

Powerful Ways IMS Decimal Transforms UK Umbrella Companies’ Payroll Function
October 16, 2024
IMS Decimal Updates, Outsourced Accounting and Finance Services
Umbrella companies have become a crucial link in the UK’s contracting ecosystem, providing payroll solutions for contractors, while ensuring tax compliance. With the global business process outsourcing market expected to reach US$ 525 billion by 2030, outsourcing payroll is more important than ever.
However, companies encounter several challenges that can hinder their efficiency and profitability. Fortunately, outsourced payroll services through IMS Decimal offer powerful back-office accounting and payroll solutions to address these pain points. By leveraging our outsourced payroll services, umbrella companies can not only improve operational efficiency, but also ensure long-term sustainability and compliance in an increasingly competitive market.
Let us explore the top five challenges faced by umbrella companies, and how outsourcing accounting services from IMS Decimal can help overcome them efficiently.
1. Complex Payroll Processing
Payroll processing becomes complicated when handling the payroll for several contractors, each with distinct pay rates, tax codes, and employment arrangements. In addition to adhering to HMRC laws, umbrella firms must also account for factors like holiday pay, pension plans, and National Insurance contributions.
Solution by IMS Decimal:
We automate payroll calculations, ensuring that contributions and deductions are processed accurately. Our system updates automatically with HMRC regulation changes, helping businesses avoid manual errors, and maintain compliance effortlessly. According to a study conducted by Outlook, 81% of bookkeepers who outsourced payroll services saw a revenue spike of 5-40%, proving the financial benefits of efficient payroll outsourcing.
2. Compliance with Ever-Changing Tax Regulations
One of the major challenges for umbrella firms is staying updated with the latest tax legislation and HMRC requirements. Failure to comply can lead to penalties, fines, and damage to the firm’s reputation.
Solution by IMS Decimal:
We offer built-in compliance tools, ensuring that all payroll and tax calculations meet the latest HMRC requirements. Our platform automatically updates with new tax regulations, eliminating the need for manual intervention. Outsourcing accounting services to specialised providers like IMS Decimal are increasingly becoming essential for firms that want to stay compliant and efficient.
3. Contractor Retention and Satisfaction
Maintaining contractor satisfaction hinges on ensuring timely and accurate payments. Payment delays, unclear deductions, or complicated pay stubs can lead to dissatisfaction, and negatively impact contractor retention.
Solution by IMS Decimal:
Our outsourced payroll services ensure accurate, timely payroll processing, with transparent payslips that clearly outline all deductions and contributions. This builds trust between umbrella companies and their contractors, improving retention rates. Furthermore, outsourcing payroll services provides businesses with increased flexibility, allowing them to respond quickly to contractor needs, as highlighted by SD Worx, which mentions enhanced flexibility and cost savings as benefits of payroll outsourcing.
4. Administrative Workload
Handling payroll in-house adds to the administrative burden for umbrella companies. Tasks such as invoicing , expense management, and tax submissions, when managed manually can often lead to inefficiencies and costly errors.
Solution by IMS Decimal:
We reduce the administrative workload by offering a comprehensive solution that manages payroll, invoicing, and expenses all in one system. This allows umbrella companies to focus on growing their business, while we take care of the financial and operational details. As the trend towards outsourced payroll services grows, it is important to note that 60% of finance and accounting outsourcing contracts won’t be renewed by 2025, emphasising the need for more tailored and efficient solutions like ours.
5. High Operational Costs
Running an in-house payroll department is not only time-consuming, but also expensive. The cost of maintaining software, ensuring compliance, and hiring skilled staff can strain umbrella companies, especially those working with smaller margins.
Solution by IMS Decimal:
Our outsourcing payroll services significantly reduces operational costs. By automating key processes and offering scalable solutions, we enable umbrella companies to cut down on expenses related to payroll management, while ensuring high service quality. According to Outlook, outsourced payroll services offer businesses substantial cost savings and efficiency improvements.
Conclusion
Umbrella companies encounter numerous challenges, from managing complex payroll processes to staying compliant with ever-changing tax regulations. However, with a trusted partner like IMS Decimal, these obstacles can be managed effectively. By automating payroll processes, ensuring full compliance, and lowering operational costs, IMS Decimal’s outsourced payroll services empower umbrella companies to focus on what they do best: supporting their contractors and driving business growth.