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Payroll errors costing your company? Outsourcing can be the answer

  • Publish Date: Posted 08 December 2015
  • Author: Gina Le Prevost

​With complicated red tape and ever changing government tax legislations, there is considerable pressure on companies to efficiently manage payroll lest they be subjected to substantial financial loss.


A recent survey by PwC highlighted that the world’s biggest companies end up losing between £10m and £30m a year due to payroll errors. The task of effectively executing payroll can be daunting for most companies, especially smaller businesses. Compliance with updated legislation as well as accurate assessment of the employee status is crucial. Furthermore, sophisticated software packages are required to streamline the process and maintain accurate employee records. All this put tremendous pressure on the in-house payroll department of a company, adding to the administrative cost and additional resources.


With more and more companies looking beyond the domestic boundaries for high-skilled professionals, the global nature of the payroll has added to the woes of smaller enterprises. The international nature of the modern workforces means employees’ worth has to be tracked across different tax regimes. PwC anticipates an increase in payroll mistakes and consequent losses as 89% of respondent companies plan to increase their foreign workers intake.


Payroll errors not just affect a business financially but also employee-employer relationship. Employee loyalty is greatly determined by how much he/she is satisfied with the remuneration. Approximately 35% of over 1,000 respondents expressed they would look for a new job if the company failed to pay them correctly, according to a research from Sage UK.


Formulating effective payroll is an integral part of a business, and influences a company’s reputation among existing and prospective employees. Therefore, minimising errors should be the top most priority of companies.


However, most companies fail to evaluate the importance of paying employees correctly until they face the brunt of audits and penalties. Often financial constraints deter companies from devoting due attention to in-house payroll activities. In fact, training staff to specifically deal with payroll functions is not always economically viable for smaller businesses, let alone maintaining an in-house payroll department.


This is where outsourcing can be a prudent business decision. A recent research from the Grant Thornton International Business Report (IBR) revealed that two in five business leaders globally either currently (or plan to) outsource back office functions; of which 36% are most likely to outsource HR and payroll services.


Outsourcing allows office staff to primarily concentrate on the core business areas, whilst leaving the complexities of payroll in charge of a professional payroll provider.
In addition to reducing the administrative burden, outsourcing payroll services significantly cuts down overhead expenditures. There is no need for investing in payroll software or staff training programs. Most importantly, the chances of being penalised for payroll errors are reduced to negligible – as payroll bureaux rely on expert knowledge and latest software to deal with accounting issues and frauds.


The need for strategic support for payroll operations as well as bolstering stronger employee loyalty, is driving companies both SME and large organisations to fully or partially outsource to a third-party vendor. By outsourcing payroll functions, companies can solely focus on activities that directly relate to their expertise, thus boosting productivity and nurturing business growth.


AP Executive 


AP Executive Payroll Services are fully complaint with local legislation relating to employment, social security and income tax. Our services are flexible and can be tailored to suit your business needs.


We offer a part- or fully managed payroll services in Guernsey, Jersey and Cyprus.


Our service includes:


  • Income tax return

  • Social security declarations

  • Other payroll formalities

  • Payment instructions

  • Payroll reviews

  • Management reporting

  • Issuing & posting of pay slips, with breakdowns of salary details


If you are interested to know more about our payroll services, then get in touch with us now:


Guernsey Payroll Services +44 1481 715757
Jersey Payroll Services +44 1534 715757
Cyprus Payroll Services +357 25 056422
Email: info@apgroupglobal.com