Payroll processing is both a time-consuming and painstaking activity for your staffing agency’s team. As you’re looking to grow your staffing agency, you might begin to consider whether it makes more sense for you to keep it in-house or outsource payroll processing so that you can focus on ramping up your recruiting and sales efforts. To help you decide, here are some key criteria to consider when evaluating whether to outsource payroll processing services:
1. Do you have a plan for payroll processing when you experience staff turnover or have employees that take sick/leave time?
If your payroll processing is in-house, then you need to have a backup plan in place to handle times when your staff take vacation or give their resignation. Do you have the staff resources to make sure payroll processing is covered when staff turnover occurs? Without an effective backup plan in place, it might be time to consider outsourcing this capability to an outside firm that has a team that can provide the necessary coverage.
2. What percentage of your staff’s time is devoted to accounts receivable/collections processes?
Is your staff constantly spending time tracking down slow-paying debtors? To evaluate this question, start by deciding the percentage of time your staff should be spending on accounts receivable. Then assess your current processes to see if that percentage is significantly higher than your target goal. It might be time to outsource this function to a payroll processing team if you find that it’s demanding too much valuable time.
3. Can your team stay up-to-date with changes in compliance and regulations for payroll processing and payroll taxes?
Regulations for compliance are constantly changing. Does your staff have the time to make sure they’re making updates to your payroll system to stay in compliance? Again, start by figuring out how much time you’d like your staff to be spending on payroll processing and payroll tax compliance and then see how much time it actually If your team isn’t meeting this goal, then it might be time to seek third-party services to help.
4. Consider your business plan for the next year. Where do you want to allocate your resources: Revenue-generating sales and recruiting functions or back office functions?
The ultimate decision that you should consider is where you want to allocate your valuable (and finite) resources to best support your future growth goals. Back office functions like payroll processing are necessary and often time-consuming, but they rarely help to increase your bottom line. If you have aggressive growth goals in the next few years, then it might be the right time to outsource your back office functions and focus your staff’s efforts on sales and recruiting.
Running a staffing agency can be complicated but your payroll processing operations can be easy. At Lone Oak Payroll, our payroll processing team specializes in making sure your back office functions run smoothly and efficiently so you can focus on maximizing your profitability. Contact us today to learn how Lone Oak Payroll can help your staffing agency.