The verdict in three sentences
A staffing agency running 1,100 temporary workers on paper timesheets and spreadsheets loses close to a week of admin every month, plus margin on hours that never get billed. Custom temp agency software linking the assignment, the client-approved mobile timesheet, payroll and the invoice costs, as a 2026 order of magnitude, £60,000 to £110,000 in London. At that size the payback is counted in months, provided the pay and charge rules are pinned down first.
Where the close days go in a temp agency
The managing director of an agency in London, supplying warehouses in Park Royal, hospitality in the West End and facilities teams in Canary Wharf, describes the same month every month. Client supervisors sign paper timesheets or send photos. Two consultants key around 900 timesheets into a spreadsheet, recalculate overtime and night premiums, then payroll re-keys everything for PAYE, holiday pay and RTI submissions. Invoicing comes last, with discrepancies nobody can explain anymore.
| Monthly step | Today | With dedicated software |
|---|---|---|
| Timesheet collection | Paper and photos, 2 days | Worker submits on mobile, client approves in one tap |
| Hours and premium checks | Spreadsheet, 1.5 days | Automatic rules per assignment and client rate card |
| Payroll preparation | Full re-keying, 1.5 days | Pay variables generated, export to payroll software |
| RTI, holiday pay, pension | Manual file, 0.5 day | Prepared file, checked before submission |
| Client invoicing | Re-keying, 0.5 day, frequent errors | Invoices generated from approved hours |
| Total close | 6 days | 2 days |
The biggest win is not payroll itself: it is client approval of hours as they happen. An hour approved by the site manager is no longer disputed at invoice time, which cuts credit notes and late payments.
Scope of a UK temp agency system in 2026
A serious project covers six blocks. The assignments module stores the booking, role, pay rate, charge rate and premium rules. The worker app lets temps submit hours, accept shifts, download payslips and update right-to-work documents. The client portal approves timesheets, shows invoices and requests extra staff. Payroll produces pay variables (basic, overtime, nights, weekends, bank holidays, holiday pay accrual) for export. Billing issues one invoice per client and period. The dashboard tracks gross margin per client and branch.
| 2026 option (order of magnitude) | Cost | Timeline | Limits |
|---|---|---|---|
| Spreadsheets and email | £0 licence | Immediate | 6-day close, errors, no audit trail |
| Off-the-shelf staffing platform | £3 to £8 per worker per month | 2 to 3 months | Rigid rate rules, costly customisation |
| Payroll bureau only | £4 to £7 per payslip | 1 month | No assignments, no timesheet approval |
| Custom software | £60,000 to £110,000 | 5 months | Upfront investment, demanding scoping |
| Custom software maintenance | 15 to 20% of build per year | Ongoing | Budget it from day one |
| Hosting and SMS | £300 to £900 per month | Ongoing | Depends on notification volume |
At 1,100 workers, a platform at £6 per head already means £79,200 over 12 months, recurring, with rate rules that rarely match your client contracts. That arithmetic is what moves agencies of this size towards custom software.
Rules to freeze before writing code
Success depends on scoping. Write down the charge rate and premium rules per client, because many supply agreements go beyond statutory minimums. Decide who approves what: the client supervisor, the branch manager, or both above an overtime threshold. Build in Agency Workers Regulations checks (the 12-week qualifying period for equal treatment) and right-to-work document expiry alerts. Worker data (National Insurance numbers, bank details, ID scans) falls under UK GDPR: encryption, access logs and documented hosting belong in the specification. Plan the migration: 12 months of assignments and payslips is usually enough.
A typical 5-month plan: 3 weeks of scoping, 2 months for assignments, timesheets and portals, 6 weeks for payroll export and billing, then one month of parallel running on a full pay cycle.
Mini case study
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Sarah, managing director of a temp agency in London, runs the numbers. Two consultants and a payroll officer spend 6 days a month on close, about 18 person-days. With the software, 2 days for three people remain, 6 person-days: 12 person-days saved per month, 144 a year. At a loaded cost of £260 a day, that is £37,440 a year. She adds unbilled hours found in an audit: 1.2% of £6,500,000 turnover, £78,000. Total: about £115,440 of annual gain for an £85,000 build and £15,000 yearly maintenance. Payback comes in roughly 9 months.
FAQ
How much does custom temp agency software cost in London in 2026?
As a 2026 order of magnitude, £60,000 to £110,000 depending on the blocks (assignments, portals, payroll export, billing) and data migration. Maintenance then runs at 15 to 20% of the build per year.
Can the software run payroll and RTI directly?
It produces pay variables and prepares the payroll export; most agencies keep their existing payroll engine or bureau and connect it, which reduces project risk and 20 to 30% of the budget.
Will temps really submit hours on their phones?
Yes if the app is simple: submission in under 30 seconds and payslips available in the same place. Agencies that put payslips only in the app often reach 85 to 90% adoption within 2 months.
How long does the project take?
Five months for an agency with 1,000 workers, including one month of parallel running. A scope limited to assignments and timesheets can go live in 10 weeks.
Who owns the code and the data?
In a custom project the agency owns the code and the data, hosted in a known UK or EU region, which helps with UK GDPR and client security questionnaires.
Let's scope your project. We map your assignments, timesheet approval, payroll export and billing into a realistic phased plan. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.