What to look for in a payroll bureau, from an accountant's side
Most advice on choosing a payroll bureau is written for a business owner picking a provider for their own staff. A practice is asking something else. You're putting a client's payroll through somebody else's hands, and when it goes wrong the client rings you, not them. These are the questions worth asking before the first client moves, and a few of them are ones a bureau would honestly rather you skipped.
How to read the answers. You don't need a perfect answer to every question. You need a clear one. A vague reply to something in the last section tells you more than a smooth reply to anything in the first.
Start with who actually does the work
Who will run our clients' payroll, and who covers when they're off?
A named contact matters. The second name matters more. Plenty of small bureaux are one capable person with good software, which is precisely the risk a lot of practices are trying to move out of their own office. Ask what happens on a payday when that person is ill, and whether the backup has ever actually run one of the payrolls or has only been told where the files are. If you've been through this yourself, when your payroll person resigns covers the same risk from the inside.
How long have you done this for practices, and for how many?
We'd rather not be asked this one, as a young firm, which is exactly why it's here. A newer bureau will have a short answer. Listen for whether it gives you that answer straight, and then shows you what stands in for a long track record: a written process, a second check on every run before it leaves, and a way for you to see the work rather than take it on trust.
What won't you take on?
A bureau that says yes to everything, subcontractors under CIS, directors on irregular pay, employees of overseas companies, is either very large or not being straight with itself. A short, specific list of what they turn away is a good sign. It means they know where their edges are before one of your clients finds them.
Then the mechanics of an ordinary month
None of these are trick questions, and a bureau that runs a tidy operation will answer all of them in one call. The right-hand column is not a reason to walk away on its own. It's a reason to ask again.
| Ask | A clear answer sounds like | Ask again if you hear |
|---|---|---|
| What's the cut-off for changes, and what happens when a client misses it? | A fixed day before payday, and a stated route for anything late | “We're flexible”, with no day named |
| Who approves the run before anything reaches HMRC or a bank? | Nothing is filed or paid until you, or the client, sign it off | Silence is treated as approval |
| Who submits the FPS, and under whose authorisation? | A plain answer on whose access is used and who holds the login | Uncertainty about whose credentials file the return |
| Who handles pension contributions and re-enrolment? | Monthly submissions included, and the three-yearly re-enrolment already diarised per client | “Pensions are on the client's side” |
| What exactly does the fee include? | A written list, with starters, leavers, year end and corrections each marked in or out | One figure, with the extras discovered on the first invoice |
| Can we see an anonymised payslip and run report? | Yes, today | Not until you've signed |
Two of those deserve a line more. The FPS has to reach HMRC on or before the day employees are paid, so whoever submits it is carrying a deadline every single payday, and it's worth knowing whose name that deadline sits under. The RTI explainer sets out what goes in it. And re-enrolment is the pension duty that catches practices out, because it only comes round every three years: The Pensions Regulator expects eligible staff who have left the scheme to be put back in, and a re-declaration of compliance to be completed whether or not anybody needed re-enrolling. A bureau that mentions it without being prompted has usually done one.
The questions a bureau would rather you didn't ask
When you get it wrong, who pays to put it right?
Every payroll has an error in it eventually. What you want in writing is who corrects it, how quickly, and who carries the cost of a penalty or interest that flows from the bureau's own mistake, as opposed to a late or wrong instruction from the client. Read the terms rather than accepting a reassuring sentence on a call. How that risk ought to be split is a contractual question for your own advisers, and we're not going to pretend a blog post settles it.
What does your professional indemnity cover actually respond to?
“Are you insured?” gets a yes from everybody. The better question is narrower: what is the limit, and does the policy respond when the person who suffers the loss is your client, who has no contract with the bureau at all? That's a question a bureau has to put to its own insurer to answer properly, so a considered reply, even a slow one, is worth more than a quick one.
How do we leave?
This is the real fear underneath most hesitation about outsourcing, so ask it before you start rather than when you want out. You're looking for a stated notice period and a promise, in the agreement, that the year-to-date figures, the RTI submission history and the pension records come back to you in a form another system can load. How white-label payroll works goes through the client-relationship side of the same question.
Where does our clients' data sit, and who else touches it?
Payroll data is about as personal as client data gets: salaries, bank details, National Insurance numbers, sickness. UK GDPR requires a written contract where one organisation processes personal data on behalf of another, so the chain from your client, through your practice, to the bureau and on to its software provider should be on paper. Ask where the data is stored, who the sub-processors are, and what happens to the data when the arrangement ends.
An illustration
This one is invented. A three-partner practice in Carlisle carries twenty-two payroll clients, all run by one long-serving senior who has mentioned retiring. It talks to two bureaux. The first answers everything in the table on a single call and sends a sample run report that afternoon. The second comes in cheaper, but can't say whose authorisation its submissions go under and describes corrections as “case by case”. The partners pick the first. The lower quote wasn't the cheaper option once they'd priced in what they couldn't find out.
Where we fit
We run payroll wholesale for UK practices, either on referral or under your own brand. Put every question on this page to us. The ones we'd rather not be asked are on it for that reason. The rates and what's included are on the partners page.
Read next
- In-house or refer it out, the decision that comes before choosing anyone.
- Payroll is the loss leader in most small practices, the arithmetic behind that decision.
- White-label payroll explained, what your client sees and what they don't.
- Wholesale payroll for practices, how working with us is set up.
This page is general information, not legal, tax, insurance or data protection advice. Contract terms, insurance and data arrangements differ from one firm to the next, so please check your own position or take advice before relying on anything here.