When you’re running a business, you want to remove as many barriers to profitability as possible; if there’s something standing between where you are now and where you want to be financially, you need to identify it and deal with it as soon as possible.
There are a ton of different factors that could impact your business profits, from inaccurate time tracking to increased office costs. But there’s something that you might not necessarily expect, but can have a huge impact on your overall profitability—and that’s your payroll system.
So, the question is, in what ways could your payroll system be standing between you and profitability? And, more importantly, what can you do about it?
Time costs
As the old saying goes, “time is money.” And one of the main ways your payroll system can be driving down your business’ overall profitability? Time costs.
The more time it takes you to navigate your payroll system, the more time you’re spending away from other important or profit generating tasks in your business—and the less profitable your business will be as a result.
There are a variety of ways your payroll system can cost you time each day, including:
- A challenging interface. Some payroll systems are just more complicated than they need to be. If you don’t completely understand the features of your payroll system or how to use them to track employee time and run payroll, you’re going to spend a lot of time each pay period trying to figure things out—time that could be better spent elsewhere.
- IT issues. If your payroll system is prone to bugs, glitches, breakdowns, slowdowns, or other IT issues, you’re going to be spending a lot of time with their customer service or tech support teams trying to troubleshoot the issue—which, again, is time you could’ve spent driving profit for your business.
- Lack of automation. Thanks to advances in automation technology, many payroll systems will automatically manage all things payroll (for example, tracking employee hours and calculating tax withholdings). If you’re manually inputting your payroll data into your payroll system (and then processing it to confirm accurate hours, tax withholdings, and check amounts), you’re unnecessarily losing time—and unnecessarily losing profits in the process.
Bottom line? Your time is your most precious resource. The more time you spend driving profits for your business, the more successful you’ll be. But the wrong payroll system can take up far too much of your time, keeping you away from the important, profit generating tasks in your business—and causing your profits to take a hit.
The cost of mistakes
You want accuracy in all areas of your business. But if there’s one process you need to get right, it’s payroll. Making mistakes on payroll can cost your business in a number of different ways, including:
- Disputes with employees. Your employees want and deserve to be paid accurately and on-time. Payroll mistakes can lead to disputes with your team, and if those disputes aren’t resolved in a timely fashion or there continue to be inaccuracies on your payroll, it can cause top performers to leave your company—which can be devastating to your success and profitability.
- Issues with the IRS. One agency you don’t want to make a mistake with is the IRS. If your tax withholdings or payroll tax payments are inaccurate, it can lead to consequences with the IRS, including steep fees, penalties, or an audit.
- Unexpected costs. If there are mistakes with your payroll (for example, if you’re not tracking hours and paying your team accurately), you’ll eventually find yourself facing unexpected (and potentially steep) costs, which can throw off your budget and decrease your company’s profitability.
- Time costs to fix errors. We already covered how time costs can negatively impact your profitability. And if you have to spend hours each pay period reviewing inaccuracies and correcting mistakes in your payroll system, it’s just going to add to your business’ time costs.
When choosing a payroll service, it’s important to make sure that the system you choose will process your payroll and tax withholdings 100% accurately; otherwise, those mistakes can cost you business in a huge way.
Financial costs
Your business’ profitability is all based on money in versus money out. The less money you spend and the more money you bring in, the more profitable you’ll be. And, on the flip side, the more money you spend and the less money you bring in, the less profitable you’ll be.
So, one of the simplest ways your payroll system may be standing between you and profitability? Financial costs.
There are a ton of payroll systems out there that are prohibitively expensive. Not only do you have to pay a fee every time you run payroll, but you’ll also get hit with additional fees for check printing, adding new employees, sending W-2 and 1099-NEC forms to your employees or contractors at tax time...basically, any opportunity there is to upcharge or slap you with a fee, the payroll provider will take advantage of that.
And over time, those additional fees and charges can add up in a major way, increasing your expenses and having a negative impact on your business’ profitability. Plus, unexpected fees and charges can make it hard to create accurate financial projections or budgets, which can also put your business at risk of going into the red.
The point is, there are a lot of costs to using the wrong payroll system—but the costs that most directly impact your bottom line are the financial costs.
How Hourly can help you recoup your payroll system costs and increase your profitability
Between the time costs, financial costs, and the costs of inaccuracies and mistakes, using the wrong payroll system can wreak havoc on your business.
But your payroll system doesn’t have to stand between you and profitability. With the right payroll system, you won’t have to spend time, energy, and money on trying to navigate the payroll process—and you can use that time, energy, and money to increase profits for your business.
