With its recent member survey showing the average micro, small and medium-sized employer in 2014 has seen an above inflationary rise of £713 in their annual compliance bill, Jo Eccles, business adviser at the Forum of Private Business, provides some practical advice how to cut your annual compliance bill.
The fact that business costs are on the rise, probably comes as no surprise to most small business owners. External costs accounted most for the increase in the annual compliance bill for small firms, which at 6 per cent is well above the current rate of inflation and twice as much as internal costs. On closer inspection much of these increases were associated with the need to implement Real Time Information (RTI) to existing pay roll provision, following the 12 month extension for small businesses.
And while RTI may now be up and running, it is no time for small firms to sit back and rest on their laurels, as the small firms now focus their attention on the cost of pensions auto-enrolment, which by its very nature is going to be hugely more expensive than RTI to set-up, deliver, and also maintain.
Staying ahead of the changes to rules and regulations is something that cannot be ignored and the consequences and prove even more costly. However, there are a few useful tips to help you save money while staying on the right side of the law.
1. Be prepared (and prepare early)
When it comes to getting ready for law changes, particularly the big ones like auto enrolment, it pays to prepare well in advance. While you cannot escape the inevitable costs that will be involved you can keep these down and reduce the impact on your business if you do your homework and budget carefully.
Getting the right software in place is just one area where you could make real savings, as many major payroll package providers will include updates for big changes such as RTI and auto enrolment as standard.
2. Keep up to date
Surprisingly when questioned, it was time and not money that is the main impact red tape for our members. If staying up to date with the latest changes is the main issue for you, it pays to identify one or two trusted sources of information that will ensure that you are aware of all the law changes and key dates well before they happen.
3. Take advice then act!
With the average employment tribunal costs in the region of £9,000 and health and safety penalty £16,730 it pays to seek advice to ensure to stay on the right side of the law. You should also ensure that whatever source you decide to go with is insured to protect you should the worst happen.
4. It pays to shop around!
Outsourced compliance services are just like any other service you decide to buy in – you can always look for a better deal. Quite often you may find that you can find combined packages that provide employment law, health and safety and contract advice with the extra piece of mind of insurance cover. These could be a lot more cost effective than looking to pay a combination of lawyers and individual consultants.
If you are single handedly running your own business and managing all your legal compliance, then the time may have come to share some of that responsibility with others in your organisation. You may want to appoint a Health and Safety Officer or someone in charge of HR. Delegating doesn’t mean you are no longer responsible, but it could free up some of your valuable time for you to concentrate on what you do business – growing you business.
Remember that business organisations, such as the Forum can provide further advice on this and a whole range of small business issues. For further information visit www.fpb.org