Feeling the pressure to make your company more efficient? Looking to update your operations, get ready to sell or just get out from under the administrative yoke? If so, the back office is a great place to start.
Sure, business administration isn’t your company’s mission and no one wants to do accounting or payroll (unless you’re an accounting or payroll professional), but it’s still vital to your success. So, how do you make your back office run smoothly if you’re not an expert in business administration?
Corporations have entire departments dedicated to administrative duties because they can afford them. But even if you can’t afford an accounting department, tax department, payroll department, etc., there’s a way to rent the same expertise and get the same benefit (or more).
1. The Cost of Inefficiency
Efficiency in business administration has a direct impact on your balance sheet. You can win as many clients as you want, but it doesn’t do your company any good if your billing processes are inefficient and you’re not getting paid.
In the healthcare industry, for example, practices receive a chunk of their revenue from insurance providers. To receive that revenue, they have to get their ducks in a row when submitting paperwork to the providers.
Dental and medical practices have to manage many points along the revenue cycle, including accounts receivables, adjustments and refunds. Without best practices to manage the process, their collection rate and overall cash flow drops. And so do profits.
2. Improving Efficiency
So, how do you improve your company’s back-office operations without expertise in business administration? By getting expertise in your corner, whether it’s in-house or not.
Healthcare practices that have strong processes in place for billing can increase their collection rates and overall revenue. But they have to know what strong processes look like in the first place. They need someone who has experience running healthcare practices to show them.
3. Benefits of Contracting the Back Office
Contracting business administration takes the burden off your shoulders without the cost of hiring full-time employees. It’s an efficient way to streamline your business operations, whether you just want to update those processes or get ready for growth.
It’s worth mentioning that some administrative areas are critical to the health of your business. You always need to stay in compliance with employment law, address risk and safety management issues, plan and file taxes correctly and pay your employees on-time, every time. A mistake in one of these critical areas can hinder or even sink your business.
4. Identifying Areas to Contract
If you’re looking at your business, how do you identify the right areas to contract? And what does the exercise reveal about your business as a whole?
While there are many areas to investigate, some of the biggest are the existing resources you have in-house, the areas in which you lack expertise and the business administration duties that are giving you the biggest headaches.
If you’re overwhelmed, you’re probably looking to offload whatever administrative tasks you can. If you want to update your business operations, you need to identify the areas that most need updating. If you’re planning growth or sale of your business, you’ll want to identify the areas you need to shore up to make that happen.
Again, remember that mistakes in certain administrative areas can harm or even derail your business. Also, take note of what this exercise reveals about your business. By identifying all the areas where you need more expertise, you’re giving yourself a clearer picture of your resources and your company as a whole.
5. Streamlining Business Administration
Unless you’re an accountant, you probably didn’t get into business to do accounting. Yet as a small business owner, you have to do the accounting yourself or hire someone to do it. The same with payroll, human resources, taxes and everything else.
And you have to perform all of those functions efficiently for your company to make money. By streamlining business administration, you can make your entire operation more efficient and profitable.
6. Contracting to Streamline
Corporations staff full departments to perform business administration for the entire company because they can afford to staff full departments. Essentially, they keep all the expertise in-house.
But most companies, and definitely most small- to medium-sized businesses (SMBs), can’t afford to keep all the experts in-house. Chances are high that you don’t have the money to hire an accountant, a payroll expert, an HR professional (or multiples of each) and whatever else you need.
However, you can rent those services and get the same benefits that corporations do at a fraction of the cost. In other words, you can act like a down-sized, streamlined corporation even when you’re not.
7. Contract the Back Office
No matter what you got into business for, you need someone managing the back office for you. However, hiring full-time employees for each business administration task may not be a realistic option for you.
By contracting business administration services, you can unload the burden of the back office, streamline your operations, prepare for growth or all three at once. And you can do it with peace of mind because you know real experts are helping you out.