Managing Cash Flow

Specific Recommendations 217
ager and a supervisor or accounts receivable processors. The remaining
processing can be accomplished through the use of two database analyzers,
one customer service contact, and one credit and collections coordinator.
This should result in annual savings of over $150,000 based on last
year’s actual costs of $264,100.
6. Integrate billing, accounts receivable, and collections into the overall company
computer system so that minimal offline processing is necessary.
This will result in the use of two database analyzers rather than accounts
receivable processors.
Payroll
The biweekly payrolls being processed by the company do not incorporate any
features that would be unexpected in standard payroll processing. It is presently
costing the company over $136,000 annually to process these payrolls. It is recommended
that the company consider one of three proposals for an outside payroll
service providers to take over these functions at an annual savings of at least
$100,000. We have talked to the following payroll vendors and their annual costs
to support the company’s 250-person payroll would be as follows:
ABC Payroll $35,000
The Payroll Company $28,000
Your Payroll Inc. $32,000
All of these vendors are reputable in the field, and all offer the features necessary
for the company:
• Uploading of payroll data from the company’s computer systems
• Integration of payroll processing with manufacturing labor distribution
and the company’s budget system
• Processing of all salary payrolls on an exception basis; that is no input
required unless there has been a change
• Processing and control of all payroll changes, with feedback and approval
by the company, prior to payroll processing
• Full maintenance of personnel related data fields such as vacation time
accrued and taken, sick time, personal leave, nonchargeable time, and so
on
• Confidentiality in processing all payrolls including the management payroll
• Downloading of data files and reports from their computer system to the
company’s as a standard or a request basis, or in combination
• Preparation and submission of all payroll reports to regulatory and taxing
authorities
• Preparation of W-2’s for each individual at the end of the year