Which Clients Are Costing Your Payroll Bureau the Most?

Running a payroll bureau involves handlingpayroll processing, tax filings, compliance, and numerous client queries. While every client is important, some may be significantly more demanding, costing your business more in time and resources than they contribute in revenue .Identifying these high-cost clients is essential for maintaining profitability and optimising efficiency.

Key Factors That Drive Costs

Certain clients generate higher costs due to excessive payroll adjustments, constant queries, or inefficient processes. Here’s what to watch for:

1. Frequent Payroll Changes

Clients that regularly submit last minute payroll amendments, whether due to human errors, new hires, or adjustments - require additional processing time. If your team frequently re-runs payroll for a client, the operational cost increases significantly.

2. High Volume of Queries

Do certain clients call or email repeatedly with basic payroll-related questions? While client support is an expected service, excessive hand-holding strains resources and takes time away from more streamlined clients.

3. Manual or Complex Processes

Some clients still rely on outdated payroll submission methods (e.g., spreadsheets, handwritten notes) instead of automated portals. The more manual intervention required, the more costly the client becomes.

4. Late Submissions and Urgent Requests

Clients who consistently miss payroll deadlines force your team into last-minute work, often leading to overtime or errors. Rush jobs are disruptive and costly.

5. High Employee Turnover

Clients with a constantly changing workforce require frequent updates to payroll records, tax details, and benefits enrolments. A high churn rate means extra administrative effort.

How to Identify High-Cost Clients

Tracking and analysing client activity can highlight those who consume the most resources. Consider implementing:

• Time Tracking for Support – Log client interactions to measure which accounts require the most attention.
• Payroll Adjustment Reports – Review how often payroll is modified post-processing.
• Late Submission Reports – Identify clients who regularly submit payroll data after deadlines.
• Cost-to-Revenue Ratio – Compare service fees against the actual time and effort spent managing the     account.

Strategies to Reduce Costs

Once you've identified high-cost clients, here’s how to improve efficiency:

1.Implement Tiered Pricing

Introduce service tiers where clients who require additional support pay a premium for extra payroll changes, faster processing, or dedicated support.

2. Educate Clients

Offer payroll training sessions or self-service portals to reduce basic inquiries. Clients who understand payroll processes require less support.

3. Automate Payroll Submission

Encourage the use of online payroll systems that minimise manual data entry, reducing errors and last-minute changes.

4. Enforce Deadlines

Set strict cut-off times for payroll submissions and charge rush fees for late or urgent requests.

5.Renegotiate or Let Go of Costly Clients

If a client’s costs far outweigh their fees, consider adjusting pricing or—if necessary—parting ways. Keeping unprofitable clients can hurt your overall business.

Conclusion

Not all clients are equal in terms of cost and profitability. By tracking payroll changes, queries, and inefficiencies, payroll bureaus can identify which clients are draining resources. Implementing automation, education, and tiered pricing ensures that every client contributes fairly to your bottom line. Prioritising efficiency and profitability will help your bureau maintain sustainable growth and better serve clients who truly value your service.

Using Changepen can help you to visualise all this data. We will show the exact number of payroll changes, new starters, queries and more. This will allow you to see which clients are actually costing you more money.