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Implementing a payroll system will add value to your business by automating payments, managing compliance, and creating insightful reporting.
Calculating and processing payroll is a big lift for every company and requires a precise level of detail to ensure timing and accuracy of payments. Payroll systems eliminate the need to track salaries and payments in clunky spreadsheets, and drastically decrease manual time spent amongst management teams.
Federal and state payroll compliance is one of the largest areas of risk for businesses in early stages. Payroll systems will remove the risk in all the compliance stages of payroll, such as registering with regulatory bodies and calculating and remitting payroll taxes for both employee and employer.
Personnel spend is usually one of the largest cost centers for businesses and, without accurate and helpful reporting tools, businesses are not able to make key decisions around hiring plans, budget and forecasting, cash flow analysis, or tax liabilities. Payroll systems create quick and customizable reports to allow for insight into these areas.
Administrative Service Organizations (ASOs) are companies that facilitate payroll payments and deductions to employees. They also submit payroll tax filings on behalf of their clients. ASOs do not typically perform administration of wider benefits or engage in compliance support, such as new business registration in different states.
Partnering with an ASO is a great option for management teams that want to offload payroll and tax administrative tasks while still maintaining complete control over employees, benefits and HR function. The perks of this include:
When choosing a payroll provider, it’s important to compare and select based on your company’s structure. Some of the most prominent ASOs in the market are:
Gusto, Inc. is a company that provides cloud-based payroll, benefits, and human resources management software for businesses based in the United States. Gusto handles payments to employees and contractors, and electronically handles the paperwork necessary to help client companies comply with tax, labor and immigration laws.
QuickBooks is an accounting software platform that provides a large variety of services that cover the finance functions for millions of small businesses. QuickBooks Payroll allows you to manage employee payroll, pay contractors, track time, file taxes and sync payroll data seamlessly for enhanced reporting.
Run by ADP, Inc. is a simple, user-friendly product that caters to small businesses in need of an automatic payroll processor. Run was created with small teams in mind who don’t require the cost and complexity of a full outsourced HR function. Run will handle all your payroll processing and tax compliance with a simple set up.
A Professional Employer Organization (PEO) is a full outsourced HR function. When using a PEO, you enter into a co-employment agreement with the provider offering a full suite of HR services.
When a co-employment agreement is signed, the PEO becomes an ‘employer of record’ for your employees. This places the employees under the PEO’s FEIN number, which allows the company to benefit from larger pools of partners. The perks of this include:
When choosing a payroll provider, it’s important to compare and select based on your company’s structure. Below are some of the most prominent PEOs that Exbo Group interfaces with:
Rippling is a San Francisco-based Software as a Service company that provides cloud-based HR and IT employee management solutions, including payroll, benefits, computer and software management, and endpoint security. The company has the stated mission of streamlining human resource and information technology processes.
Insperity is a professional employer organization headquartered in Kingwood, Texas. The company provides human resources and administrative services to small and medium-sized businesses. Insperity serves more than 100,000 businesses with more than 2 million employees. The company has more than 2,200 corporate employees in over 60 offices across the US.
Justworks is a professional employer organization that offers Software as a Service for small to medium businesses to manage payroll, human resources, benefits, and government compliance. The company is headquartered in New York City.
Choosing a payroll system that’s best for your company depends on the size and scope of the business. In general, ASOs are better for smaller companies who want to handle their own HR and very large companies with internal HR teams. On the other hand, PEOs are better for medium sized companies that want to outsource their HR needs.
Pricing for payroll systems varies based on company needs and employee count. It’s important to analyze these factors when selecting a system type. As a company decides to increase the quality and contribution of benefits, the cost savings from a PEO will begin to outweigh the administrative cost of an ASO.
Proper implementation is important to prepare for long-term operations. Exbo Group can help with the migration of payroll systems.
Research and identify the operational requirements to be fulfilled by the payroll services.
A cost comparison will be prepared based on the company’s requirements and to ensure maximum savings.
Company and employee data will be compiled and inputted into the payroll system. Accounting software will be linked to payroll software.
The payroll system will be configured to establish controls for payroll approval and processing.
The payroll system will allow employees and dependents to select their benefits.
First payroll will be generated and reviewed thoroughly, then sent to the operations team for approval.
Ongoing payrolls will automatically be generated and easily approved. Employees can be easily managed through the platform. Compliance and tax will be handled by the software.
Choosing a payroll provider can have significant operational and compliance consequences. The professional financial advisors at Exbo Group can help you consider the benefits and consequences of each type of provider to determine whether an ASO or PEO best suits your wants and needs.
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