“Outdated” software is costing accountancy firms £184m in unnecessary payroll costs, claims new research from Paycircle.
It found that the majority of small practices were continuing to use software that requires manual input for ‘no-change’ payrolls.
The cost of manually processing the payrolls, which typically require little or no change between periods, is amounting to costs of over £15m a month, or £184m a year.
The research was based on data provided by UK payroll bureaus. These bureaus reported it took an average of 18 minutes to process each no change payroll.
The company said factoring in the total cost of payroll employees, based on average salary and overheads, as well as the process time for payroll, these “unnecessary” costs were incurred.
Paycircle compiled this research on the assumption that 75% of the 2.1m UK companies employing one to four people have their payroll processed manually by accountants.
Catherine Pinkney, co-founder of Paycircle, said: “While this research highlights the vast sums of money being spent unnecessarily on payrolls that can be automated, more importantly it underlines the opportunity for accountancy practices and payroll bureaus to significantly drive down costs and therefore boost profits.
“Unfortunately, a lack of awareness means the industry as a whole continues to use legacy software that requires manual input for even the simplest payrolls – and as our research shows, the cost of doing so very quickly adds up.”