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5 US Payroll Pitfalls to Avoid

Posted by Mai Dowdie

|

Feb 11, 2019 9:00:00 AM

5_US_Payroll_Pitfalls_to_AvoidAdministering payroll can be one of the most challenging aspects of running a business. The task needs to be completed on a regular basis. You also know it needs to be done correctly. Otherwise, you could face steep fines, penalties,and an audit.

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You’re likely aware of the rules for administering payroll in Canada, but what about US payroll? If you’re hoping to expand across the border and offer services to clients with US employees, you’ll need to know the rules there too.

As with Canadian payroll, there are many pitfalls to avoid. Watch out for these ones, and you’ll have a much easier time administering payroll in the United States.


1. One Danger of US Payroll Is Misclassifying Employees

Employee misclassification is a hot topic south of the border. Canadian staffing agencies should be particularly aware of the differences in the definitions of “employee” and “contractor.”

You might be confused by talk of 1099 employees. These workers actually aren’t employees at all, which is why there’s so much confusion. They’re contractors, and you hire them much the same way you would here in Canada.

The IRS uses a test to determine if a worker is truly a contractor or an employee. Your responsibilities are much different in either case, and misclassification can be costly.


2. The State Equation

There are other intricacies involved in US payroll. One of the complicating factors is the differences among states.

Another complication can be deciding where to pay taxes. This can be challenging if you’rehiring employees who will travel for work, or if they work remotely for your clients. You’re supposed to pay your taxes in the state where the work was performed, not necessarily where the worker lives.

You’ll want to check up on the rules around payroll in the states where your clients operate. If you’re unsure, asking for help from an expert team is a great plan.


3. You Didn’t Tally All Your Costs

The largest component of US payroll is undoubtedly the hourly wages you pay to employees. There are other costs as well, some of which you may not think of immediately.

You’ll need to check in on the costs of Social Security and Medicare. Unemployment insurance rules vary from state to state, but almost every state has some form of insurance.

You’ll need to calculate the costs of each of these for each employee. If you don’t, you could find yourself in trouble when it’s time to pay US payroll taxes.


4. You Don’t Keep Good Records

In Canada, it’s a legal requirement to keep records. In the US, the situation is a little different, but you’ll still want to make sure your record-keeping is in order.

If you’re not keeping good records, you may miss notices sent to you by the IRS. If you fail to respond to a notice, the IRS may penalize you or even audit your agency. Having a paper trail is essential, even if you take steps to avoid being audited.

Keeping good records can help you respond to IRS notices in a timely way and reduce your risk of being audited.


5. You Make Late Deposits

The IRS has a very strict schedule for remitting payroll taxes. If you’re late, you could face steep penalties. You may also trigger an audit.

Late payments are common for a few reasons. One, you may not be using the most efficient payroll processes. Two, you might not have the cash on hand to pay your remittances when they’re due.

Better cash flow management and assistance with your US payroll activities can help you. If you need a hand delivering payroll in the US, don’t be afraid to ask for help from the experts.


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Topics: Payroll

Why a Bank Loan May Not Be a Good Choice for Staffing Agencies

Posted by Laura D’Andrea

|

Jul 25, 2018 9:00:00 AM

Why-a-Bank-Loan-May-Not-Be-a-Good-Choice-for-Staffing-Agencies-compressorStarting a staffing agency is a big undertaking. The market is competitive, and it’s only heating up with unemployment at its lowest in 40 years. You’ll face many challenges in your first year and beyond.

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One of the issues facing staffing agencies at almost every turn is funding. You need consistent funds to pay your full-time employees and your candidates. You’ll also need to pay the Internet bill, the electricity bill, and so on. Your income comes from the fees your clients pay, but they’re billed in 30-day, 60-day, and 90-day intervals. Some of your clients may not always pay on time either.

In this situation, what’s the best option you have for creating consistent cash flow to keep the lights on? You may think it’s a bank loan. Bank loans can offer tax breaks and other incentives, such as lower interest rates than credit cards. You might be surprised to learn this isn’t always the best choice for staffing agencies.

The Costs of Bank Loans

One reason a bank loan isn’t always the right choice for staffing agencies is due to the costs. Taking on a loan creates a new debt for your business, which you then have to repay. Bank loans carry interest, which increases the costs of having the debt. Interest rates and market fluctuations can increase the costs of repayment as well. 

