Written by Richard Rowell
Published on August 25, 2009

Okay, so you think that outsourcing may be a good option for your business. But where do you start.

The best starting point is to look at why a business should outsource any of its activities. The term outsourcing means contracting another other businesses to provide products or services for you. This would usually be where this can be completed more efficiently and economically than you can or in the case of payroll outsourcing as a means of reducing your risk.

Every business already outsources though they may not think about it in those terms. For example, when we buy electricity we are effectively outsourcing electricity production to the Power Companies. Businesses can't afford to produce electricity themselves. Outsourcing it is an obvious way to save time and money and it as a non-core activity.

Is it time you looked at what you are doing in your business and see if payroll outsourcing may be appropriate. For any outsourcing project we recommend you carry out a 3 step appraisal

  1. Draw up a list of everything your business does - eg production, marketing, distribution, invoicing, credit control, etc
  2. Assess how important each activity is to your main objectives which may be the customers' decision to buy, and keep buying, from you.
  3. Consider how good your business is at each of the activities compared to an outsourcing company

Depending on your conclusions consider the following:

  1. Keep doing your core activities since you are good at them and they are fundamental to your success
  2. Outsource the activities that you are not very good at which are not core to your business. You will probably save time and money by letting someone else help.
  3. Acquire the skills you need for the activities that are critical to your business which you do not have or are not particularly good at.

 Payroll outsourcing is a very common step for businesses. Payroll is a self contained, high risk area, that often causes headaches that a payroll company can help you solve. Becoming more complex every year, outsourcing payroll services just makes good business sense.