Create a Single Vendor Solution Through a PEO

Businesses have a lot of administrative work to handle. And in a complex world with new laws constantly written, business administrative workload is only increasing.

This applies to businesses of any size, both small and large. It is the small and medium size businesses (SMBs) that are disproportionately negatively affected though.

In a perfect world, an SMB can handle all its own tasks in-house. But if you were to have a discussion with any SMB owner, you will find that they do not and cannot handle the growing administrative workload required of them. They’re either overwhelmed or behind. The solution typically is to outsource to a variety of vendors that will each handle their specific task.

What kind of tasks am I talking about? Here’s a list of the most common tasks outsourced and who they’re outsourced to. This is not a comprehensive list, but it is a significant portion and hopefully illustrates the enormity of an administrative workload.

#	Administrative Task	Vendor
1	Processing Payroll	Payroll Provider
2	Processing Payroll Taxes	Payroll Provider (Usually the same one handling the payroll)
3	Workers Comp	Property & Casualty Insurer
4	Workers Comp Customer Service	Insurance Agent
5	Group Health and Benefits	Life & Health Insurer
6	Group Health and Benefits Customer Service	Insurance Agent (Usually not the same one handling the workers comp)
7	Retirement Plan Administration	Retirement Plan provider
8	Retirement Plan Advising	Certified Financial Planner
9	Loss Control and Workplace Safety	In House Employee or Outside Consultant
10	Human Resources	In House Employee or Outside Consultant
11	Platform Management	In House Employee or Outside Vendor

 

Number 11 is Interesting… What Do You Mean by “Platform Management”?

Most SMB’s vendors have an online platforms that the SMB uses to process their various tasks. For example, your workers comp insurer has a web portal that you must log into to input your payroll data to generate your monthly pay-as-you-go invoice.

More advanced platforms can connect and communicate with other platforms. An example of this would be your payroll vendor automatically sending your payroll data to your workers comp insurer’s platform in order to generate the invoice, relieving you of that duty.

In order to run as efficiently as possible, an SMB will use as many platforms that communicate with each other as possible. The ideal situation would be where all the platforms communicate with each other, they do the job accurately, and you, the SMB owner, gets to sleep well every night.

The reality is not all vendors platforms communicate and transfer data to other vendors’ platforms, and errors frequently occur between the platforms that do communicate with each other. So the SMB will have to hire a person to copy and paste date and yet another person to monitor for errors.

What kind of errors occur? Here are a few examples:

• Sales reps not getting paid their correct commission.
• Improper payroll reported to the workers comp insurer resulting in a big final audit.
• The group health insurance doesn’t get paid, even though it’s on auto-pay.

The fact is that the existence of all these vendors with their platforms requires more expertise and diligence on the part of the SMB to make sure all systems are working as they’re supposed to.

 

The Big Question

Now the big question is: is there a way to simplify? Is it possible to reduce complexity? Without compromising quality? Is there a single vendor solution?

The purpose of this blog post is to tell you yes, it can be done. You can create a single vendor solution.

How is this accomplished?

Answer: a PEO. A good PEO, the right PEO, can handle every one of the items mentioned above. A PEO is a Professional Employer Organization and the simplest way to think of it is a payroll company that handles your payroll taxes, workers comp insurance, group health insurance, and provides a wealth of other services.

Because the PEO handles the insurance coverages that are often integrated with your payroll – health and workers comp – the need for multiple vendors, platforms and personnel to handle, manage, and perform quality control is eliminated. A PEO can be a single vendor solution.

 

A Few More Benefits

But wait, there’s more. Perhaps one of the most overlooked and greatly appreciated benefit you get from a PEO is that you will never have to deal with a workers comp final audit again. Let that sink in. As an insurance agent, I have watched way too many clients of mine actually go out of business because they got an unexpected final audit that they could not afford. The errors that caused the massive audit are misclassed employees, uninsured subcontractors, and erroneously reported payroll. With a PEO, that will never happen again because the PEO handles both the workers comp and the payroll. In order to audit you, they would have to audit themselves! If you have ever been burned by a final audit, please take a moment and imagine a business life where that danger is absolutely eliminated.

Second, job costing. Because a PEO will pay payroll taxes at a fixed rate, you will always know your tax burden. How great would it be to not have to worry about employees hitting their tax caps? This can make the difference between a profitable job or a loss. PEOs allow you to estimate your projects based on your true cost of labor.

Lastly, I didn’t discuss items 9 or 10 – safety compliance and HR assistance. That’s a blog for a different day, but these are services you get for free when you sign up with our PEO. Employee handbook? Hiring paperwork? Done! Employee onboarding? Done! Safety compliance reports? Done!

In closing, imagine a world where you are free to focus on your opportunities and strengths. What if you were free to add a new product offering that you’ve been meaning to get to? What if you could create a new marketing plan to capture more of what you do best? Don’t let administrative tasks create a slow death spiral. Simplify through a single vendor solution and multiply what you do best!

If you want to read more about PEOs, click HERE to go to our thorough breakdown and HERE to read all our blog posts.

If you want to know more about how a PEO could fit into your business, please click on the “Schedule a Call” or “Send Email” button below.

Our process is simple:

1. Set an appointment. Just click on one of the buttons below!
2. Have a conversation. We’ll learn about you and your business, gathering all the information the PEO needs to offer a quote.
3. Present your plan. Once we’ve received your custom offer from the PEO, we’ll reach out to you and schedule a time to discuss and review your no-pressure potential PEO solution.