Loans can also be time-consuming. You’ll need to fill out an application. You may even need to create a business plan and present it before you can even be considered for funding. It can sometimes take months before the loan will actually be approved.

Spending this time and effort on obtaining the loan is a cost in and of itself. Time is money, as the old saying goes, so the more time you spend trying to wrangle a loan from the bank, the more money you’re actually spending on the loan.

It Doesn’t Solve Cash Flow Issues

Many staffing agencies take out a bank loan assuming the one-time injection of cash will solve their funding issues. If the issue is cash flow, however, a one-time bank loan likely won’t solve the issue. Most firms find they run through the loan money quite quickly, and then they’re right back at square one. The only difference is now they have an additional debt to pay. 

You need a longer-term solution for your business. Cash flow issues don’t resolve overnight. Instead, think about solutions than can offer you ongoing access to capital, allowing you to bridge the gaps in income and keep the business afloat.

What Can You Do?

You can see why a bank loan isn’t always the best option for staffing agencies. Now you’re wondering what the right option for your business is. 

Payroll financing is often the recommended alternative to a bank loan or even a line of credit. This alternative doesn’t require interest payments. How does it work? Payroll financing involved financing your outstanding receivables to secure immediate working capital. 

In doing so, you’ll sell your outstanding invoices to another company. They’ll give you a portion of the value of the invoice, which generates cash flow for you. They’ll then collect the invoice from your client and pay you the balance. This is a great option if some of your clients have a habit of being late with payment.

What’s Right for You?

You have more options than you think. Explore options for financing staffing agencies and talk to the experts today.

how-tse_s-back-office-support-helped-a-staffing-agency-expand-nationally

Topics: Payroll

How Important Is Payroll Financing in the Contract Staffing Industry?

Posted by Anna Mastrandrea

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May 4, 2018 9:00:00 AM

How_Important_Is_Payroll_Financing_in_the_Contract_Staffing_IndustryEntering the contract staffing industry can be a lucrative venture, so long as you have the infrastructure to sustain your business. With an ever-increasing number of Canadian professionals looking to achieve more flexible work in the gig economy, a competitive firm has its pick of a high volume of skilled contractors to offer. Yet, with a high volume of contractors comes a greater demand for biweekly and sometimes even weekly payroll.

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You’re probably already well aware that clients’ pay schedules won’t always line up with yours perfectly. In fact, in most instances, your clients will have pay schedules that run from 45 to 90 days. While you could wait to pay your contractors until you receive payments from your clients, such a practice will prevent you from landing and retaining the best contractors.

So, how important is payroll financing in the contract staffing industry? The answer is that it’s imperative. Read on if you want to know exactly why you should secure financing that can handle the rigours of Canadian contracting.


Traditional Solutions Are Inflexible

While you might think you have the options of opening a line of credit with your local bank or engaging a factoring firm, these solutions are costly. These solutions actually put your staffing firm at more risk because neither of them can account for the fast-paced growth of the contract staffing industry.

Lines of credit, for instance, can solve the problem of steady cash flow initially. But the amount you’re cleared for by the bank is limited and won’t be easy to negotiate if your firm sees sudden growth. Lines of credit also don’t afford you much room to work with if your firm experiences a slow productivity season. Although interest rate might be lower than your standard credit card, the costs of a line of credit will compound over time.

Factoring firms, which can advance most of your invoice amounts and focus on your clients’ creditworthiness instead of your business’, only sound like a more stable option than lines of credit. In truth, factoring firms often charge anywhere as high as 6 percent of your invoice amounts and require you to share in your receivables risk. These service fees, coupled with no insurance should your clients prove untrustworthy, don’t meet the needs of your contract staffing agency.


Payroll Financing Means Stable Pay Scheduling

When you have access to payroll financing that’s designed for a staffing firm, you have the means to pay your contractors on a consistent schedule. Back office service providers like The Staffing Edge have years of experience in financing solutions for the Canadian contracting industry.

You’ll receive payroll insurance that’s flexible to your firm’s needs and the ability to customize your pay schedule. You’ll always have the money you need to pay your contractors, with low interest fees. This offers greater stability.


Credit Checks Prevent Untrustworthy Partnerships

Lastly, payroll financing is able to account for potential untrustworthy clients who might default or pay late often. Providers can also offer pre-emptive credit checks on prospective clients. Whether it’s due to fluctuations in the market, productivity slowdowns, or just plain bad luck, there are going to be times where clients might be worse off than they project to your firm. You need an option like credit checks to give you vital insights into their credit history.

