What is ASO?
A Business Owner’s Dilemma
If you’re a business owner, there are lots of administrative tasks that cross your desk on any given day and can lead to rabbit trails of paperwork and protocol. From online payroll services, direct deposit payments, and payroll data, there are thousands of ways your payroll service could go wrong.
Small business owners especially can feel as if the paperwork is never-ending.
There’s always one more form to sign, one more law to consider, and one more complaint to file. You love your business, but the business administration side?
Not so much.
Although administrative work is necessary, it can be frustrating when you want to focus on your business itself instead of all the hoops you have to jump through to keep things running smoothly.
As a business owner, you shouldn’t have to concede the joy of running your business to the pain of keeping it running.
The Right Solution
That’s where a service like an administrative services organization (ASO) comes in. ASOs provide administrative and online payroll services for businesses to alleviate the need for business owners to handle these extraneous tasks on their own.
Using an ASO can save you lots of time and even money as you are able to focus more on your business services or products and big picture and less on the business details and paperwork.
You need both to make a business function, and sacrificing one for the other is never going to end well.
Find Convenience in ASOs
Instead of choosing to solely focus on your business’s big picture and let the details go undetermined, work with an ASO to achieve the best of both worlds.
ASOs are incredibly diverse and specified services, so they can look a lot of different ways depending on the organization.
However, generally, they include a certain set of services and benefits for a business owner.
Here are some of the main aspects of an ASO to consider when you’re looking for the right fit for you and your business.
Administrative services
When paying employees and making sure their experience working for you is ideal, human resources can be a huge drain on your limited administrative services resources as a small business.
Answering questions from federal to state employment law, protecting your business, and working within the ethical confines of what is right for both you and your employees is often overwhelming.
It’s a necessary part of running a business, but it’s not necessarily an element of your business that you can handle on your own.
Luckily, ASOs can provide you with HR support services whenever you need them.
These administrative tasks include drafting policies and handbooks, handling harassment and discrimination claims, and documenting and presenting analytics for workforce including retention, cost of hire, and equal pay. An ASO can provide most payroll services.
ASOs can also provide administrative services that aren’t so easily quantified.
In today’s society, it is more and more difficult to promote a culture of positivity in your workplace and a world that seems to constantly change and grow darker by the day.
Improving your culture and workplace is an aspect of HR administrative resources that an ASO can offer to you as a business.
While you might not be professionally trained in creating a positive work environment, you know your employees deserve an environment where they’re valued. Making that happen takes skill and careful implementation of protocol. A positive work environment can change everything from employee retention to employee success and productivity.
If you’re paying employees well and they’re working somewhere that they want to be, they won’t have nearly as many complaints. Fostering that positive work environment is something that an ASO can take over for you so that you can focus on what you love most.
Unfortunately, even if you have a positive work environment, it’s likely that there will be complex situations that arise in the workplace that you will need to handle as a business owner or manager. But with the right tools and protocols, ASOs can help with those as well.
By providing the professional manpower that your company needs to handle complex work interactions or conflicts, an ASO can save you from the time and hassle of handling a difficult situation.
As a business owner, you might want to be hands-on with your employees, but settling their conflicts without the resources of an HR professional can escalate the conflict and end in a poor resolution or no resolution at all.
When you choose to work with ASOs, you know that your employees are going to be in the right hands.
Think about it like this: you might care a lot about your employees’ health and well-being, but you don’t sign up to be their healthcare provider. Instead, you offer them medical insurance. In the same way, an ASO can provide the conflict resolution assurance that you need without drawing on your resources as a business owner.
And conflict resolution isn’t simply finding peace between your employees. There are federal and state regulations that keep conflict resolution organized and confined to acceptable processes and methods.
Following these rules and updates that are constantly changing is more pressure than a business owner should put on themselves and expect to see success.
Instead, let professionals who know the federal and state regulations take that burden from you.
Online Payroll services
Outside of federal and state compliance, payroll services are the top benefit of ASOs to small businesses.
