When reviewing the amount invested in Office Payroll, the question is, do you have people taking more money out of your company than the value they are creating? If yes, what will you do to help the employee contribute more than they cost you?
Overview
Office Payroll is the amount paid out to employees for the services they have done for the organization during that pay period. This expense category represents the amount your business spends paying its office workers and non-operating employees in salaries and wages, bonuses, benefits, payroll taxes, and payroll processing fees. It should not include direct payroll costs that vary with operations.
Another way to look at Office Payroll is it represents employee wages for those who don’t contribute directly to Gross Profit. These employees are an additional expense that must be worth more than the cost being incurred, or they cost you money.
The question you should constantly be asking yourself regarding each member of your office staff is the following:
- Is this employee contributing to the sales and profits of the business. Yes or No?
- Does this employee make my life easier. Yes or No?
If neither of these primary purposes exists for that employee, you have to question why you are paying what you are paying to this person to be part of your Overhead Expenses.
When reviewing the amount invested in Office Payroll, the question is, do you have people taking more money out of your company than the value they are creating? If yes, what will you do to help the employee contribute more than they cost you? See the BusinessCPR™ Contributions Management Process to learn how to help them.