Can You Switch to a PEO After the New Year?

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The New Year is quickly approaching and if you’re a business owner you may not have gotten all of your ducks lined up in time for January 1. Were there things you wanted to do or change in 2014 that have fallen through the cracks and won’t be ready in time?

There are lots of vendor switches or new services contracts that begin on January 1 out of the convenience of having annual contracts, but in this article we’re addressing one particular type of services company: the PEO.

Whether you’re a company looking to engage in a PEO contract for the first time, or a company that already works with a PEO but is looking to make a switch, you are probably a little bit nervous about the transition. Is it going to be an administration nightmare? Do I have to wait until next year to engage in a new contract because there’s no time left in 2013?

In short, no. It’s not going to be an administrative nightmare, and contrary to common misconception, a new PEO contract can begin at any time of the year. If you’re unhappy with your current PEO or in immediate need of cost reduction, you really shouldn’t wait an entire year to correct your situation.

Employer Solutions Plus is skilled at analyzing and delineating current PEO contracts to ensure the easiest “exit strategy” possible. We review all payroll taxes to ensure that no amount of money has been put toward SUTA, Social Security, Medicare, etc. in advance, and that the amount of health insurance deductibles that have already been paid in 2014 don’t end up being forfeited.

We also work with a handful of PEOs that are willing to offer credits for taxes or benefits already paid if there is no way to ensure a smooth transition without overlapping or duplicated costs. So, while the most convenient time of the year would have been January 1, know that you are not out of luck!

Employer Solutions Plus can identify the most convenient (but also the most cost-effective) time frame for making the switch! Call us at 727-698-6207 if you’d like some more information.

When is the Best Time To Switch to a PEO?

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Whether you’re a company looking to engage in a PEO contract for the first time, or a company that already works with a PEO but is looking to make a switch, timing is everything!

It is a common misunderstanding that PEO contracts need to begin on January 1. If companies wait for the next calendar year, they could waste months overpaying for services, experiencing dissatisfaction, or outgrowing a vendor.

However there are a few red flags that are worth paying attention to, so that money is not lost or wasted when making a switch. Here are just a few:

  • Payroll Tax Restarts: You must be careful to avoid payroll tax restarts. Sometimes the amount of money put toward State Unemployment, Social Security, Medicare, and other taxes to date can be forfeited.
  • Health Insurance: With a health insurance switch, the amount of deductible that employees have paid to date with another health insurance provider can be forfeited. While this won’t necessarily be an upset for you as the business owner, but it may result in several disgruntled employees!
  • Anything Paid in Advance or Deposits Made: Did you make a deposit on workers compensation insurance? Do you pay any insurance premiums one month in advance? These are important things to look at so that you don’t have an overlap of services (or costs) when starting with a new provider.

While the above mentioned items are worth paying attention to, they aren’t worth scaring you away from a new PEO contract. Did you know that some PEOs offer credits for taxes already paid? That’s right, even if you have put money toward SUTA or other taxes, you can be “reimbursed” by your new PEO. Employer Solutions Plus can identify the most convenient (but also the most cost-effective) time frame for making the switch! Need some help? Contact us today!

 

5 Ways to Cut Operational Costs

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Running a 1-man shop was pretty great, wasn’t it? Operational costs were relatively low …. no office lease, no employee benefits, no payroll, just one or two insurance providers.

However, most successful businesses grow over time. From one employee …. To two…. To three…. To one day waking up and having a department of 20 fulltime employees!

Gone are the days when your business’ monthly accounts payable page consisted of your own health insurance and an occasional dining expense for client entertainment! But chin up; an increase in operational costs is often a sign of growth. It’s important not to get tied up in the growth phase though, and forget about the expenses that are piling up. Did you know that keeping ongoing and recurring expenses under control is an important part of ensuring continued growth and success? It’s not just about increasing income!

Employer Solutions Plus recommends analyzing these 5 operational expenses. Decreasing them will result in a bigger and better bottom line each month.

  • Payroll Administration: Payroll fees often depend on the number of employees that you have and the number of payroll periods each month (which determines the number of checks prepared each month). The market is highly competitive though and pricing should be relatively negotiable. Do you have unnecessary charges each month for payroll services you aren’t utilizing? Could you save $2.00 per paycheck each month by switching to another provider? It may not seem like a lot, but if you have 60 employees that get paid on the 15th and 30th each month, that’s 120 checks – you’ll save a few hundred dollars a month by switching!
  • Lease Agreements: Landlords are more willing to renegotiate a lease in an economic downturn or when an existing tenant inquires about the rent. Have you been a great tenant for several years now? Use that to your advantage! Your landlord would probably prefer that you stay put versus starting over with someone new!
  • Credit Card Processing: If your business accepts credit cards, you’re probably paying your processor too much for convenience. We understand that convenience comes with a price, but like payroll administration, credit card processing is a very competitive market.
  • Benefits: Health insurance is a large and recurring expense for most businesses. Click here to read a little bit more about ways to lower your company’s health insurance costs – immediately!
  • PEO: Do you work with a PEO? If so, they’re probably saving you a lot of time and money when it comes to employee management and HR administration. But, there are nearly 800 PEOs in the United States – How do other PEOs compare in price? Is there a better fit for your organization?

Don’t have time to shop around? At Employer Solutions Plus, we represent multiple providers in payroll administration, PEO solutions, and benefits. This allows us the flexibility to customize a cost effective solution to meet the individual needs of our clients (while saving you money, too!). Contact us to discuss your business’ expenses; everyone has some room to save!

Are HR Tasks Negatively Affecting Your Revenue?

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When we hear the word “revenue,” we tend to look at our sales teams, marketing, and our company’s actual products or services – After all, aren’t those the departments or areas responsible for generating revenue?

It’s not uncommon for organizations to overlook the not-so-obvious areas that may be positively or negatively affecting revenue – especially Human Resources!

Here are just a few HR areas that may be hurting your cash flow AND sales.

  • Hiring: What’s your company’s recruitment strategy? More often than not, it’s HR’s responsibility or the business owner’s responsibility to find the next star employee. When HR or anyone for that matter fails to hire the “right” candidate, this new employee can cost you more than their salary. Poor performance, workplace conflict, firing, and re-hiring ALL cost your company money in addition to the fact that you’ll have missed revenue opportunities.
  • Payroll/Salary: Does your company accurately report and distribute payroll each month? Click here for a list of lost income scenarios which can result from payroll mistakes. In addition, you may actually be overpaying some of your employees – who designs your company’s pay grades? As you know, outgoing expenses directly affect your net income each month.
  • Priorities: Human Resources isn’t just responsible for controlling costs. They need to work with executives to identify and prioritize the areas of business (and the people) that generate the most revenue.Who is your company’s star? What is your most profitable department? What are you doing to reward and retain them?
  • Leadership Development & Training: HR is often responsible for planning and conducting on-site training, continuing education and leadership development. Are you giving your employees and management teams all of the tools and resources they need to succeed and generate more revenue?

If your company is struggling in any of the 4 aforementioned areas, please contact us today. HR bottlenecks can quickly destroy your revenue potential and can develop into much larger problems if they are not addressed and corrected.

Sometimes all HR needs is a little support! Employer Solutions Plus offers a variety of employee management and HR solutions, designed to put your company in a much stronger financial position. You focus on growing your business, and we’ll make sure HR is properly maintaining it!

How Do PEOs Improve Cash Flow?

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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.