Payroll service providers include managing employee payroll taxes, W2s, direct deposits, and 401ks for your employees.
Beyond individual employee needs, payroll service providers include government regulation compliance with bodies like the PPACA, IRS, and ERISA. Payroll services – and following the ever-changing federal compliance regulations – are hardly ever enjoyable tasks for business owners, but sometimes a business owner will elect to manage payroll services themselves anyway.
If you choose to manage your own payroll taxes and payroll services for your business instead of working with payroll service providers, there’s absolutely nothing wrong with that, but it’s crucial that you understand just what exactly is involved in your choice to forgo an ASO or another HR alternative.
Payroll Taxes
Taxes, the bane of every business owner’s existence, cause unending anxiety come April. They’re required for individuals. They’re required for employers. They’re required for businesses.
As an employer, you are responsible for taking out the correct percentage from your employee’s paycheck and sending it to payroll taxes.
Right?
But what if the “employee” is technically operating in a contractor position?
Contractor payments and employee direct deposit payments are constantly being redefined as terms within the legalese of legislation, and what the courts ruled in any given month can change how you handle your employee tax process. In the same way, your own need to send payroll taxes can fluctuate immensely based on the demands of the federal regulations at the time.
Taxes are consistently an aggravation to employers because of the painstaking specificity federal compliance demands. There are so many unknowns in taxes in your payroll services for your business. With the knowledge needed to handle tax issues, an in-house employee who specializes in tax services would be required.
The salary, time, and manpower used for that in-house employee can be saved for making your business better when you choose the better option: an ASO prepared to take on the heavy workload of tax services.
W2s
Not only are you, as the business owner, responsible for providing, distributing, and educating your employees about their own W-2s, but you are responsible for filing a W-2 for the business as a whole as well.
Filing a W-2 for your business can be much more complex than filing one for an individual, and the moving pieces involved in gathering the information you’ll need for the W-2 can often slip through the cracks during a business year.
To keep track of everything and make sure that you’ll be prepared when it comes time to file your W-2s for your business, a business owner would have to dedicate hours each week to filing, organizing, categorizing, and analyzing data that would apply to the W-2 requirements.
If you don’t have that time to spend, an ASO provides W-2 services along with the many other payroll services that they offer.
An ASO can use their manpower and resources to fill out your W-2 to the letter and ensure that your business is compliant with any and all federal and state regulations.
Additionally, an ASO can help your employees understand what’s expected of them on a W-2 and how to fill it out accurately.
Direct deposits
Direct deposits are a complex aspect of any business.
While, theoretically, they exist to make your life easier, keeping up with employees’ information and changing details, bank accounts, and preferences can be exhausting.
Direct deposits provide an easy path to payroll services management, but only if you’re able to manage the direct deposits, too. A tool to make your life easier that adds more work to your plate isn’t doing its job.
Still, direct deposits are an expectation for a lot of employees, so you’ll need to enact payroll software.
To give employees the freedom to have direct deposits and to give yourself the freedom from managing those deposits, work with an ASO to manage your direct deposit processes.
An ASO service will be able to gather employee information as necessary, compile data, and streamline the process of getting money from your business to your employees.
Since an ASO also provides tax services and W2 services, having an ASO that is connected to your direct deposit system makes it even easier for them to categorize and update data for yearly tax purposes.
Government regulations
Government regulations are strict and specific when it comes to payroll services and finances in general. This makes sense since government organizations want to protect both businesses and employees from situations where one or the other can be exploited.
As a business owner, you hope to find a balance within your financial processes so that the workflow is beneficial to you, the employee, and the country.
Here are just a few of the government organizations whose regulations you will need to navigate in order to properly organize your company’s financial circumstances.
PPACA
The Patient Protection and Affordable Care Act demands that employers must provide accessible healthcare to their employees.
This act involves lots of regulations and specifications, and it is meant to increase general access to healthcare and encourage employers to provide healthcare access for their employees.
