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August 2010 |
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 FEATURE
Solving the PEO Financial Puzzle
How Simplified Financial Statements, Uniform Balance Sheets, and Accounting Best Practices Fit Together
A PEO's success can be said to depend upon the PEO's ability to keep, interpret, and act upon its financials. Without this way of documenting and tracking payroll, taxes, premiums, client invoices, and the countless other inflows and outflows of money, the PEO would have little idea where it stands financially at any given moment. A PEO needs all the information to fit properly in the right places to be able to run.
First and foremost, a PEO's financial statement needs to be readable, comparable, and reliable. NAPEO's Accounting Practices Committee (APC) is developing a simplified financial statement to accomplish these goals, help the industry attract capital, and produce uniform financials comparable from PEO to PEO.
How revenue is reported and how the balance sheet is presented is another crucial factor to... For the rest of the article, click here. |
DEPARTMENTS
'Not my Problem!'
One Case Study on the Liability of a PEO
William J. Schilling, Esq.
At NAPEO's Legal and Legislative Conference in May, there was a good review of cases from the previous 12 months that affect employers and/or the PEO industry. I want to focus on one in particular: US ex rel. Howard v. Urban Investment Trust, No. 03 C 7668 (N.D. IL Mar. 8, 2010). While this is only an unpublished district court memorandum opinion and order on a summary judgment motion, it has created some buzz in the PEO legal community…
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No-Match Rule Update
Correct Employer Response Still Unclear
Gordon M. Berger, Esq.
Employers face a variety of potential pitfalls when hiring workers. The Department of Homeland Security (DHS) has made it a priority to ensure that workers in the United States are authorized and legal. The DHS has attempted to implement rules to ensure the eligibility of workers, including the "no-match" rule…
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Stepping Out Allows for Bigger Steps
Joel D. Duncan
The distractions of our current situations don't serve our businesses well: the economic downturn, the complexities of our business model, legislative uncertainty, chasing technology advancements, and so on. These issues, among many more, often capture the lion's share of our energy. Unless we are deliberate in seeking out doses of "outside our circumstance" stimuli, we and our organizations are destined to be defined and/or limited by our current circumstances and our current perceptions…
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Grandfathered Health Plan Regulations
Melissa B. Kurtzman
On June 14, 2010, the Departments of Health and Human Services (HHS), Labor (DOL), and Treasury issued final interim regulations for health plans in place on or before March 23, 2010 (grandfathered health plans). The guidance provides rules about what is a "significant change" to a plan in operation and form…
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Understanding the Financial Side of Employment
Clay M. Kelley, PHR
Confession: I hated accounting courses in college and hate dealing with the accounting side of running a business. I've never been interested in accounting and mathematics and I did not find out that there was something called a "FICA wage base" until I had been in the business for three years!
With this issue of PEO Insider being dedicated to the financial side of things, the focus of this article is for sales professionals to gain a fresh perspective about the financial side and cost components of being an employer...
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COLUMNS
Don't 'BP' It
Midge Seltzer
2010 NAPEO Chairperson
Throughout the summer, it has become increasingly difficult to continually hear reports from the Gulf Coast without asking why BP did not have a solid disaster preparedness plan in place and why once the explosion occurred, it was not handled significantly better? (I will leave the salient question of whether this disaster was preventable to engineers and government investigators.) It will be many years before we know the full environmental and economic impact of this disaster; the ultimate damage may even be incalculable…
…In stark contrast to BP's blatant errors, NAPEO has a crisis media strategy and resource team in place…
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How You Report Your Top Line Affects Your Tax Bill
Consistent Revenue Reporting Bolsters Case that States Should Exclude Payroll and Premium-Related Items from PEO Gross Receipts Tax
Adam Peer
At age 5, I got one of my first lessons in taxes when accompanying my parents to the county courthouse to pay our property taxes. A poster in the treasurer's office looked something like the illustration.
Ever ask a PEO owner how he sees it? You just might get a different answer for the same PEO depending on if you are buying or selling. You also might get a different answer if you ask how much revenue a PEO makes, depending on if it is going to an investor or if it is calculating its gross receipts tax…
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WHCRA, Posting for H-2A Workers, ECFA, I-9 Corrections, Small Business Health Care Tax Credit
William J. Schilling, Esq.
Q. Can I correct an I-9?
A. It depends upon…
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Getting the Attention of Congress, and Keeping It
Cheryl Gannon
Members of Congress spend their days scheduled in 10-minute increments. They go from hearings, to votes, to meetings with constituents on a wide variety of issues, from foreign policy to economic issues, to health care, and then environmental issues, and so on. They rely heavily on Congressional staff to brief them on policy issues and the status of legislation and make recommendations to them. That's why relationships between industry advocates and Hill staff are critical to getting favorable results on legislative efforts. Complicating matters is that staff turnover is very high on Capitol Hill. The average House staff member works only about one-and-a-half years on the House side and two-and-a-half years on the Senate side. So, the effort to educate them about our industry and our legislative agenda must be constant and ongoing…
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Opportunity Knocks
Peter Sheahan
I can't say I like putting the word "great" before "recession," but this downturn will be great for the PEO industry. Sure, balances are low and rates are worse, but that is all about to change. Consider this:
- The single largest piece of health care reform of the last few decades has been passed and businesses are confused-they will look for PEO partners to sort them out.
- Rates can only stay this low for a short period because capital will go elsewhere if they don't come up a little, and there is a lot of cash sloshing around the economy at present, giving rise to huge inflationary pressure-and this is good for returns.
- New business models around the developing world are run on leaner balance sheets. They outsource everything-good for growth and reach.
So the question is: how will you seize the opportunity and outperform the natural rise? I suggest you start by…
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