Growing companies are often faced with major challenges when it comes to payroll. Payroll is often a company’s most significant expense, and it is tough to administer due to strict compliance rules. Running payroll in-house has traditionally been an expensive, friction-filled undertaking for time-strapped HR and finance teams at fast-growing early-stage companies, and outsourcing offers them a good solution.
However, payroll outsourcing has its drawbacks. A lack of control, inflexibility, and poor communication are rife. In fairness to outsourcing providers, most of these issues arise due to the highly manual nature of most payroll workflows.
However, one company is leading the charge in transforming how companies think of payroll in the UK. As an innovative software provider, Pento aims to modernise payroll workflows and offer companies a more robust solution than outsourcing. With a lower price tag and powerful integrations that make automated processes more reliable, Pento effectively empowers in-house teams to handle their own payroll.
“As businesses grow in size, they often grow in complexity,” explains Sabrina Castiglione, Chief Operating Officer of Pento. “The time spent manually working and resolving inaccuracies of granular payroll journal dividends can be repurposed for diving into and sharing financial insights. Forced deadlines, redundant duplication, and unhelpful urgency distracts them from what matters most – their business and their people.”
More Payroll Efficiency
New solution providers often toss the word “efficiency” around when attempting to disrupt their categories. However, within payroll management, potential efficiency gains are easy to pinpoint, and this makes Pento’s task easier. Not to imply that automating payroll is easy, though.
Take calculating salary and tax deductions, for instance. Complex and evolving regulations govern these tasks, and payroll professionals must draw data from different sources before completing them. Sourcing different datasets is challenging, even for an electronic solution.
Pento achieves this by integrating with human resource information systems (HRIS) like CharlieHR, Bamboo and Hibob. These integrations also helps the platform automate routine tasks like gathering relevant information quickly when onboarding employees, sending payslips, and sending P45s when employees leave the company.
Compare this to outsourced payroll vendors manually calculating tax information and compensation while dealing with changes from the firms they serve, and the benefits are apparent. Another obvious advantage is eliminating human errors that arise from time to time with outsourced payroll solutions.
Pento’s software centralises relevant information, allowing in-house teams to pull in all the details they need instantly, with the flexibility to change information right before filing deadlines. The software also simplifies compliance by syncing with HMRC, which means all employees’ National Insurance (NI), student loan, and tax code information are automatically updated.
Finally, Pento even auto-enrols eligible employees in pension schemes, eliminating tedious tasks in that process.
Full Control and Customisation
Every company needs a custom compensation policy to attract and retain top-tier talent. “Will you be at the 100th percentile, and beat out any competitors, or stick to the 50th percentile and market rates?” asks Castiglione. “You’ll also need to decide what your mix will be between equity vs. cash vs. benefits, and whether or not you’ll seek to globalise or localise salaries. Your philosophy from step 1 should help you decide this.”
While customisation of this kind helps attract the best talent, it also has the potential to create payroll nightmares. Outsourced vendors relying on legacy tech and manual processes cannot keep pace with these needs, leading to an odd situation where payroll infrastructure informs compensation policies.
Without access to real-time payroll data, companies cannot offer creative compensation or readily respond to prospective employees’ requests. When using accounting bureaus, payroll reports generally arrive at the end of the month, pushing critical tasks like headcount planning and budgeting past this point.
Deviating from standard schedules is also harder when outsourcing. “Through talking to our customers,” says Pento’s Harshita Kumbhar, “we discovered that many teams want more flexibility and control over their payroll. For example, some companies pay employees early in January and February too, to avoid a long gap between pay dates and support employee cash flow. Doing this with a payroll outsourcing provider would mean more early deadlines, additional fees, and even contractual changes.”
Pento offers employers complete control while maintaining the flexibility to create custom packages. Kumbhar explains how simple this is. “By changing pay dates in Pento, our customers can save time, get more flexibility on their payroll, and support their employees in need.”
Expert Support And Instant ROI
One of the drawbacks of outsourced payroll providers is the degree of support. While service providers offer CIPP-qualified staff to assist with complex inquiries, these personnel are often reserved for higher-paying customers.
As a result, lower-tier customers find that their issues stretch for days and engage in constant back-and-forth.
Pento solves this problem by offering fast, multi-channel support. For complex issues, the platform offers CIPP-qualified expert support and advice to all customers. A self-service help centre also guides users through common issues, irrespective of their expertise or technical skills.
The platform takes data privacy laws seriously and is fully compliant with HMRC standards. Customers own all their data and Pento’s platform is GDPR compliant. This experience is an upgrade to the average outsourcing provider’s workflow, where stakeholders exchange sensitive files over email or file sharing platforms, potentially never coming close to the level of data security provisions a software vendor has in place.
Payroll Needs a Makeover
Outsourced payroll providers offered a valuable solution in a time when legacy tech was the best choice available. However, given the extent of today’s technological advances, companies have few reasons to not automate their payroll workflows and remove compensation as a roadblock when trying to attract top talent.
With solutions like Pento around, companies in the UK can rest assured their payroll is in good hands.