At Hourly, we’re committed to making the payroll process streamlined, accurate, and affordable—and to make it all possible with a few swipes on your mobile device. All of the Hourly app’s features are designed to make payroll (and your life!) as simple as possible, including:
- Process payroll, track employee time, and manage workers’ comp—all from the same platform
- Support for hourly and salaried employees
- Support for W-2’s and 1099s
- Automatic overtime calculation
- Unlimited payroll runs
- Weekly, bi-weekly, semi-monthly, and monthly pay periods
- Compliance features
- Expense reporting
Want to find out how Hourly can help you recoup the costs of your payroll system (and increase your profitability in the process)? Get started today.
1. Introducing Yourself
Your introductory email needs to pack a lot of information into a small package. Try something like this:
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Hello Jane,
My name is John Doe and I work for ABC Agency, where we provide business insurance policies to many of Dallas' rockstar small businesses.
Congratulations on your new business, Jane's Bakery. Are you wondering if you have all the insurance you need? Or if your policies will really cover you in a pinch?
At ABC Agency, we pride ourselves on providing robust, comprehensive coverage options to companies like yours with flexible, pay-as-you-go plans.
Are you available this week to talk more about how we can help? I can help you find the most affordable rates and the best policies out there.
I look forward to speaking with you soon.
Cheers,
John Doe
2. Presenting a Quote
Once you've met with your potential client, a quick reply with their quote will get the ball rolling.
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Hi Jane,
Thanks so much for meeting with me this morning. I loved touring Jane's Bakery–I can still smell those delicious chocolate chip cookies baking! You have a great location, and I'm sure you're going to do great on Front St.
After reviewing my notes, I've pulled together an insurance quote for you (attached). I recommend a business owner's policy. A BOP includes several insurance products in one: liability, property insurance, and business interruption insurance. It offers robust coverage at a competitive price.
I'll call you in a few days to see what you think about this insurance plan. In the meantime, if you have any questions, don't hesitate to email me or call me at [phone number].
Again, thank you for your time today. I look forward to working with you in the future.
Cheers,
John Doe
3. Thanks for Purchasing a Policy
Gratitude is important! It's never a bad idea to thank your clients for their business.
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Hi Jane,
Thank you for choosing a business owner's policy with ABC Agency. We know it's so important to get the right coverage for your business, and we are honoured you've placed your trust in us.
We're excited to work closely with you, and our no. 1 goal is to make sure you're business is always protected.
Do you have any questions? We are here to help. Reach out whenever something comes to mind.
Thank you again for choosing ABC Agency to insure Jane's Bakery.
Cheers,
John Doe
4. Welcome Email
A welcome email helps clients feel like you're there to help–and can softly pitch other insurance products you offer.
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Dear Jane,
Welcome to the ABC family! We are thrilled to have you as a new customer and can't wait to meet all of your insurance needs.
As an independent insurance agency, we work with multiple insurance providers to find the best coverage options for all our customers. If you need any other type of insurance–like [include additional offerings unique to your agency, like life insurance, health insurance, home insurance or anything else]–we can help you too.
Do you want to discuss any of these policies?
Cheers,
John Doe
5. Introducing a New Product
A happy client may want to expand their business with you.
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Hello Jane,
I hope all is well with you and Jane's Bakery. I stopped in yesterday for a blueberry muffin and coffee, and they were delicious. I loved the hint of cinnamon in the muffin! Was that your idea?
I wanted you to be the first to know we are now offering commercial vehicle insurance to our policyholders. Auto insurance for your catering vans is super important since your personal car insurance won't cover them.
We're offering this insurance coverage solely to our current business clients at the moment and have some very competitive rates.
Would you like me to work up a quote for you?
As always, thanks so much for being a part of the ABC family.
Cheers,
John Doe
6. Asking For Referrals
Once your relationship is established and comfortable, let your clients help you grow.
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Hi Jane,
You've been a valuable member of the ABC family for two years now, and we so appreciate your business–not to mention the muffins you supply for our monthly meetings!
Because you are a valued policyholder, I wanted to ask a quick favour. I know you are active in the local Chamber of Commerce, and I'm hoping you might know some colleagues who would benefit from working with our insurance company.
Referrals are one of the most effective ways to connect with our community since people really trust their friends, family and colleagues. Is there anyone you'd recommend I speak with?
Remember that in addition to business insurance products, we offer everything from life insurance policies to pet insurance.
As a thank you for your help, we will send you an Amazon gift card of $100 when your referrals buy insurance from us.
Thanks so much for your help!
Cheers,
John Doe
7. Policy Renewal
If your client needs to renew their policy with you, send an email like this:
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Hi Jane,
I hope you're doing well! What a year it's been—from being listed as one of the top 5 bakeries in Dallas to being an official vendor for the city—you have so much to be proud of.
Just a heads up that your business owner's policy is up for renewal soon and will expire on June 15, 2023.
If you're still happy with the coverage, we can easily renew it for you.
Do you have some time to chat this week?
Looking forward to serving you again!
Cheers,
John Doe