What Are The Administrative Costs of Running Your Own Back Office?
Running your own back office can hike up the amount of money you are spending on administrative costs.
From a time standpoint, you need to ask yourself what are the key non-revenue focused activities that you or your team are spending time on, that are in place to simply “maintain”, rather than advance the company forward.
What would you do if those administrative tasks could be removed? You could allocate those key staff to tasks that are focused on improving growth-focused areas of the business, such as account management, internal processes/systems, customer service, or enriching company culture.
The real cost of your back office
Many businesses don’t consider reducing spending in their own back office when they have to make cuts, which is often rife with inefficacies and overspending.
For many businesses, it is a case of “this is how things have always been done.” Some business owners may also be unaware of how the back office works, leading them to action costs in areas they are knowledgable in and ‘quick wins’ such as outsourcing.
1. Efficiency
Your back office handles tasks such as payroll, taxes, maintaining records, maintaining compliance with state and federal regulations, and ensuring phone and computer systems are functioning correctly. These operations are essential to running a smooth business but do not generate revenue. In fact, if a member of the back office makes a mistake, which is easily done, this can burn through a staggering amount of revenue.
If your company is still relying on Excel spreadsheets and manual repetitive processes, you may be wasting valuable time and missing out on opportunities for growth.
You should consider outsourcing payroll taxes to experts with automated technology which streamlines back office processes and eliminates human error. Technology is one of the most effective solutions for increasing efficiency, with options to automate invoice verification and arrange and analyze important documentation. Our tech Precision is an example of a technology that can streamline back office processes, check it out here!
2. Time
Consider how much time is spent on menial tasks such as invoicing clients, following up on invoices to clients, following up again on invoices to clients, processing unemployment claims, renewing insurance policies, administering benefits, issuing employment agreements, issuing termination letters, processing payroll, signing checks, and the list goes on and on and on.
Now ask yourself, “is the person(s) performing those tasks capable of doing more within our organization?”
Then ask yourself what is something that you currently don’t have, that you’d implement within your company if you had the resources and time to allocate to it. Most corporate leaders can think of something. Think about that more. If you don’t come up with something brilliant. The point is, there’s a substantial cost to running a back office.
3. Cost
We’re talking more than just salaries or hourly pay spent on administration. There’s also a cost of not maximizing the talent that you have within your organization.
Overall, it’s essential when searching for a CWM partner, that you pay special attention to the administrative processes that a partner will implement, and the impact it will have on your ability to maximize the talent of every team member in your business.
If you would like to learn more about are back office services, or if you think our technology can help your business, get in touch with a member of the PGC team for a demo today!
Disclaimer: All information written here is for general informational purposes only and is not intended to be a substitute for professional and/or legal services.