Have us write-up the processes you need to lower your administrative costs.

A significant portion of administrative costs can be spent paying employees for skills you don’t use on the one hand and correcting errors that go undetected when you use untrained employees on the other hand.

Of course, in the open employment market you have to pay for the skills that your employee makes available to you. But have you thought how many hours you actually use those skills versus how many hours you are paying just to have those skills on hand. I think we know that higher paid staff spend many hours filling in their time with a lot of lower paid work or no work at all.

Let’s just suppose that a $50,000 a year person spends 20% on work that a $25,000 a year can be trained to do. The savings would be $5,000 ($50,000 minus (($50,000 X 0.8) + ($25,000 X .20)) or 10% of the total gross pay.

OK so there is a savings opportunity, but how to actually achieve a real savings of the $5,000. If you wanted to keep the work in-house, you would have to reduce the senior person’s annual salary from $50,000 to $40,000 and then hire someone for 8 hours a week at an annual rate of $25,000 maybe at an hour a day! This would be difficult if not impossible to achieve.

First of all the senior person is not going to suggest a reduction in their own salary. On the other hand, if you make the decision to reduce the senior person’s salary, the person won’t be staying around very long. Finally, it would be impossible to hire someone for only 8 hours a week and expect to retain their services on a long term basis.

So now we know there is a cost savings opportunity but no easy way to really achieve the savings.

But maybe there is a way!

You let the senior person go altogether and outsource either all the work to a company like Stenson “Bookkeeping Simplified"or outsource at least the high level skilled work and have us map, implement and train entry level staff to do as much of the work as possible at a much lower cost.

That way you are only paying for the skills you need when you need them!

By the way, the mapping of the processes would include all the controls that a business owner would have in place if in-house staff existed or not.

Don’t wait to phone us at 214-390-7446 to hear more about outsourcing your back-off bookkeeping and other administrative processes.