With financing obstacles out of the way, your firm can unlock a lucrative revenue stream with contract staffing. That’s why securing your payroll financing is of paramount importance.


Everything You Need to Know about Starting a Successful Staffing Firm

Topics: Payroll

How Much Is Your Agency Spending on Payroll Processing?

Posted by Laura D’Andrea

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Apr 30, 2018 9:00:00 AM

How-Much-Is-Your-Agency-Spending-on-Payroll-Processing-compressorYou must ensure that you can pay your workers on time, every time, despite the predicament of upside-down cash flow in the staffing industry. That being said, securing proficient payroll processing shouldn’t cost your staffing agency a significant amount. Often, agencies end up spending too much with the best intentions of keeping their payroll efficient and consistent. Your agency might be caught in a similar cycle of spending to stay on top of processing without realizing there are more affordable options available. 

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If you’re concerned about how much your agency might be spending on payroll administration, keep reading. There are effective solutions to overspending on payroll that can save you time and money.

Why a Line of Credit Isn’t an Ideal Solution

The main issue with payroll processing is that there often isn’t enough cash to keep a consistent pay schedule. You know the consequences of breaking your workers’ trust, however, so you seek a solution like a line of credit to make up the difference when your clients can’t pay you on time or they default on their payments. 

While a line of credit will provide you with cash at the outset, issues will soon arise if you rely solely on this solution. For one, you cannot predict the ups and downs of temp and contract staffing. If your agency sees sudden growth, you cannot count on the bank to increase your line of credit when you need it most. There are also interest fees to take into consideration, which can add up incrementally over time and will certainly become a problem if your agency experiences a slow season for staffing. 

A line of credit isn’t the worst solution for your payroll admin, but at the most, it’s a short-term fix to an ongoing issue.

Factoring Firms Mean More Gambling with Service Fees

Another solution your agency might be implementing is a partnership with a factoring firm. There are advantages to using a factoring firm over a line of credit, including advances of 70-90 percent of your invoice amount and no credit checks. With a factoring firm, you don’t have to wait on your clients’ payments (which could vary between 30 and 90 days) before processing payroll, but you will still be stretching your resources thin. 

Why? Because the catch of selling your invoices or accounts receivable to a factoring firm is that your staffing agency must remain financially sound enough to handle the considerable service fees. A factoring firm typically charges anywhere from 2-6 percent of your invoice amount. 

In other words, factoring firms could work as a stopgap measure while you work to build up enough of a roster of candidates and clients, but you’ll always be wrestling with service fees.

Partnering with a Back Office Services Provider Accounts for Flexible Needs

Your agency needs a payroll processing solution that won’t keep you in the red to ensure cash flow. Partnering with a back office services provider that knows the staffing industry can account for the flexible needs of your agency.

A provider like The Staffing Edge offers versatile solutions in the form of financing, receivables insurance, credit checks for prospective clients, and outsourced payroll processing and bookkeeping.

You’ve worked hard to establish your staffing agency. Make certain you have the payroll processing tools to help you compete with the big staffing firms.

Things You Need to Know When Starting a Temp Staffing Agency

Topics: Payroll

What to Do If Your Staffing Firm Is Struggling to Pay Its Workers

Posted by Karen McMullen

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Apr 27, 2018 9:00:00 AM

What-to-Do-If-Your-Staffing-Firm-Is-Struggling-to-Pay-Its-Workers-compressorPaying your workers on time is important for keeping morale and performance levels high. You’re also legally obligated to pay them correctly and on time. 

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Yet, beyond keeping up with Canada’s constantly evolving business legislation, sometimes it can feel next to impossible to pay your workers according to a strict schedule. Staffing firms face unique troubles with cash flow and payroll administration. Constantly operating in the red isn’t feasible long term. So, what’s the solution if you’re struggling to pay your workers? As it turns out, you have several options to choose from.

Obtaining Payroll Insurance

Cash flow for a staffing firm is upside down. You need to pay your workers before your clients pay you, often leaving you in the red. 

Payroll insurance is a solution for instances when your cash flow is restricted because of various circumstances. A back office services provider will give you access to a bank account that will pay your workers according to a custom schedule set by you. You can rest easy knowing that in the instances when a client defaults on payment or operating costs mount up during a busy season, your workers are always taken care of.

