the trust of their clients. Not only are you saving them money and legal hassle, but you are also saving them valuable time.
Benefits of outsourcing the payroll function of your clients in a new fiscal year
1. Better organisation
Outsourcing enables accountants to establish clear records and efficiently organise payroll information for their clients.
2. Tax compliance
It ensures all business tax requirements are up-to-date and in compliance with current regulations.
3. Budgeting accuracy
It is easier for accountants to track expenses and forecast budgeting for their clients in the upcoming year when they have specialist support.
4. Improved accuracy
Taking the help of outsourced accountants at the start of the new fiscal year minimises the chances of errors or inconsistencies, as previous year-end data can be closed, and all payroll information can be reconciled.
5. Easier year-end reporting
It saves the accountants from first validating the earlier month’s or year’s records. In other words, there is no scope for YTD miscalculations when client payroll functions are outsourced from the beginning of the fiscal year.
How to effectively provide payroll services for clients via outsourcing
So you offer payroll as part of your accounting services suite. Excellent! The next step is to think about how you are going to run it, what tools you will need and which clients you will offer it to:
1. Have a clear target audience
When you are just starting out with payroll, it makes sense to pick one sector, develop experience and expertise in the process and then branch out. Certain industries, in fact, have specialised payroll laws where an outsourced accountant can come in especially handy, such as construction companies that need to follow CIS legislation.
2. Be transparent about data processing
Develop clear policies and procedures for handling client payroll data and information. Ensure that you have a secure system for storing and processing client data. This may include data encryption and backup processes.
3. Communicate proactively
Establish clear lines of communication with your clients to keep them informed of the jobs to be turned around and payroll status, respectively and resolve any issues that arise in a timely manner.
4. Review and revise your payroll outsourcing strategy
Continuously review and improve processes to ensure payroll services are delivered efficiently and accurately. Offer additional services such as direct deposit, tax compliance, and employee benefits administration to add value to your offerings.
5. Have an expert point of contact
When you are outsourcing your clients’ payroll, there needs to be one expert who will champion the payroll strategy and prioritise its efficient running. Payroll software will do a lot of the work, but you need dedicated humans to look after your clients too!
How Stellaripe can help with outsourcing the payroll function of your clients
Payroll is a valuable addition to your service roster, but it does not stop there. Done right, payroll outsourcing can serve as a starting point for clients to trust you with more services. For instance, with the insights you get on the health of the business from payroll data with the help of our experienced accountants, you can offer valuable advisory services.
Moreover, since payroll happens at least once a month, outsourcing to Stellaripe gives you a chance to stay in frequent touch with your client and thus offer them more specialised services, like financial planning and forecasting.
Business owners are busy, and if they trust you, they will happily hand over all of their accounting/finance functions to you. Simply put, outsourcing client payroll with Stellaripe’s help will free up your time and save you from compliance headaches, ensuring your clients’ employees are paid accurately and on time.
Over to you
In conclusion, the humble payroll process can be beneficial for accountants to build recurring revenue and demonstrate how well they understand their clients. By syncing payroll with the fiscal year, accounting becomes much simpler, and employees always get outsourcing support. This is a major value-add for busy clients and, thus, a must for smart accountants in 2023.
If you are thinking of outsourcing the payroll function of your clients but do not know where to begin, get in touch with us by following out the contact form.