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Embrace auto enrolment to increase profits
- 1. Paul Byrne: Embrace Auto Enrolment to Increase Profits Patrick McLoughlin: Using Auto Enrolment to Attract your Ideal Clients The webinar will begin shortly...
- 2. Paul Byrne Managing Director BrightPay Embrace Auto Enrolment to Increase Profits
- 3. Patrick McLoughlin Owner Accounting for Growth Using Auto Enrolment to Attract your Ideal Clients
- 4. Q&A Session Questions Tab or #BPWebinars Competition Two BrightPay bureau 2015/16 licences Q&A WIN
- 5. Embrace Auto Enrolment to Increase Profits
- 6. Paul Byrne • Accountancy Practice for 20 Years • Set up own company • BrightPay Background • 65,000 customers – UK & Ireland
- 7. Agenda • Auto Enrolment Summary • Be Proactive - Communicate to your Clients • Automate AE tasks • Beware of Hidden Charges • Timing & Tax Year • BrightPay’s Key Take Away’s
- 9. Auto Enrolment • Government initiative – Save for later life • All employers required to offer a workplace pension scheme to eligible workers
- 10. Small Employers • 1.2 million small & micro Employers set to stage from June 2015 • Majority of employers will not have the knowledge or experience to make informed decisions • Information overload - Confused, bewildered and overwhelmed
- 11. Small Employers • First experience to review any kind of pension scheme for their employees • Lack the capacity and ability to handle additional payroll tasks • Implementing any new system can be a daunting, nerve-racking and downright scary experience
- 12. Staging Date Awareness Awareness Accuracy Smaller Medium 97% 83% Small Employers 81% 43% Micro Employers 51% 28% Look up clients staging dates with The Pensions Regulator
- 14. Be Proactive • Payroll bureaus must predict the evolutionary need of their clients • Establish yourself as a proactive rather than a reactive AE advisor • Necessary level of service for an initial set up fee plus a monthly retainer
- 15. Communicate the Changes • Huge potential for accountants, bookkeepers and payroll bureaus • Short window of opportunity to position themselves as open for business • Communicate with clients that you are open for business
- 16. Open for Business • Outsource to you because you have the know-how and it saves them time and money • Trusting you as a payroll professional to make sure they are fully AE compliant with the law • Open to the idea of outsourcing AE for a chargeable fee
- 18. Auto Enrolment Tasks 1. Set up a Pension Scheme 2. Staging date – Assess the workforce 3. Communications 4. Declaration of Compliance 5. Ongoing Duties
- 19. Software Solutions • Average 33 administrative tasks • Automate the majority of these AE processes • Combined payroll and auto enrolment solution • Greater efficiency, increased value, improved cost savings
- 20. Automate AE Tasks • Check with payroll software provider to see how it handles AE requirements • Consider an alternative software package that will integrate the required tasks into payroll software • Allow you to streamline AE processes and increase the turnover of payroll clients
- 21. Does Your Payroll Software... 1. Assesses your workforce? 2. Allows the use of postponement? 3. Automate employee communications? 4. Calculate pension contributions? 5. Handles opt-in and joining?
- 22. Does Your Payroll Software... 6. Handle opt outs and refunds? 7. Notify you when actions need to be taken? 8. Keep records and provide reports? 9. Integrates with some or all pension scheme provider systems?
- 23. Beware of Hidden Charges
- 24. AE Functionality • Choose payroll software that is specifically tailored to auto enrolment • Make sure your software supports AE – test it’s functionality ahead of staging date • Consider an alternative software package to perform required AE tasks
- 25. Beware of Hidden Costs • Beware of hidden costs • Some charge for AE functionality, support, and additional employees • Know all the charges that may apply to you
- 26. Timing and Tax Year
- 27. Software Solutions • If you are changing payroll software, it is advised to make the change from the start of the payroll year • Avoid any of the complications of a mid-year change of software • Staging January – March 2016: ensure Auto Enrolment functionality now to avoid switching mid-year
- 28. Payroll Solutions • Modern innovative solutions exist that can automate Auto Enrolment duties • Enter staging date to assess each employee’s eligibility for Auto Enrolment • Employee AE communications based on each employee’s individual eligibility
- 29. BrightPay & Auto Enrolment • BrightPay – an easy to use AE solution • Everything you need to provide a profitable AE service to your clients • Empower bureaus to improve profit margins and increase the turnaround of these clients • Designed to take the grunt work out of Auto Enrolment
- 30. BrightPay Payroll Software Unlimited Employers Unlimited Employees Free Support 60 Day Free Trial
- 51. BrightPay’s Key Take Away’s..