Outsourcing Payroll and Bookkeeping Administration

Back office service providers can also take over your payroll and bookkeeping duties. Outsourcing is one of the best strategies for maximizing cash flow. 

The less time you have to spend on payroll and bookkeeping, the more time you’ll be able to spend on generating new business to pay your workers. 

In addition, back office providers can even handle custom invoicing, client account inquiries, and invoice delivery. This will help ensure your clients pay on time, so you can pay your workers.

Running Precautionary Credit Checks

Many headaches with late or defaulted payments can be prevented with a credit check, which will give you a good indicator of whether a client has a good credit record and will be likely to pay you on time. Together with regular inquiries into account statuses, credit checks can help keep revenue flowing into your business.

Sometimes, there might be unforeseen circumstances your business cannot account for, such as a client falling on hard times after you’ve already entered into a contract with them. But you will have payroll insurance to fall back on in those instances and administration to help keep clients accountable when they are able to pay you again.

Your payroll solutions must be flexible and able to withstand the demands of the staffing industry. Knowing how to pay your workers, even when you’re experiencing issues with cash flow management, is key to starting (and growing) a successful staffing firm.

Things You Need to Know When Starting a Temp Staffing Agency

Topics: Payroll

5 Ways Staffing Agencies Can Stop Payroll Liabilities Before They Happen

Posted by Mai Dowdie

|

Apr 13, 2018 9:00:00 AM

5_Ways_Staffing_Agencies_Can_Stop_Payroll_Liabilities_Before_They_Happen.jpgThe first year or two of growing a business in any industry can be rough, but the staffing industry has it rougher than most. Right from the start, a staffing agency’s cash flow s upside down. You’re often at the mercy of whether your clients’ pay schedules line up with your agency’s payroll.

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Ultimately, your cash flow determines your ability to pay your workers. To succeed in the staffing industry, your agency has to become proficient at preventing payroll liabilities because that’s what will help you retain your valuable talent and grow your resources, not to mention uphold your brand’s reputation.

Read on to learn five ways you can stop payroll liabilities before they happen.

 

1. Credit Checks

Before you enter into contracts with your prospective clients, you should have the ability to run credit checks on them. There’s nothing worse than finding out a client can’t pay after you’ve started hiring workers for them.

The importance of this pre-emptive strategy can’t be overstated. Credit checks can tell you whether a client’s financial history is spotty with fraud or poor credit, as well as how much financial stress that client is dealing with. While credit checks don’t guarantee a client is 100-percent trustworthy, you’ll have a much better impression of how likely (or capable) they are to hold up their end of the deal.

 

2. Timely Invoicing

Payroll liabilities can also result from your agency’s lack of timely invoicing. Being able to invoice clients and pay your workers according to a consistent schedule greatly improves your brand’s professional credibility.

Adhering to a punctual pay schedule also motivates clients to pay their bills on time; they’ll see you value timeliness. A back office service provider can take over invoicing for your clients to ensure you’re not holding up accounts receivable.

 

3. Account Status Inquiries

Part of ensuring your working relationships with your clients remain smooth is periodically checking their account status. You can’t rely solely on a “one-and-done” credit check for your clients. Maintaining effective payroll administration means checking in to see that your clients are still capable of meeting your payment terms.

Periodic account status inquiries, made around the time of invoicing, help you keep your clients accountable. Inquiries can also help you renegotiate payment terms with clients if they have a good track record with you and have perhaps fallen on hard times.

 

4. Compliance Expertise

If we’ve learned anything about Canadian business legislation in the past year, it’s that you can always count on it to change.

Whether accidental or otherwise, non-compliance can be costly, both to your resources and your legal reputation. Your agency should have access to compliance experts so that you remain in the know and avoid payroll liabilities.

 

5. Receivables Insurance

There will be times when late payments will be unavoidable. When this occurs, you need to have a back-up plan in place so your workers are still paid on time. Receivables insurance is an ideal back-up plan, one that gives your agency access to a bank account that’s able to cover your payroll in the instance that a client defaults on a payment.

Your best bet for covering all bases is to partner with a back office services provider. Providers like The Staffing Edge act as an extension of your customer service team and can offer all payroll financing strategies mentioned above and more. Gain access to tools that can help you run a successful staffing agency.

