For practices · Key person risk

Your payroll person just resigned. What now?

In a lot of small practices one person runs payroll, and everybody else has a rough idea of how it works. When that person leaves, the practice discovers what it actually knew. This is what to do in the first week, and what to decide in the first month.

Separate the two problems

There is an urgent problem and an important one, and they need different answers. The urgent problem is that payrolls run on fixed dates and those dates do not move. The important problem is that your practice has been carrying a single point of failure, and hiring a replacement recreates it.

Handle the urgent one first, but do not let it make the important decision for you.

The first week

Write down every payroll you run, the pay date, the frequency and the deadline for changes. Most practices have never had this in one place, because the person who left held it.

Then get access. The payroll software login, the HMRC agent credentials, the pension scheme portals and the client contacts. Do this while the person is still at their desk and willing to help, not on their last afternoon.

Then find out what is in flight: starters not yet set up, leavers not yet processed, pension enrolments due, anything mid-correction. This is where the damage usually hides.

Ask the question nobody asks

Ask them to sit for an hour and describe what they do that is not written down anywhere. Not the process. The exceptions. The client who always sends hours late, the one whose director is paid differently, the arrangement somebody agreed in 2019 that nobody has revisited.

That hour is worth more than the handover document, and it is the part most practices skip because they are busy dealing with the resignation.

Now the important decision

You have three routes, and a notice period is a reasonable amount of time to choose between them.

Replace the person. This restores what you had, including the risk. It works if payroll is a real part of your offering and the volume justifies a dedicated role. Be honest about the recruitment timeline against your next pay date.

Absorb it internally. Spread the payrolls across existing staff. This looks cheapest and often is not, because payroll interrupts. It arrives on fixed dates that do not care what else is due that week, and it degrades quietly when the person doing it has a year end to finish.

Keep the clients and stop doing the work. The payroll runs under your brand and somebody else processes it. Your clients see no change. You keep the fee and the relationship, and the key-person risk moves off your practice entirely.

What the third route removes, specifically

Holiday cover. Sickness. The next resignation. The scramble when HMRC changes something in April. And the quiet cost of a senior person doing payroll admin because it has to go out on Friday.

It is not the right answer for every practice. It is the right answer for a practice where payroll was already marginal and the resignation has simply made that visible.

Whatever you decide, fix the underlying thing

The reason this is painful is not the resignation. It is that one person held the whole process. Write the schedule down. Keep the access in a place the practice controls rather than an individual. Record the exceptions.

Do that and the next departure is an inconvenience rather than a crisis, whichever of the three routes you pick.

If you want the third route

We run payroll wholesale for accountancy practices under their own brand. Your clients stay yours, we do not contact them, and the rates are on the partners page. If the notice period is short, say so at the start of the conversation, because the handover order matters more than anything else when a pay date is close.