---

Guest post by: Anthony Kelly Become an Author

Tweet

---

---

As an entrepreneur, you may often find yourself doing things that you never wanted to do. You want to focus on your business, however, "employee business" keeps getting in the way. Most companies find that by offloading some of this busy work it allows them far more time to spend on increasing revenue allowing their business to fare better in the long run. Unlike outsourced payroll, both PEOs and ASOs offer additional services to relieve you from administrative work, however deciding which way to go can be a challenging process.

The ASO provides administrative services for your organization such as processing payroll, performing direct deposits, and filing payroll taxes. Like outsourced payroll, the filing is under you federal employer's ID number (FEIN). However, unlike outsourced payroll, the ASO will provide assistance with questions concerning compliance and legal concerns, access to insurance, worker's comp, and medical and dental benefits. These offerings and costs are based on your employee base and employment risks associated with them remaining in your organization. The ASO provides the small business employer, "employment related" relief for businesses with 50 or more employees.

The PEO offers similar services to the ASO, however, the offering is actually more comprehensive. Unlike ASOs, PEOs take on a level of shared risk with your business. Because of this risk, PEO companies will assume responsibility for employment, government compliance regarding issues such as new hire state reporting, filing and paying taxes to the proper entities, unemployment claims administration, and worker's comp issues. PEO's also provide access to pooled employee medical, dental, and other related healthcare plans. This pooling ideally provides smaller future cost increases to your business. As you know, one significant claim can considerably increase your fees; the PEO can absorb these costs against a larger company base. Traditionally, the PEO contract states that all services are accomplished and performed by the PEO using their FEIN, a key difference from the ASO. Small business owners may believe they are giving up control to the PEO, however, after reviewing the PEO agreement, the responsibilities of the employer and that of the PEO can easily be defined. For example, the small business owner will continue to make hire, fire, and salary decisions yet can take advantage of risk transferrence on to the PEO.

PEOs are excellent for companies having 1 - 50 employees or for those groups that have many small pockets of employees across the United States. That being said, there are still many companies that have much larger employee counts that derive and enjoy great benefits from PEO's.

Deciding whether to go with a PEO or an ASO from an outsourced payroll model is truly up to the individual employer. A rule of thumb is to take into effect employee count when making your decision. The bottom line is that you are in control no matter which direction you pursue. First, identify which features would free up your time the most, the PEO Services Selection Tool by PEOcompare.com is a great place to start. Second, contact fellow small business owners and ask for feedback on their opinion on PEO's vs ASO's. Either way you decide to go, this type of service will almost always benefit your company in the long run.

Related Articles

  Importance of Salary Survey for the Employee and Employer
  Is Workers Comp Better With a Professional Employer Organization or is Pay as You Go a Better Option?
  Four Key Distinctions between between HRO and PEO Services
  Stumped by SUTA: PEO Company to the rescue
  5 Questions Every Employer Should Know about Professional Employer Organizations (PEO)
  The Diary of a Mad Sales Person
  Speak Everywhere
  Employers: What is a professional recruitment service?
  What is an Adaptive Organization
  Big Data- Is it for you?
  Flexible Work Arrangements: Why Should You Offer Them?
  Small Business Employee Motivation and how Professional Employer Organizations Can Help
  Let a PEO Reduce Your Liability
  Bullying
  Employee Recognition Programs
  Wearing Two Hats Costs A Sales Professional Sales
  Religious Accommodation…Keeping the Balance
  Outsourcing and IT Services
  Professional Employer Organization Disadvantages (actually Myths)
  The Fair Labor Standards Act: What You Need to know

Related Forum Posts

Accessing the Canadian Market
Re: Service Or Product?
Introduction
Who Said Twitter Doesn't Work...?
Re: NEW VIDEO - Marketing Strategies - How can you make a common

Share this article. Fund someone's dream.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Common Sense Stress Management

6 Ways To Generate Lucrative Business Ideas

The Importance of Master Data Management (MDM)

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.