But what are the costs which accountants have to incur? The most important one is the Set-up cost which is the fee to initially make arrangements to avail the payroll with a supplier. This payroll will vary according to the size of the accounting firm and the accountant’s requirements. For a new company, the set-up charges will be 10 pounds per company as a one-off cost. The second cost to be incurred is the Running payroll cost which varies based on how many pay-slips are processed by the accounting firm. A firm can be expected to pay between 2 to 3 pounds per pay-slip. Many accountancy outsourcing services companies give a discount when there are more pay-slips to process each month.
The third cost is the Auto-Enrolment cost. Accountants usually offer Auto-Enrolment services which are made up of three components which are the Initial review stage, the Registration stage, and Compliance respectively. The initial review stage incurs costs of 15 to 25 pounds per client. The registration stage incurs costs of 25 to 35 pounds per client. Up to a maximum of 10 employees. In the compliance stage, the firm could pay 0.75 pounds per pay-run to the employee. HMRC has made year-end filings very simple for each time the payroll is processed. However, the final FPS or EPS has to be submitted before the 19th of April each year. The firm might be expected to pay 20 pounds per EYU for client set-up and processing.
How can a firm determine if payroll outsourcing is suitable for their accounting practice? In order to work out whether it is cost-effective one has to ask this question. The main reasons to choose this are:
- Saves time: It will be beneficial to small companies where the owner of the business will deal with the administration of the business as well. The time element will be very minimal in such cases as there might too many things to handle at once. For employers with more staff, it makes sense to have a designated accountant who will deal with payroll.
- Proper expertise: Payroll is ever-changing and continues to change as more regulations are added. It is a very expansive exercise and involves a lot of time and cost. It will make the job easier for a firm if they delegate this responsibility to professionals who are well-equipped with the skills to perform this task.
To make the maximum profits, accounting firms should move to a model that addresses their accountancy and bookkeeping requirements and an accountancy outsourcing and outsourced bookkeeping service provider help here. Such organizations can also take care of personal tax returns as well. It is a straight-forward and level-headed way to turn a low-margin service into something very lucrative while remaining cost-efficient in terms of hiring experts and saving time.