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I’ve had the chance to work with many staffing organizations as they started hitting the inflection point in their business where Pay & Bill started to become the roadblock to them scaling their business. Your business may be at this same point in your journey. In this industry, we often focus on the front end of the business, how to win clients, and place candidates to feed the revenue that will power the growth.
And then there is the back office team, who understands how each client wants to be billed, gathers all of your employees’ timesheets before payroll, knows all of your unique employees to get payroll accurate and on time, and meets compliance among all the regulations you need to keep up with.
At some point, a staffing business will be winning more clients and placing more candidates, but the daily sales outstanding percentage is larger, the cashflow takes longer to be realized, and you’re having more customer service issues. Your back office team and processes haven’t scaled with your business growth and have now become a roadblock.
Heroes in the back office
As your staffing organization started, you had several incredible people in the back office who spent hours before payroll day entering in timesheets into Quickbooks to cut checks. They would chase down each employee that hadn’t submitted their timesheet to make sure they got it on time.
They knew which employees had garnishments against their paychecks that needed to be managed. They put together each invoice to make sure it had everything each client needed, from timesheets attached, to how each client wanted the invoice details displayed. And they did it all quickly, so the invoices went out correctly and on time, so your business got paid quickly.
They were able to handle all of this as you had a couple of hundred employees that needed to be paid, and the small book of unique and challenging clients you had against the rest of your clients. They only needed to worry about ensuring compliance with the couple of areas you did business in.
You can’t throw bodies at the problem
As you grow your business, you add more recruiters and salespeople to win more clients and place more candidates. You may implement tools, processes, and solutions, to make them more efficient to increase your profit, but as you add more people you drive your business growth as you have the cash flow to grow. Now if we think about that original back office team that understood everything that needed to be done for accurate payroll and timely billing cannot handle all the new clients and employees you have now.
You opened new offices in areas like California and Washington and all of a sudden have to deal with a bunch of new regulations to ensure compliance. So you hire more people to help out the team, but the difference now is the domain knowledge required to ensure everything is right and on time is now divided among multiple people. It’s not a single person in payroll that knows each of your employees. It’s not a single person in Finance that knows each of your clients.
So human errors or delays start creeping into your process as someone is needing to review work or they make mistakes as they don’t have the entire picture. This can have a significant impact on cash flow due to delays in getting invoices out quickly, thus paid quickly. You may have an unhappy employee due to an issue on a paycheck. You may be getting complaints of issues with details wrong on invoices leading to credits. The Finance department can feel more like the problem resolution department. You don’t feel confident you are in compliance with the regulations facing you and constantly being updated. Throwing bodies at the problems in your back office isn’t having the same effect as adding more recruiters and salespeople.
You need a rules-and-process-based solution to scalability
You need a rules-&-process-based solution to scalability. With multiple people in each department having their own piece of the domain knowledge needed to support your employees, clients, and compliance with regulations – it means nobody has the full picture like you had before as you were a smaller business. This is the inflection point where staffing organizations need to look at a different solution than just having the “heroes in the back office” that used to tackle the problem before.
You could start adding systems in place that help fix each specific problem, but you are still needing to manage all of those unique exceptions of specific clients, employees, and compliance via domain knowledge. Instead, you need to think about Pay & Bill from the perspective of a rules-based process and/or engine. Where rules defined upstream can solve the Pay & Bill problems downstream.
For example, as we sign new clients, our rules-based process has a new client onboarding which allows pay & bill processes to know each unique requirement ad-hoc when they are required instead of the back office team needing to have the domain knowledge. This can be further extended by having a rules-based solution that automates those rules into the pay & bill functions. This allows you to keep your back office nimble, accurate, timely, and not the roadblock to growing your business.
To learn more about how Bullhorn has developed solutions to solve some of the challenges of scaling Pay & Bill processes with a rules-based engine, check out our new solution, Bullhorn One.