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How Staffing Agencies Can Easily Drown in Paperwork

Posted by Ray Gonder


Dec 5, 2013 9:10:00 AM

How Staffing Agencies Can Easily Drown in PaperworkMost entrepreneurs who start a staffing agency do so because they enjoy connecting good people with exceptional companies.

In order to perform this very important service, however, staffing agencies have to deal with the less-satisfying tasks of payroll, government compliance, remittance, insurance, credit checking, invoicing, and collecting. In fact, there is so much staffing agency paperwork that staffing firms can drown in it if they're not careful.

Some entrepreneurs can become overwhelmed by the sheer volume of staffing agency paperwork, which can lead to rash decisions or poor choices. Let's look at some of the many details you must manage as part of your staffing agency paperwork.

Worker Documentation

As an employer you must meet your due diligence when it comes to employment standards. This includes having your entire contract and temporary work forces sign the appropriate paperwork outlining their rights and responsibilities. It’s not enough just to tell them about these regulations or have them read over a manual. A signature indicating their understanding and acceptance is required in order to be compliant.

Client Service Agreement

Upon entering into a partnership with your client, you need to ensure that your contract addresses both yours and the client’s responsibilities. An agreement that doesn’t outline specifics such as notice periods, overtime and statutory holiday pay can leave an unsuspecting entrepreneur fully responsible and can quickly remove any profit made from the placement in the first place.


Once a staffing firm starts to grow, the amount of timesheets coming in at the end of each week can become overwhelming. Chasing the late ones can be even more so. Ensuring that both the workers and clients understand the proper procedures and timelines for reporting hours is extremely important and having them sign off on their acceptance of these hours and terms can help to alleviate any discrepancies down the road.

Invoice Preparation

Cash flow is imperative to your business. Therefore, invoices must be prepared and sent out in a timely fashion. In the staffing industry, it is typical to see clients who need customized invoices in order to pay the bill. The more clients that require customization, the longer it will take you to prepare each invoice. To ensure that hours are not disputed and to expedite the payment process, it’s important to attach a signed timesheet for each worker on the invoice.

Payroll Reconciliation

Staffing agency payroll needs to consider many factors:

  • Hours of work
  • Pay rate
  • Bill rate
  • Overtime pay
  • Vacation pay
  • Calculation of employee taxes
  • Calculation of employer taxes
  • Any statutory holidays during the pay period

Any company that processes payroll needs to have the appropriate paperwork readily available, not only for your own use when it comes to figuring out discrepancies, but also in the case of an audit by the Canada Revenue Agency. As an employer it is the CRA’s expectation that you keep accurate records of all transactions and have a healthy understanding of the rules and regulations.

Remittance and Taxes

As a Canadian employer, you have the responsibility to remit payroll taxes for both the employees and you, as the employer. You also have to remit worker’s compensation payments and any other government taxation for your province. The brown envelopes arriving in the mail from the government can seem confusing but this won’t stop them from laying fines should you remit these taxes late.

Employment Letters, Record of Employment, T4’s, and Paystubs

A paystub is required for every person you pay for every pay period outlining all taxation and deductions. But that’s not all. In the revolving door business of temporary staffing, you can anticipate a regularly occurring need for ROE’s so your temp workers can apply for EI if their services are no longer required. As if tax time wasn’t stressful enough as a business owner, don’t forget that you need to complete a T4 for every single worker you paid the previous year, even if he or she only worked one day.

A back office service provider like The Staffing Edge can handle your staffing agency paperwork while you take care of the parts of the business you love. Leave the time consuming administration to the experts (because we love what we do too), while you concentrate on growing your bottom line with sales and service.

Topics: Back Office Service Provider Back Office Payroll Financing Staffing Agency Payroll Administration Staffing Agencies Worker Documentation Staffing Agency Paperwork Business Cash Flow

Ray Gonder

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