Jobs are an essential part of the American economy. Few, in fact, would argue that the job they hold is essential to the life they lead. Job satisfaction or dissatisfaction can motivate you to get up in the morning before the alarm, or linger in bed longer than you should. The salary you earn from a job is what pays your house mortgage, puts food on your table, and what helps you send your children to college.
How that salary is calculated and monitored, however, is also a big job. Entire staffs, and sometimes entire offices are tasked with the job of calculating, totaling, and distributing payments and withholding taxes. And while companies of all sizes may think that they are able to the payment processing and billing services, the reality is that these clerical tasks are often more successful and accurate when they are outsourced. Large offices that also have to deal with medical record services are even more likely to need the help of an outside payroll provider.
Even Small Company Acquisitions Require Significant Amounts of Payroll Management and Planning
Small business payroll solutions can be complicated. Employees who start in the middle of a month, for instance, can require special attention. When one company is purchased or acquired by another company, eventually the payroll schedules eventually have to be synced up. The process of smoothly transitioning from one payroll processing service to another can be both complicated for the employer, and stressful for the employee.
One of the steps in creating one company from two different companies, for instance, is to move all employees onto the same Human Resources (HR) system. In order to make that happen companies have to go through the process of transitioning the small company HR system to a single version of the new HR system. As part of this effort, new HR employee portals work toward an initial implementation date, while at the same time keeping employees up to date on any significant changes.
The most significant change, of course, occurs when it becomes necessary to convert everyone to the same pay schedule. For example, the first step could involve converting from a semi-monthly pay schedule, which amounts to 24 pay dates a year, to a parent company?s standard biweekly schedule, which amounts to 26 pay dates a year. Even the explanation that workweeks under a new schedule are calculated from Sunday to Saturday ,ay be needed for employees to understand how these changes will impact their take home pay. If, for instance, the initial switch includes a significant reduction in one payment, employees need to be informed well in advance so that they can budget for these changes. Additionally, if the new parent company is going to treat acquired employees like new hires, a one time payment reduction of as much as 40% may be needed.
A Paid Current system compensates employees for a set period of time up to and including the pay date. A Paid in Arrears system, on the other hand, compensates employees for a set time period ending prior to the pay date. For some companies this means one week prior to the pay date. Whether employees are compensated semi-monthly or biweekly, and whether the employee compensation is calculated by a Paid Current or Paid in Arrears method, the total annual salary/compensation remains the same. The division of that salary, however, changes. The initial payment on the first month of the change then can include this major reduction of as much as 40%.
Payroll outsourcing providers not only cut checks and make automatic deposits, they also handle the explanation of payment changes. For these reasons, 85% of certified public accountants recommend small businesses employ professional payroll providers.
Many Agencies Also Outsource Medical Record Services
Few payment and billing systems are as detailed and complicated as medical record services. Like the payment processing platform, many health and wellness agencies make the decision to outsource their medical record services to an outside provider so the health employees can focus on the care and comfort of the customer. Patients who arrive for a sensitive appointment, for instance, benefit from the full attention of every staff person who they encounter. Staff who are attempting to manage record or billing statements, however, can often be preoccupied.
