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Legacy payroll systems costs industry £15m monthly

Legacy software is costing the payroll industry an unnecessary £184m annually, new research finds. 

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"A lack of awareness means the industry as a whole continues to use legacy software"
"A lack of awareness means the industry as a whole continues to use legacy software"

Cloud-based payroll provider Paycircle said accountancy practices and bureaus are spending just over £15m each month, unnecessarily, on small company payrolls.

 

The company said the costs mentioned are the costs incurred for accountants and bureaus to manually process the payrolls of an estimated three quarters of the UK’s 2.1 million companies employing one to four people. Paycircle said these are payrolls that typically require very little or no change from one period to the next.

 

The research is based on detailed data provided by UK payroll bureaus, which average 18 minutes to process each no change, or ‘straight-run’, payroll. It then factors in the total cost of payroll employees, based on average salary and overheads.

 

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.”

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