How Do PEOs Improve Cash Flow?

Professional Employer Organizations save clients time and money by eliminating the inefficiencies of dealing with multiple vendors. And, for clients that have never worked with a Professional Employer Organization, the new co-employment relationship will likely improve your cash flow as well.

The most common way that PEO clients improve their cash flow is through the PEO’s workers compensation master policy. Even if you are a small company of 10 employees, the co-employment relationship will permit you to reap “big company benefits.” This eliminates debilitating workers compensation items from your cash flow such as down payments, audits, and set monthly payments. Many PEO clients instead enjoy “pay as you go” workers compensation based on gross wages and/or class codes for each pay period.

Second, with the help of a PEO your staff can spend more time on revenue-generating activities. Does your management team lose time (and money) each month tending to payroll, health insurance, administration and employee management activities? Working with a PEO will remove these unproductive activities, permitting you to “make money” all month long through consistently maximizing your internal efficiencies.

And, last but not least, PEOs provide predictability in operating costs. Through a co-employment contract, you rarely experience “vendor surprises” or unexpected expenses each month surrounding operations or employee management. The costs are clear, and they’re consistent.

Employer Solutions Plus can help companies with as few as 5 employees quickly and easily find the right PEO provider for improving cash flow, saving time, and saving money.

To improve your company’s overall cash flow position, contact us.