 

Starting a Staffing Agency

Topics: Payroll

Why You Need to Ensure Payroll Compliance for Your Staffing Firm

Posted by Ray Gonder

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Mar 12, 2018 9:00:00 AM

Why_You_Need_to_Ensure_Payroll_Compliance_for_Your_Staffing_Firm.jpgPayroll compliance should be an imperative for your staffing firm. While your core duties (generating sales, sourcing talent, and so on) are what drive your business, your agency won’t make it very far if your financing is in disarray. Payroll is also how you build trustworthy relationships with your salespeople, talent, and, by extension, the clients your firm’s talent is working for.

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When payroll compliance isn’t maintained, you’ll be on the fast track to ruining your staffing firm’s chances for success. That statement might seem hyperbolic, but when you take a hard look at the impacts of non-compliant payroll, everything gets put in perspective.

Read on if you want to know why prioritizing payroll compliance is in your staffing firm’s best interests.


Prompt Payments Boosts Quality of Work

Your salespeople and talent are the keys to expanding your network of clients. Being paid on time every time does wonders for boosting the motivation of your salespeople and talent to produce their best work. Productivity levels will be kept high as well because your talent and salespeople can literally bank on your ability to maintain payroll compliance.

Think about a time in your career when, for whatever reason, you were paid late. After weeks, perhaps even a month’s hard work, being told to wait for your paycheque is both damaging to your self-esteem and your personal finances.

In demanding lines of work like staffing or working as an independent contractor, a late or missing paycheque can crumble trust with an employer. I’m sure you can guess what happens when workers are dissatisfied and untrusting of whether you’re going to pay them what they’re worth. This is why securing financing for your staffing firm is so important.


Avoiding Late or Failed Government Remittances

Non-compliant payroll also impacts your staffing firm from the standpoint of whether you’re able to meet the standards for government remittances. The Canada Revenue Agency (CRA) has zero tolerance for late or failed remittances and it will penalize you with interest for amounts owed. Your staffing firm simply can’t afford to be lax with its payroll deductions (i.e., income tax, CPP, EI) and remittance schedule.

If you find mistakes are being made regularly with regards to proper deductions and remittances, your staffing firm should consider outsourcing its back-office services to experts. Compliance for Canadian staffing firms can be tricky to stay on top of, and regulations are subject to differences across provinces and territories.


Protecting Your Business Brand

These days, it’s not just employees who need to worry about their branding. Employers have experienced a major crackdown in recent years for non-compliant behaviour. While your staffing firm might be struggling to keep up with admin duties, if you become a repeat offender, the Ministry of Labour could penalize your firm in more ways than one.

Labour blitzes to check for non-compliance have become more frequent in recent years, and if your payroll compliance is found to be willfully negligent, you could be prosecuted for it. Wage theft and tax evasion are serious crimes. In most cases, however, your staffing firm (especially if it’s relatively new) might just be trying to get by and save its resources by trying to juggle back-office admin and front-office sales duties.

Back office service providers can take over payroll admin and compliance, so you can focus on competing with the big staffing firms.

Ensuring you payroll is compliant on an ongoing basis helps your firm thrive.


Everything You Need to Know about Starting a Successful Staffing Firm

Topics: Payroll

What Contract Staffing Firms Must Know about Statutory Holiday Pay

Posted by Chelsea Henry

|

Dec 13, 2017 9:00:00 AM

What Contract Staffing Firms Must Know about Statutory Holiday Pay--.jpgContract staffing firms have it made right now, as workforce flexibility is desired by both clients and candidates. But before you can see steady growth as the go-to source for contract staffing, you must ensure payroll compliance is up to par. If you’re not careful, you could find your firm stuck in a pattern of “one step forward two steps back” with the CRA.

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A good example of what can trip up your compliance is statutory holiday pay. Independent contractors are governed according to a different set of rules than employees are when it comes to public holidays, and Canada has quite a few of them. And with different holidays recognized in different provinces, you’ll want to be sure you have the rules straight before you’re blindsided.

Check out our roundup of what contract staffing firms must know about statutory holiday pay.

Proper Classification Determines Holiday Pay

First off, you need to be aware of the fact that independent contractors, being self-employed, aren’t paid statutory holiday pay. An independent contractor can work holiday pay into their pricing for their contracts, but their clients don’t have to pay because they aren’t on their payroll. This situation can turn murky fast, however, if you’ve misclassified your independent contractor. 

