Corporate HR & payroll outsourcers
If you decide to outsource your payroll to a bureau or full managed service, you can take advantage of the expertise of people who do nothing but deal with payroll all day. But you also lose a degree of control – the most cost-effect solutions depend on doing things the outsourcer’s way. Once you start looking for external suppliers, the choices are mind-boggling, ranging from full-service corporate outsourcers such as ADP, Ceridian Centrefile and Northgate, who will handle all your HR needs, to local accountancy firms and payroll bureaux who would be happy to relieve you of the weekly/monthly admin burden. For more on this topic, see the 2005 Outsourcing Debate article.

The top HR/payroll consultancies listed here can take full responsibility for all of your company’s HR activities and effectively become a co-employer of the workforce. If you want, they will take full legal responsibility for employees – including hiring and firing, training, development and remuneration. Such organisations present themselves as partners for the business, and undertake to deliver all the HR processes needed to achieve your strategic objectives. If you are talking to these consultancies, the scale of operations and their involvement with clients is such that filing PAYE returns is unlikely to be your main topic of conversation.

Enterprise software incorporating payroll
If you’re already running an ERP suite that handles most of your business and finance operations, it’s likely it will handle your payroll too. The larger ERP families such as mySAP and Oracle and its subsidiaries have moved to Web-based eHR applications. Implementing these systems is not a trivial activity; it should be part of a strategic plan for the organisation rather than a point solution for payroll.

Integrated HR/Payroll software developers
In case you haven’t noticed, payroll is something of a software catalyst – it is a very volatile discipline that can stimulate companies to look more widely at its business processes. For those companies who look beyond payroll as more than a monthly chore or the poor relation of the finance department, upgrading payroll software to accommodate Lord Carter has proved to be a stepping stone towards integrated HR & payroll. The integrated software suppliers in this bracket systems have prospered in the past couple of years by compiling centralised databases for both HR and payroll fuctions – leading to better reporting and budgeting on headcount and “human capital” costs. Installing integrated HR and payroll systems can involve tens of thousands of pounds and demands significant organisational commitment. It’s not something to consider with a tight deadline, but a standalone payroll module from these companies could provide a first step towards a new, integrated approach.

New wave “payroll as a service” providers
Web-hosted “self-service” HR and payroll applications are now the norm among corporate users, but if you’re a smaller organisation there are a host of new online providers looking for your business. Karen Paterson, who set up the Patersons online service, argues that outsourcing the entire payroll to an online service means not only that the year-end and in-year returns will be taken care of, but so will any upgrades to the payroll software. MidlandHR’s payroll & legislation adviser John Black notes that the ever-increasing complexity and costs of complying with employment legislation and regulation are making outsourcing even more attractive. “The advent of mandatory in-year electronic filing may give this further impetus as it’s no longer just a year-end issue,” he says. Patersons and companies such as Abel Internet and NetPayDue.com were providing web-based systems before the initial Lord Carter deadline fell in 2005, but several others emerged in online rush that followed. The majority of the new entrants (with the exception of Jersey-based Multiwage.com) specialise at the low end of the market, handing straightforward payroll runs for SMEs. Other such as Altus and SAA Consultants, specialise in providing connections to online services via the Government Gateway, but do not supply the payroll application software.

SME accounting software incorporating payroll
Many companies employing fewer than 250 people run accounts software that has a companion payroll module. This is the reason why Sage, the leading supplier of accounts software, is also the market leader for payroll. If you are keeping the payroll function in house, your existing accounts supplier is a logical place to start, unless the program cannot handle online returns or lacks particular features you want from your payroll.

<a name="SME payroll"SME payroll software developers
These are the payroll specialists, who might be characterised as the “does what it says on the tin” brigade. Their programs are often popular with payroll managers, as they may include extra features to make their life easier. Payroll specialists can usually offer a lower price because they don’t have to hire programmers for all the other modules that come from suppliers offering payroll along with accounting and HR functions.

Payroll bureaux that also develop and sell software
Haven’t made your mind up about in-house or outsourced payroll? Then you might consider a company that runs a payroll bureau, but can supply you with your own software later if you want to take it in house.

Payroll outsourcers/bureaux
If you are determined you want to outsource your payroll, here is a small selection of suppliers. Check your local telephone directories and Web search engines for other potential bureaux such as local accountancy firms. Remember to decide what level of service you want – just someone to check the data and run the calculations, or a full managed payroll service? The Payroll outsourcing debate article explains some of the differences.