- 53. Patrick McLoughlin Owner at Accounting for Growth
- 54. 25th March - Register Now • Paul Byrne: Essential Questions to ask you Payroll Software Provider • Darren Critten: Auto Enrolment - Collaboration is the key to Success! BrightPay Webinar Series
- 55. Useful links and resources • TPR – www.thepensionsregulator.gov.uk/ • NEST – http://www.nestpensions.org.uk/ • AccountingWeb – www.accountingweb.co.uk/ • BrightPay free trial – www.brightpay.co.uk/try/ • Auto Enrolment for Dummies http://bitly.com/1AhNPjX • TPR: What happens if I don't comply • TPR: Find out client's staging dates • TPR: Detailed Guidance
- 56. Follow BrightPay on Twitter: @BrightPay UK #BPWebinars
- 57. Questions & Answers For more information see: www.brightpay.co.uk Or phone: 0845 3004 304
Editor's Notes
- Hi there to those of you who have joined us in the past few minutes. We’re just waiting for a few more attendees to join us before we start. We will be starting at precisely 10.05 so just hold on for a few more minutes.
- Paul Byrne is managing director of BrightPay. Paul is also a chartered accountant having previously spent 20 years in practice. Paul will give his fairly unique insight into what auto enrolment will mean for accountants and other payroll bureaus, along with his thoughts on how to capitalise on this new business opportunity.
- I am delighted to announce that we have a free competition today. There are two BrightPay bureau licences up for grabs. All attendees who stay for the entire webinar will be entered in a free competition to win a free Bureau Licence. We have two 15/16 BrightPay licences to give away. 2 Attendees will be chosen at random and the winners’ details will be emailed to all attendees.
- We will now begin the webinar. I would like to introduce Paul Byrne, who is managing director here at BrightPay. Enjoy
- Hi Everyone and thanks for joining us today. Just a small bit about myself to start off. My background is as a practising accountant. I started my own practice back in the 80s and eventually grew it to a 3 partner practice with 10 staff before doing something completely different and moving into software development full time. While in practice, I provided payroll bureau services for about 30 clients so I have some idea what it is like in the front line. A large part of my motivation in getting into payroll software development was make better software than what I was using at the time. Although, I can’t claim full credit for BrightPay which is written by someone younger and better than I (my fellow director Ross Webster). So far, the company has grown to 65,000 employers across the UK and Ireland, a figure that we are improving on every year.
- So, here is the agenda for my slot today which I hope you will find informative and give you plenty of food for thought. When talking I will probably refer to Auto Enrolment or Automatic Enrolment simply as AE. If any of you have attended any of our previous webinars, I am sorry if my slot contains a fair deal of repetition. This is unavoidable but at least Patrick’s segment will be fresh and new to you.
- OK, a quick recap on what AE means and just to note that this is only a summary. AE is a vast and complex subject. It would take days (even weeks) to cover the subject properly. At the end of the day, you do not need to have an in depth knowledge of AE. It is up to your pension provider and payroll software provider to filter out all the noise for you. Having said that, I recently posted an article to AccountingWeb with the irreverent title of “Auto enrolment for dummies” and I think that this contains all you may need to know when talking about AE to your clients. It’s a 10 minute read and we’ll send you the link to it in the Useful Links section.
