As your business grows, it’s essential to set yourself up for success. For some companies, this can mean preparing for expansion by using complete payroll solutions to automate the payroll process. For others, this can mean employing more HR & payroll employees to keep up with the increased workload. Today, we’ll take a look at both approaches to determine which one is best for your business
What Is Business Growth?
Before we dive into the approaches to growing your business, let’s first find a definition. What exactly is business growth? Well, business growth can be achieved in many different ways, from expanding your physical locations or hiring more staff to increase the top line and more! Exactly what business growth means for your business will depend on your specific goals and the progress you’ve made when compared to your KPIs.
For the purposes of this article, we’ll define business growth as either: a.) increasing overall revenue, or b.) increasing profitability by reducing costs. Although many businesses may choose to focus on one or the other when attempting to grow their operations, the truth is that with the proper approach it’s possible to achieve both goals simultaneously.
One of the most effective ways to increase revenue while reducing costs is to take a second look over your payroll system. Often, you’ll find your payroll system is standing in the way of growth through limited productivity or inefficient processes, which leads many companies to consider one of the following options: expanding their payroll staff or switching to payroll software. But which is the superior option? Let’s take a look at both to find out!
The Problems of Expanding Your Operations Without Payroll Software
First, let’s go over the positives of a software-less approach. When you choose to employ a larger payroll staff rather than switching over to complete payroll solutions, you’ll:
- Have complete control over the entire process
- Personally know the people in charge of your payroll
- Be able to up-size or down-size your payroll staff at any time
For business owners who prefer a personalized approach, in-house payroll management can seem like an appealing option. Of course, just because it’s appealing doesn’t mean it’s the better option.
The most obvious disadvantage is staffing. When your business expands, the payroll responsibilities will increase as well. While you could ultimately decide to not expand the payroll department, this is unlikely to end on a positive note, since staff will quickly get overwhelmed and workers will be upset if there’s a delay in getting their paychecks. This means your payroll will demand higher operating costs as your business grows, increasing overhead costs.
Another disadvantage of the in-house approach is an increased likelihood of errors. Even if you can afford to expand your payroll department and hire an additional set of employees, people of all ages, experience levels, and skillsets are prone to making mistakes. This may not happen often, but unfortunately, mistakes are not easily forgotten when it comes to payroll. Even the simplest of mistakes could result in incorrect paychecks being issued, requiring payroll to be recalculated, checks reissued, and workers being upset. If this happens on a routine basis, you are sure to see a reduction in your retention rates as well, because employees don’t want to work for a company that they can’t trust to pay them on time.
The Advantages of Expanding Your Operations Using Payroll Software
Although the idea of implementing complete payroll solutions in your business may seem daunting at first, the long-term advantages vastly outweigh the potentially uncomfortable transition period. Using payroll software, you will be able to:
- Upscale or downscale your payroll at any time
- Reduce payroll staff (lowering overhead costs)
- Ensure that payroll compensation will be distributed on-time
Unlike a manual payroll system, payroll software such as UZIO requires almost no input from the payroll staff. After initial information (such as employee data, pay rates, and relevant deductions) has been put into the system, the software will handle everything from there. Using time and attendance data, the system can accurately calculate paychecks as the hours come in, applying all necessary taxes and deductions to the final paycheck, and even handling paycheck distribution! As you would guess, this greatly decreases the workload for the payroll department, which means you can down-size staff, thereby lowering operating costs without reducing overall efficiency.
Another advantage of using payroll software is that it can often be used alongside HR software. All-in-one systems even allow companies to manage both departments from a single platform, integrating data between HR and payroll. This not only reduces the amount of time needed to add information to the system but also ensures that each department has access to current, accurate data. It can also help ensure tax compliance since the HR department can review payroll information (and vice versa).
Payroll Software: A Clear Winner
Although manual processes may be great for nostalgic purposes, at the end of the day most businesses want to expand operations, raise revenue, and lower ongoing costs in the most effective manner possible. With the proper choice of payroll software, you will quickly experience increased efficiency, a reduction in errors, and smooth, pain-free paydays. The only thing that’s keeping you from successful expansion is you, so don’t hold yourself back anymore. Prepare yourself for prosperity and enable your business to reach new heights with a 30-day trial of UZIO, an all-in-one HR & payroll platform. Success starts here.