Practice Management: Electronic Payroll Cost Savings
As with many things in life, technology can be very effective in helping to streamline processes making them reliable and effective. While many businesses have already made the move to electronic cloud based payroll systems, some might be doubtful of the benefits of making the switch and ultimately ask if it is as affordable. In my experiences there are far more benefits to having an electronic timekeeping system and the cost may very well be less than antiquated manual systems.
With many different vendors and a great variety of products, there are many options available for your payroll needs. Depending on the complexity of your practice, you may decide to use a greater quality product that will cost more while smaller practices may be able to get by with a simpler product of a lesser cost. There was a 16% cost savings in moving to an electronic payroll system at a large 75 doc multi-specialty clinic. This can be increased even more depending on the cost of labor involved in your manual processes being streamlined.
As with any upgrade, there are many benefits that come along with an electronic system. These benefits can affect more than just your payroll department. Many of the new electronic systems come with many bells and whistles that help managers to effectively monitor and control the labor costs of their employees. Electronic systems give managers a live view of the current labor for their employees allowing them to keep a close watch on employees who are close to getting overtime. Some systems can even be set to notify managers whenever an employees is about to reach 40 hours, allowing for them to make arrangements to avoid paying a premium for time worked. Managers are also able to ensure that employees are clocking out for meal and breaks so as not to be paid for time they should not be.
These systems also comes with a robust reporting system that allows HR, managers, and payroll to each run reports that are beneficial for each of their separate needs. In the past, reports like these had to be built and ran by payroll or HR and given to managers for their use. Electronic systems allow all groups to have access to only the information that they need while still only allowing the appropriate parties to edit the information.
All in all, there is a great potential for cost savings while still allowing for greater efficiency and other benefits. If your company is not using an electronic payroll system it is suggested that you explore your possibilities.
Labor is probably your practices largest expense. Investment and monitoring of labor costs are clearly to your advantage.
Joshua McClelland – Senior Executive Consultant
Joshua McClelland has over 7 years of experience in accounting and financial operations with 2 years specifically in healthcare. As a Senior Executive Consultant for Medical Management Services, his range of expertise extends from financial consulting and general management to strategic business planning, joint venture development, financial transactions, and industry analysis in the healthcare systems sector. Read more here