Not-for-profit organizations seem to have a mixed reputation: they provide amazing services and are truly dedicated to helping their communities, but so many not-for-profit organizations struggle with monetary resources that potential employees tend to look elsewhere, knowing that their paycheques might be higher at a different company. Tracy Agwin, a writer for the Australian publication Pro Bono, and Managing Director of the Australian Payroll Association, recently wrote an article focusing on how not-for-profit businesses can find new ways to control financial spending. According to Agwin, the best way to do this is to start examining the organization's employee payroll program and see where the inefficiencies are located.
Agwin noted that a company's payroll program is often overlooked whenever large-scale improvements are made, which often leaves organizations "doing exactly the same things they did a decade ago”. Areas of payroll processing that may be particularly prone to mistakes commonly include preparing and filing tax returns, performing gross-to-net calculations for every employee, and completing payroll tax calculations on time. These may seem like little tasks, but even for an experienced business owner, it is easy to make mistakes when calculating the books for an entire organization.
Business owners who manage employee payroll without professional assistance can easily become inundated with tasks (especially during tax season) and may have significantly less time to spend focusing on the core business of the organization. Furthermore, small mistakes in employee payroll processing can "snowball" and quickly become very expensive mistakes. Small business owners are often warned of these risks when beginning a new business, but not-for-profit organizations may be secretly suffering from the same mistakes.
And these payroll mistakes can be even riskier for such organizations, because violating Canadian regulations can result in a revocation of charitable status. It appears that not-for-profit businesses, just like small businesses, can really benefit from outsourcing employee payroll in order to weed out all those inefficiencies mentioned by Agwin. Once the foundation of a corporation is running smoothly, its employees can focus on what really matters.