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      01-14-2019, 08:26 AM   #38
RickFLM4
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Quote:
Originally Posted by MrRoboto View Post
That's a great example. Rather then your company hiring someone to help with the payroll or contracting an outside payroll company has made the job easier for payroll at the expense of employees.

Your company is taking a huge risk by having one person to do payrol. If she quits or gets sick you guys are in the shit. Outsourcing payroll/benefits is quite inexpensive. 75 people is a decent size 'small' business.
Years ago, I was controller and then CFO for a company that did something similar to DETRoadster's company. (In our case we went from weekly payroll to 2x / month for non-commission payroll.) We also had one person who spent a full day collecting and prepping payroll for the outsourced provider and then reviewing what we got back before the cash was transmitted each payroll period. That doesn't mean she was the only person who could do it. There were several other people cross-trained and able to step in if she was sick, on vacation or if she left the company. However, having her spend 24 days / year on it rather than 52 means we picked up 28 work days a year for her to do other productive things, in her case related to employee benefits. 5-6 weeks of man-hours was not insignificant to us and everyone eventually adapted after initially complaining loudly. I also reduced the frequency of vendor payments and stretched terms, to which they also adapted, with similar efficiency gains. Efficiency is important to controlling costs and I do not agree that it makes sense to just keep hiring people to do administrative tasks that can be done more efficiently. In our case, it had nothing to do with cash flow and everything to do with efficiency. Presumably outsourced providers have more efficient solutions today than they did back then so the efficiency savings would not be as great. But nevertheless, it is in everyone's interest to keep administrative expense growth in check.
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