Accounting, Compliance and Healthcare, Oh My!

Running a business can be challenging in many areas, but some of the most challenging issues are accounting, compliance, and healthcare. Making sure that you are compliant with all laws can be a full-time job, and if you don’t have a proper HR department or if you aren’t working with PEO companies can help you through this process, you may experience situations you aren’t sure how to handle.

If you are asking, “what is a PEO?,” the short and simple answer is a PEO is a personal employment organization. A PEO helps a business handle their HR either by providing them with the information they need to self-service or by taking over all operations.

Common Challenges Your Company Should Be Aware Of

Being aware of common challenges can help you navigate through the sea of laws with which you are working to comply.

The Assumption That Profits Always Mean Cash Flow

Even if you take on a $100,0000 project that is only going to take you $50,000 to fund, you should not book $50,000 profit. Many things could hold up the deal and other factors that could cause costs to rise.  If that is the case, your estimate is wrong, and you’ve recorded incorrect numbers.

While you might want to write down every deal for your income column as it comes in, you need to refrain from doing this as it gives you a distorted picture of your company’s health. Profits do not always mean cashflow.

Failing to Classify Employees & Contractors Properly

If you classify employees as contractors, you could get into hot water. States like California are cracking down on misclassification of employees. Some companies have improperly classified employees as independent contractors because there is less responsibility to be had without employees. While it may seem like a good idea, you need to make sure of your state’s laws and classifies someone as an employee or a contractor.

Not Understanding Healthcare Laws

The Affordable Care Act (ACA) requires you to learn key parts of the law and make changes as necessary. Some of the things you need to keep in mind are the 90-day maximum waiting period. Many companies already had this period in place, but others were making their employees wait for long time periods before they made healthcare available which is why ACA put this in place.

FSAs (flexible spending accounts) can receive unlimited contributions from the employer, but only $2,650 from the employee per year. There are a couple of options available when you want to roll over employee’s FSA accounts each year. You can learn more about these options here.

While employer wellness programs and other activities that support healthier workplaces are not mandatory, the ACA creates incentives for employers to implement them. The maximum reward for these programs has increased from 20 percent to 30 percent of the cost of health coverage. For programs designed to reduce or prevent tobacco use the incentive is 50 percent. You can learn more about this here.

Payroll & Taxes

Payroll and taxes are one of the most confusing parts of HR. If you have remote employees, this can make matters even more confusing. You’ll have to figure out specific tax rates for different variations of employee classifications, make sure you are withholding the right amounts, and that you are paying the government quickly enough.

It is possible to take care of payroll in-house, but this can cause complications and make things more expensive vs. saving the company money. Payroll is another area that you might find having a partnership with a PEO company helpful. They can take care of your payroll and ensure everything is compliant in this area, so you don’t have to worry about steep fees and legal challenges.

Employee Handbook

Having an employee handbook is important when you want to protect yourself from compliance challenges. The more in-depth and specific your handbook is, the better. If you come up against a situation what you did not foresee, this can cause challenges that can cost you valuable resources such as many and time.

You can use a template for your employee handbook, so you don’t have to start out from scratch, but make sure that you get something down for people to have something tangible to look through and know what behaviors are expected of them and what behaviors are not acceptable.

Safety & Workers Compensation

Until you have a safety issue, you might not think about this area of your business too much. When you are dealing with workers compensation claims, this could be a different story. Make sure you have proper worker’s compensation insurance in place so that you can continue to do business even after an accident takes place.

Conclusion

As you can see, there are many things to think about when it comes to all of these issues in your business. Making sure you are compliant, providing proper employee benefits, and that you are taking care of your accounting department and necessary tasks are vital to the longevity of your business.

If you are unsure about how to proceed in any of these areas, you should speak with a business law attorney or consult your PEO if you are partnered with a PEO that is well-versed in compliance issues and all areas of HR. Knowing what is required of you will make it easier for you to comply.