- So, in short, AE is a Government initiative to help more people save for later life through a pension scheme at work. AE is being rolled out in stages across all employers, and started with the larger employers in October 2012. By October 2018 all employers will be required to offer workplace pension schemes to eligible workers. You will see from the slide that January 2016 is when the small and micro employers start to stage. This is the start of the so called tsunami and things will definitely get very interesting from there on. A lot of the companies staging before now will probably have had their own HR people to help them through the enrolment process. The vast majority of those staging from January 2016 will have no in house expertise and will more than likely turn to you for help. So, you have a gift wrapped business opportunity! And this is business you don’t have to go chasing. Considering the various other changes you guys have had to cope with over the last number of years, for example RTI, FRS102 and iXbrl, AE is a change that you should actually be able to profit from and one that should not require any investment in time or systems. I know one accountant I was talking to felt that AE might make up from his potential loss of income with annual tax returns no longer being required.
- A massive 1.2m small and micro businesses are set to start staging from June 2015. Payroll advisors are more than aware that the majority of these employers will have neither the knowledge or experience to make informed decisions when it comes to their AE obligations. With a vast quantity of information available, employers are fast becoming confused, bewildered and overwhelmed as to what their responsibilities for AE actually are.
- For the majority of these employers this will be their first experience to review any kind of pension scheme for their employees. The fact also remains that many employers lack the capacity and ability to handle these additional payroll tasks. For many employers, implementing any new system can be a daunting, nerve-racking and downright scary experience to grasp.
- Almost all smaller medium employers (97%) and four fifths of small employers (81%) said they were aware of their staging date, compared with only a half of micro employers (51%). When we compared employers’ actual staging dates with what they believed it to be, we found that 83% of smaller medium employers gave a date which matched the one in the regulator’s records. Accuracy was poorer among small employers and micro employers. Accountants also tend to have a low level of staging date awareness with just 1 in 4 accountants aware that you can look up clients staging dates on The Pensions Regulator’s website.
- Payroll bureaus that want to succeed in this competitive industry will need to predict the evolutionary needs of their clients. You need to establish yourself as a proactive rather that a reactive AE advisor. Bureaus will naturally increase their income by providing this service in exchange for an initial set up fee plus a monthly retainer to manage the on-going AE duties or an increased price per payslip. One customer told me that for a 15 employee client, he charged £400 for the staging and upped the price per payslip from £1 to £1.50 to cover on-going duties. And the best thing of all was that his client was happy with this level of fees.
- With the high levels of employers set to enrol in the coming year, there is huge potential for accountants, bookkeepers and payroll bureaus to gain new clients, and to increase fees with existing clients. Bureaus have a relatively short window of opportunity to position themselves as open for business in this ever increasing cluttered space. It is vital that you are proactive and communicate with your clients that you are open for AE business. Be aware, that if you decide not to process AE, there is a risk that you will lose some or all of your payroll clients.
- Employers outsource their payroll processes to you because you have the know-how and it saves them time and money. Today, with AE, it is not only about cutting costs for employers but trusting you as a payroll professional to make sure they are fully AE compliant. Furthermore, some employers may not have the competency, time or know-how to handle AE. Once employers have confidence in your knowledge and ability they should be open to the idea of outsourcing these AE tasks to you for a chargeable fee.
- With AE comes a number of employer responsibilities: Employers must set up a Pension Scheme with a qualifying pension provider. Next, employers must assess their workforce at their Staging date and enrol all eligible jobholders, unless they are using postponement. A small note here on postponement is that say an employer decides to postpone for the maximum of 3 months, it is essential that they issue the necessary letters or emails to their employees informing them of the postponement within 6 weeks of the staging date. Some employers believe that postponement means not having to do anything during the deferral period. This is incorrect and could lead them needed to backdate AE back to their staging dates. Employers must also pass on the necessary communications to all employees, not just those who are automatically enrolled. 5 months after their staging date, employers must complete a Declaration of Compliance to notify the Pensions Regulator that they have complied with AE. There are also a number of on-going employer responsibilities such as handling opt outs (and opt ins), making deductions and contributions, monitoring employees each pay period, and sending a contribution file to the pension provider.
- There are over 30 administrative tasks to perform in relation to AE. TPR advises bureaus to automate the majority of these AE processes, such as monitoring your client's staff ages, earnings and deducting pension contributions. Software solutions can automate employer responsibilities, which reduces the time spent on these tasks With a combined payroll and AE solution in place, bureaus will benefit from greater efficiency, increased value added and improved cost savings.