Make sure you use CRA’s four-point test (control, ownership of tools, business risk, and integration of activities) to make sure you’re dealing with independent contractors, not employees. According to the CRA, independent contractors might still be considered employees even if they’ve agreed to contracts, submit invoices, and use their own tools. If you fail the four-point test, then the onus is on your firm to pay them any statutory holiday pay earned. 

Misclassification, whether willful or accidental, comes with legal consequences, in addition to liability to pay holiday wages. But what exactly would you have to pay your contractors if they did prove to be misclassified?

Qualifications for Typical Statutory Holiday Pay

For an employee, public holiday wages are based on their regular wages earned plus vacation pay, payable within four weeks before the workweek in which the public holiday occurred. This amount divided by 20 is the employee’s entitlement. An employee must meet certain qualifications to earn this entitlement, however. 

To qualify for stat pay, an employee must follow the “Last and First Rule.” The rule states an employee must complete their last shift scheduled before and after a public holiday. If the employee fails to do work one of these days or both, they don’t qualify for stat pay. 

Two notable exceptions to this rule include when an employer agreed to let an employee take the day off prior to the public holiday and when employees worked their scheduled shifts before and after a public holiday but were on vacation, leave, or laid off. In some cases, an employee will be entitled even if they fail to work the first or last day before the holiday but have a proven reason for the time off.

Avoid Compliance Woes with a Back Office Solutions Provider

What you need to keep in mind regarding all the above is that if your independent contractors are misclassified and you fail to pay their statutory holiday pay, that amounts to wage theft. Your contract staffing firm’s reputation is at stake. Your resources could inevitable dwindle due to any fines imposed by the Ministry of Labour or CRA.

Your contract staffing firm has major potential to unlock a lucrative revenue stream in Canada’s ongoing gig economy. Your potential growth may be stunted, however, if you fail to properly classify your workers. Consider engaging compliance experts who have decades of experience in keeping pace with Canadian business legislation. You’ll be saving your business’ reputation and ensuring your skilled contractors are served fairly!

Unlock a Lucrative Revenue  Stream With Contract Staffing

Topics: Payroll

Got a Temporary Workforce? Here are 3 Ways to Manage Your Payroll

Posted by Laura D’Andrea

|

Sep 4, 2017 9:00:00 AM

Got a Temporary Workforce- Here are 3 Ways to Manage Your Payroll.jpgWhen your staffing firm focuses on a temporary workforce, you need payroll solutions that will account for your business’ unique challenges. Since staffing firms operate with a database of candidates and clients that can and will fluctuate throughout the year, traditional banking solutions like lines of credit are not viable for the long term.

Download "10 Things You Need to Know When Starting a Temp Staffing Agency"

Despite the uncertain picture painted above, there are feasible options for temp staffing firm payroll. Below find three ways you can manage your payroll so that your cash keeps flowing.

1. Cash Flow Budgeting

Starting a successful staffing firm takes a lot of know how, and one of the most vital pieces of knowledge you can learn early on is about payroll financing. The trick is to be very meticulous about your bookkeeping and stay aware of your overhead. While the staffing industry is on the rise, it will take time for your firm to soar to the top of its competition.

At the start of running a staffing firm you can afford, and in fact should, try to remain on the frugal side of budgeting where applicable. As noted by LinkedIn’s Global Staffing Trends Report for 2017, 80 percent of a staffing firm’s typical budget is devoted towards tools that will help their brand grow faster. Things like job ads, sourcing software, and business development are important (but focused) expenses.

2. Factoring

This second option can be a step in the right direction when managing your payroll. Factoring is when an outside financing firm buys your temp placement invoices and takes a small but incremental percentage (anywhere from 2-6 percent). You can’t rely on strict budgeting forever to grow your new firm’s capital, and in the instances where the percentage is small factoring can help you maintain cash flow.

Staffing firms with a temporary workforce are reliant on the loyalty of the clients they provide a temporary workforce for, however. If we lived in a world where client payments were guaranteed to be punctual per every placement, then other traditional payroll solutions like factoring firms would be ideal.

But since factoring firms extend credit not to you, but to your clients to ensure their ability to pay, you are highly dependent on clients’ pay schedules. What’s more, your staffing firm’s weekly or bi-weekly payroll schedule might vary widely from your clients’ schedule.

