Improving Back Office Operation Efficiency

Posted on 3/22/17

One of the many advantages of doing what I do is that I get to work directly with many of our clients on their operations and get to know how their business works from the inside out. One of the questions that often comes up is how to increase the efficiency of the back office operations without having to add staff. Since back office operations are often classified as a cost center or overhead, maximizing its efficiencies can help increase your bottom line not to mention the sanity of your back office staff! There are several ways that any staffing agency can use to improve these operations such as:

Automate Timesheet Entry

Manual entry of timesheets is not only a headache but also the source of more issues from data entry errors and quite the time sink (no pun intended!). You should have a way that you can either import data from a time clock or file or better yet have a way for timesheets to be entered and approved online. In the event that your clients still want the vintage signed timesheet, you can still have the time entered online and then have the timesheet be printed out for client approval. This will still alleviate the cost and issues of manual entry of timesheet data leaving you with maybe 10-20% of timesheets that have to be reviewed or handled by staff such as expense reimbursements.

Electronic Invoicing

Relying on mailing invoices and the delays that can cause in receipt of payment can be a real problem. You should look at a way to automatically email invoices and any associated supporting documentation such as timesheets so that the client receives the invoice on the day of or day after payroll is processed. You can even request read-receipts so you have a better chance of knowing that the client received the invoice. BWSI has found that this can cut as much as 4 days off the time from a domestic client receiving an invoice in this manner versus mailing.

Discount for ACH/Direct Debit

Getting paid on time is an issue many staffing agencies struggle with, especially since they are fronting payroll while waiting to be paid from the client. Some of our clients have had great experience with offering a small discount to clients that allow them to direct debit their account for accounts payable. The discount usually ranges from 2-5% and only for allowing invoices to be direct debited within 7 business days from the invoice date. This timeframe allows for any billing disputes to be handled before debiting the account for payment. This also works even better if you are using the aforementioned electronic invoicing strategy as the client can approve the invoice for payment almost immediately.

Outsource

There are many things that can be outsourced in the back office and many options to completely outsource your back office. Let’s face it, as a staffing agency you are in the outsourcing business! For more established agencies, something as simple as outsourcing payroll can provide a huge boost to efficiency as the payroll company handles not just payroll processing, check printing, direct deposits, but also the real pain of tax filings (a boon if you are in multiple states) and disputes. I also always recommend a startup or smaller staffing agency look at outsourcing their entire back office so that all the fixed overhead is focused on revenue production as much as possible. In this manner your back office expenses only grow as your revenue grows and are not a fixed expense.

These are just a few of the ways that you can improve your back office operations without adding more staff. Some of these are really easy to accomplish and have a very quick return on investment whereas something like outsourcing your entire back office would rightfully so take more due diligence and contemplation.

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