Why Outsource Payroll for Small Business: A Brilliant Business Decision

We’re thrilled to celebrate National Payroll Week by featuring our very own Natalie Standen, ACIPP. Natalie, also known as the “Queen of Payroll,” explains why choosing to outsource payroll for small business operations is a game-changer. With her expert insights, you’ll see how outsourcing can save time, improve accuracy, and ensure compliance with payroll regulations.

1. Natalie, what do you see as the main benefits for a business looking to outsource payroll for small business needs?

“Many small businesses need to process an accurate payroll on time, but this might not be a full-time job for an expert. By choosing to outsource payroll for small business needs, you can put that cost against something else in your business and save on headcount, as outsourcing means you’ll only pay for the payroll support that you need.”

“Outsourcing also provides peace of mind, as businesses can trust that their payroll is compliant with the latest legislation. The Chartered Institute of Payroll Professionals (CIPP) and Gov.uk offer detailed guidelines, but interpreting them correctly is where an expert makes all the difference.”

2. Why can’t a business manage their own payroll in-house?

“They can, and it is possible. But like many things, the result is always faster and more accurate when you’ve got an expert doing it every single day. We do have clients who manage their own payroll in-house, and they can come to me for advice and guidance if there is a complex matter. Often, business owners see the benefits of outsourcing payroll as they realise how complicated it can be to get it right.”

“Our clients also see the benefit of knowing that their payroll can be covered throughout the year. We can handle payroll even during holidays or sick leave. Plus, outsourcing eliminates any potential workplace gossip about salaries, which can be a common challenge for some small businesses.”

3. What do business owners find challenging about payroll?

“Some aspects of payroll can be quite straightforward. But pension schemes often trip business owners up because they can be complicated to get right. Equally, sick pay, National Minimum Wage (NMW) changes, and maternity leave are common occurrences that can significantly impact an employee’s pay. Getting these right is essential.”

“Many of our clients appreciate knowing that their trusted payroll provider is using the best software and staying fully compliant with the latest legislation and employment laws. For example, we ensure adherence to HMRC guidelines, so everything is handled accurately and on time.”

4. What do you mean when you say outsourcing payroll helps businesses save time?

“Payroll isn’t just about processing salaries. There are tax codes to review, pensions to calculate, and ever-changing regulations to adhere to. These tasks can take hours each week, especially if payroll isn’t your area of expertise. By deciding to outsource payroll for small business tasks, business owners and managers can focus on growing their business rather than diving into spreadsheets and compliance.”

5. What happens if payroll is done incorrectly?

“If payroll isn’t done correctly, there can be serious consequences. Employees might be underpaid or overpaid, tax might not be deducted correctly, and it could lead to penalties from HMRC. Payroll is a legal obligation, and mistakes can damage employee trust and morale. That’s why accuracy is so important.”

6. How has technology improved payroll processing?

“Technology has transformed payroll! Software now automates much of the process, from calculating tax deductions to generating payslips. However, even with automation, an expert is needed to ensure everything is set up correctly and to handle exceptions like bonuses, deductions, or leave payments. At Coopers&Co, we use the best software to provide our clients with accurate and compliant payroll.”

7. Is it expensive to outsource payroll for small business needs?

“Not at all! Many businesses are surprised at how affordable outsourcing payroll can be, especially compared to the cost of hiring a full-time payroll professional. You only pay for the services you need, and the time saved can be reinvested into growing your business.”

8. Can outsourcing payroll help with compliance?

“Absolutely. Compliance is one of the biggest reasons businesses choose to outsource. Legislation changes frequently, and staying up-to-date can be a full-time job. By working with experts, businesses can ensure they meet all requirements, from pensions to tax deductions, without having to keep track of every regulatory update themselves.”

9. Does outsourcing payroll offer more privacy within a small team?

“Yes, this is a big benefit, especially for smaller businesses. When payroll is handled internally, it can sometimes lead to workplace gossip about salaries, bonuses, or deductions. Outsourcing keeps everything confidential and avoids any awkward situations within the team.”

10. Finally, how has payroll changed over the course of your career?

“Everything’s changed! There was barely any automation when I started out in payroll. The introduction of statutory payment SPP in 2003 was a big change, followed by the auto-enrolment phased rollout in 2012. Then, in 2020, we had furlough to contend with during the COVID-19 pandemic. It’s an ever-changing payroll world!”

Meet Natalie Standen, the Queen of Payroll