Mark Paraskeva, CEO of IRIS SME Division
1.8 million, that’s the staggering number of businesses still left to stage for auto enrolment. Although we all must comply with the legislation, most require help to understand the complexity of implementation and the challenge of remaining compliant.
In fact, research conducted by The Pensions Regulator found 61 per cent of small employers and 53 per cent of micro businesses will consult external advisers for help with the introduction of auto enrolment; 52 per cent of micro businesses and 33 per cent of small businesses plan to consult with their accountant specifically.
So with a million businesses potentially rushing to an accountant for help, what can be done to ease the complexity of auto enrolment?
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Time is money
The biggest issue facing accountants and businesses when it comes to auto enrolment is time. The Pensions Regulator found 68 per cent of micro businesses and 69 per cent of small businesses think it will take less than six months to prepare for auto enrolment despite its own recommendation of twice that.
Businesses will face a mad-rush around staging dates when they understand the true complexity of auto enrolment and realise they are not as ready as originally thought. This frantic activity will have a direct impact on the accountant.
It’s estimated that after each SME has staged, auto enrolment upkeep can take up to an hour per week. If an accountant is inundated with a mass of businesses wanting to stage; in addition to using its services after to manage the auto enrolment process; the accountants working hours will soon disappear and impact other areas of the business.
This is why it’s up to the accountant to manage the demand, rather than expecting businesses to think ahead. Accountants should anticipate the auto enrolment rush and plan in advance, ensuring they save time where possible – in turn, auto enrolment won’t impact daily work loads too heavily.
The small changes
It is very difficult for accountants to make big changes to save time. Most processes are tied to compliance; therefore making a large change to save a significant amount of time is unrealistic. However if accountants make small changes to processes, it will have a big impact as auto enrolment develops.
Technology has a vital role to play in this. For instance, currently accountants sending information to NEST need to log-in to upload files in the correct CSV format to the site. This can take up to 4.5 hours each time they run a client’s payroll (as per the CIPP). Therefore if the accountant only has two clients needing to do this, at least a day for each payroll run is dedicated solely to auto enrolment, but as we all know it’s usually far more than that.
That’s why IRIS created a new process within the IRIS AE SuiteTM to combat this issue. The new software will see the file created, formatted and sent to NEST with one click, without having to manually upload the file into their NEST web portal.
This integrated functionality means significant time savings can be achieved by all business and accountants using the service. This time can then be spent adding value to the business and concentrating on what’s most important – business growth and profitability. Payroll providers are now working with some of the main pension providers to integrate web service functionality in an effort to streamline the auto enrolment process; a key development in the roll out of auto enrolment.
This small change in functionality will have a big impact on how much time accountants and businesses spend on auto enrolment. Within the next two years we will see the majority of the 1.8 million businesses left to stage complete this process and move on to simply sharing their information with the pension provider on a regular basis.
The complexity of auto enrolment for accountants and businesses will be eased by the new integration payroll providers, such as IRIS, will have with pension providers. This will enable those businesses and accountants to focus on other areas of their organisation.