- It is important to check with your payroll software provider to establish how it handles automatic enrolment. If it won't be ready before your clients staging date, or the functionality isn't going to be made available in time, you may wish to consider an alternative software package that will integrate the required tasks into your payroll software. Appropriate software will allow you to streamline AE processes and increase the turnover of payroll clients.
- You need to find out if your software can identify whether you have employees that you will need to automatically enrol. If you don’t have access to the necessary software, you will need to get it. When speaking to your existing software provider or selecting new software, you should ask whether the system: 1. assesses your workforce 2. allows the use of postponement 3. automates employee communications 4. calculates pension contributions 5. handles opt-ins and joinings
- 6. handles opt outs and refunds 7. Notifies you when actions need to be taken 8. keeps records and provide reports 9. integrates with some or all pension scheme provider systems. If you are selecting new software you should ensure that it is compatible with your existing systems.
- TPR recommends that employers and bureaus choose Payroll software which is specifically tailored to automatic enrolment. Payroll software that can automate these employer admin tasks will be vital to improving profits. You should test your chosen payroll software well ahead of your staging date to make sure it has full AE functionality. Bureaus obviously have the option to consider an alternative software package that has AE features included.
- If you are changing your payroll software provider beware of hidden costs that they may charge. With some payroll software providers, you may have to pay additional costs for AE functionality, support, and additional employees. Make sure you know of any additional costs that you may be faced with throughout the year.
- Whatever payroll software solution you choose, if you are changing payroll software, it is advisable to make the change from the start of the payroll year. This avoids any of the complications of a mid-year change that may arise e.g. importing cumulatives, ensuring RTI fields are correct, etc. 110,000 employers will reach their staging date in the January – March 2016 quarter, falling within the 2015/16 tax year. These employers are urged to ensure AE functionality now so as to avoid having to switch later in the year, which could cause mid year complications. Obviously postponement could help with some of these but just beware of the requirement to issue postponement communications.
- Fortunately, modern innovative solutions exist that can automate AE chores. Armed with the employer staging date, bureaus can now simply enter this date and the software will assess each employee’s eligibility for AE at the staging date. Good payroll software will further handle all employee AE communications based on each employee’s individual eligibility.
- So, now for the shameless plug! BrightPay is an easy to use payroll and AE solution that can do everything you need to provide a profitable AE service to your clients. The software has been designed to take all of the grunt work out of AE. With BrightPay, AE is easy. It makes the AE process effortless and uncomplicated for small business owners and bureaus alike.
- With BrightPay you can benefit from unlimited employers, unlimited employees, free phone and email support, all for just £199 plus vat per annum. You can also benefit from a 60 day free trial which has no limitations to the software.
- I would now like to hand you over to Rachel for a two minute talk showing you just how easy AE can be. In this example we are assuming that the employer (or you on their behalf) has already registered with a pension provider, in this case NEST. Registering with NEST should take only 30 minutes on average to complete. I imagine that a lot of small employers will choose NEST because it is government backed and has a mandate to accept all employers irrespective of their size. Having said that, BrightPay will also accommodate The People’s Pension, NOW: Pensions, Scottish Widows, all of which are great schemes, and this list is constantly being added to. Thank you Rachel.
- Here are BrightPay’s 5 key take away’s for you today...
- Automation – By automating the AE tasks, bureaus can reduce overheads per client, increase staff efficiency and increase bureau profits. Functionality – Ensure your solution has everything to prepare your clients for Auto Enrolment. Hidden Costs – Check to see if there are any hidden charges when it comes to the number of employees, employers and the level of support that is provided. Beware of exorbitant hidden costs. Timing – Try to implement whatever solution you adopt from the start of a tax year. Communication – Be proactive by educating and communicating directly with your clients about what is involved for them and what you can do for them.
- Before I pass you over to Patrick McLoughlin if you did have any questions in relation to BrightPay and AE please type them into the chat bar now so we can get through as many questions as we can in the Q & A session. I'm delighted to pass you over to Patrick McLoughlin who will present “Using Auto Enrolment to attract your Ideal Clients”
- The webinar series will run until 25th March and include a number of guest speakers from the accounting and payroll industry.
- The webinar series will run until 25th March and include a number of guest speakers from the accounting and payroll industry.