In today’s economy, reducing administrative overhead costs to their bare minimum can literally mean the difference between success and failure for middle market companies. In an environment when top line revenue is, at best unpredictable, it makes perfect sense to lower the break-even revenue point of the company as much as possible.
One of the easiest ways to accomplish this is to outsource payroll AND eliminate any redundant input of job cost information. It is one of my standard recommendations and I constantly hear variations on the following themes as objections to this recommendation:
My response to these objections usually follows alone the following lines:
Depending on the manual nature of the legacy job costing/payroll process, championing process improvement like this can allow a middle market firm to reduce its administrative staffing by an entire full-time equivalent employee.
If your company struggles with profitability or is challenged with cash flow, continuing to carry excess costs and overhead burden can mean the difference between solvency and insolvency.