3. Outsourcing Your Back Office Duties

You might be wondering if outsourcing your administration will solve your payroll issues. Well, look at what your back office costs. You have your staff and your temporary workforce to worry about, not to mention compliance with government remittances and associated fines when you overlook any employment standards. Your back office duties are also time consuming and distracting from the core of your business, which means your competitors that have more resources and experience get to the talent in your niche faster.

Outsourcing all these duties to a provider with expertise in administering temp staffing firms, takes care of all money-sucking aspects of your business in one fell swoop. Providers like The Staffing Edge have years of experience in handling a firm’s payroll for all workers. We know that pay structure and legislation are just as consequential as the cash flow itself. The Staffing Edge has even developed award-winning proprietary software that streamlines payroll and compliance with applicant and client management.

When you can both accelerate the process of payroll management and remain compliant with government standards, your staffing firm can compete with the big staffing firms. Payroll management is about being able to see the big picture of your overhead for the front and back end of your business, and finding a solution that balances financing between both.

Everything You Need to Know about Starting a Successful Staffing Firm

Topics: Payroll

How to Avoid Temp Staffing Payroll Mistakes

Posted by Chelsea Henry

|

Jun 2, 2017 9:00:00 AM

How-to-Avoid-Temp-Staffing-Payroll-Mistakes.jpgPayroll can be complex and time consuming, but mistake scan result in serious consequences. Time sheets can be tricky to maintain and keep track of, while miscalculated taxes and pay miscalculations can be damaging to your business reputation. When hours and wages vary among staff, it’s important to keep organized and on top of payroll. 

Temp staffing payroll is different from permanent staffing, presenting different issues to deal with and the possibility of different mistakes made. Keep reading to learn how to avoid payroll mistakes for temp staffing.

Have Proper Financing

Staffing firms can invest in payroll financing specific to this sector. Payroll financing for temp staffing ensures adequate cash flow so you’re always able to pay your temporary employees. A lender finances your slow-paying invoices for immediate cash, giving you the funds to cover payroll expenses and other costs. 

Firms submit clients’ invoices with a copy of the time sheets. The financing company will advance a percentage of the invoice and deposit the funds to you. Once the client pays the invoice, the remaining amount is then deposited by the financer. 

With financing, you can always ensure your temp workers are paid without missing a pay period. This keeps employees happy and your business reputation sound. Payroll financing gives your firm the financial security of having the necessary capital to meet obligations, plus flexibility for your firm to grow.

Hire an In-House Pro

Another option to avoid payroll mistakes is to hire an in-house payroll clerk who is specifically dedicated to managing temp staffing payroll. Hiring on-hand staff means you’ll have a person with specific training and dedication to the position, along with immediate availability to expertise at your fingertips.

You won’t have to worry about you spending time on payroll or wonder if you’re calculating it properly. 

An in-house clerk comes with the knowledge and skill to ensure temp staff are paid correctly and on time. Having a payroll clerk on staff will give you the ability to quickly deal with any issues that arise or discrepancy in payroll. 

With a payroll clerk easy to reach, you take the workload off your plate to get back to your agency’s main duties. A payroll clerk handles the compliance issues and other related matters to ensure accuracy and reliability. Hiring a dedicated employee to handle this aspect saves you time, and relieves some in-house pressure of doing it yourself.

Outsource!

The final option is to remove this department entirely from an in-house capacity, and get more done by outsourcing to a back office provider.

Experts take care of the payroll process and administration, from ROEs and T4 forms to tax deductions and remittances. They’ll handle your temp staffing payroll tasks with expertise and ease, giving you a chance to relax and focus on recruiting and customer service.

A back office provider dedicated to the staffing industry fully understands the unique needs and challenges of your firm to deal with any issues associated with temp payroll staffing. Back office providers create a partnership of understanding and communication, making it easier to manage temp responsibilities. Cost effective, accurate, and efficient, these providers have the experience to guarantee your temp staffing payroll is error-free and in line with government standards.

You’ll always comply with the current payroll and tax regulations to avoid penalties from non compliance and mistakes, and you’ll save on time and the expense of employing in-house staff. Maintain astrong business reputation and avoid the government’s bad side by working with a back office provider to verify your temp staffing payroll meets all the right marks.

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Topics: Payroll

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