Paperwork or Profit?

Seeing a semi-balding CEO is not uncommon in our line of business, and it has nothing to do with age. The most frequent feedback we get from our clients are that they have no time and are so sick of ‘tearing their hair out’ because they’re up to their eyeballs in admin. 

Pile Up The Paperwork

One of the most common mistakes we see is that CEO’s, owners and managers tend to delegate the pile up of paperwork and admin to a direct manager or usually the Operations Manager. 

When we work with our clients to determine how to best help manage their admin and paperwork pile-ups, we walk through an exercise that helps them determine how much the problem is costing them in real-time. This is a recent, and very real example of a scenario we walked through with one of our clients.

How Much Is Paperwork Costing Your Company?

Fred [as you can see, we’re terribly creative], is running his business well but finding he is spending every minute of his spare time and most of his day just in paperwork and admin. Initially the only way he could see a manageable way forward was to hire in an Operations Manager to take over the paperwork responsibilities. 

So we asked the question..What would this cost? 

We wanted to know what the role of the Operations Manager would be. And naturally, it is to manage the warehouse floor to enable effective and optimised processing. Although theoretically this sounds fantastic, we wanted to know how many hours a day of admin time would be spent doing the ‘paperwork’.

Working backwards, we calculated that by the delegation of paperwork, the Ops Manager would be doing an average of 3 hours a day of admin paperwork that otherwise could be spent on operations management. That is 15 hours a week, or 2 full time days. 

So; 

  • 3 hours a day
  • 15 hours a week
  • 96 days a year on admin
  • That is almost one third of the working year [there are 240 working days in a 48 week working year] dedicated to the simple task
  • Now apply the maths to the salary of that staff member. One third of an average salary of $70,000 is almost $25,000

$25,000 on paperwork!

Whether it’s an Ops manager or an admin assistant, the principles are the same – you will be delegating costly administration and paperwork instead of working out a way to avoid having paperwork and unnecessary admin altogether. 

If it’s you doing these tasks, calculate how much it’s currently costing you. Apply your salary alongside the time you are dedicating to administration and paperwork tasks. 

It’s not just the cost of admin, but the missed opportunities you could or should be making with the time and finances you would be saving if your resources were deployed elsewhere. For instance, if your Ops Manager was deployed on the shopfloor full time, they can develop operational efficiencies or deploy income-generating methods rather than spending a third of their time on admin tasks.

Even if you do it in your ‘spare time’, it’s still work. You either are being paid for it or not. 

Take A Look At Your Business

So we’d like to encourage you to take a very real look at your business and ask yourself, is your paperwork costing you profit?

Go through the above exercise and calculate how much time and subsequent money it’s costing your business.