However, it can get complicated fast, and confusion around the Affordable Care Act has persisted through numerous revisions over the years.
IRS
The Internal Revenue Service is well known for both its prolific activity in regards to organizing and processing revenue and its oftentimes complex updates and regulations for businesses and individuals to follow.
It’s through the IRS that you’ll deposit any tax that you take through your employee payroll services in order to dedicate to federal funds.
ERISA
When employees retire, ERISA takes care of their retirement funds and provides a peaceful resolution after a lifetime of dedication to a career.
At least, that’s the goal.
You, as the employer, are responsible for making sure that money gets where it needs to and the proper protocols are followed so when your employees retire, they have a retirement system setup.
Obviously, all of these government entities have endless FAQs and call centers, dedicated volunteers and other resources for business owners trying to navigate the constantly changing protocols.
But if you are tired of figuring it out yourself and just want to pass this paperwork off to someone else and let your business thrive, an ASO is the right choice for you.
An ASO will handle your interactions with government entities like the IRS so that everything is in line and prepared when Tax Day comes.
Who does it benefit?
ASO payroll service providers can benefit lots of individuals.
Unlike a PEO, an ASO provides online payroll services and other services without co-owning your employees.
Rather, they partner alongside you in a payroll service provider capacity to answer your HR, payroll services, and administrative needs.
Because of this, an ASO is a fantastic choice for a small business just starting out.
Small businesses often need a lot of paperwork and payroll software to get started. Much of our current infrastructure as a nation is based around larger businesses, which leaves small businesses with extra loopholes to jump through to retain legal compliance with online payroll services.
Finding a diplomatic way to jump through those loopholes in your payroll service while keeping employees happy and keeping your business booming can be overwhelming for a small business owner.
Small business owners are often individuals with some form of higher education, but it’s unlikely that that education has specified in payroll service and payroll software. While it is possible for a small business owner to learn and handle the administrative tasks necessary to run their business themselves, it’s going to take a lot of time. It’s going to take a lot of effort. And, since training in various financial management tools is involved, it’s going to take money.
With everything included in preparing for government compliance, employee conflict resolution, and a sustainable time management schedule, it would be easier by far for small businesses to hire an ASO rather than handling all of that themselves.
Business owners might not need an ASO if they don’t have any employees. For many, the pandemic was an opportunity to turn over a new leaf. Small businesses that are owned and operated by one individual can become a booming success with support from social media and online resources.
With the help of fast-tracked virtual resources and paperless pay and billing, individuals who are running a business on their own might not benefit from an ASO as much as those working with employees. However, if you are an individual working on your own and you’re looking for ways to expand, an ASO might be an excellent choice to make sure that you and your employees get off on the right foot. Once you get behind on taxes or administrative services, it can be hard to catch up in a legal and sustainable way.
Additionally, if you are creating a workplace environment, you want to make sure that you’re starting off with a positive culture in your team. Employees working for an employer who doesn’t know how to interact with a positive work environment are going to have much lower levels of employee retention and general job satisfaction than those whose work environment has been carefully cultivated by an ASO.
Although you might not need an ASO if you’re an individual running a business by yourself, it could still be beneficial for you to look into an ASO if you are a particular business structure that has a complex tax situation.
If you are working as a partner with another individual underneath an LLC or paid partnership firm, knowing how to file and where to send information can quickly become complex. In those situations, it might be best to hire an ASO strictly for the purposes of making sure that your taxing processes are both legal and what’s best for you as an individual and as a company.
Your company obviously wouldn’t need HR services if it’s just you, but the administrative and financial resources that an ASO provides can still benefit you and help you thrive as a company.
Generally, an ASO is your best bet when it comes to protecting yourself, your employees, and your business in the complex and difficult world of regulating and processing administrative tasks. And the great thing about ASOs is that they are incredibly flexible and completely up to what you and your business need.
Unlike a PEO, ASOs don’t claim any ownership in your business. They’re simply here to help. And helping involves listening to your needs and structuring a unique action plan that will help your business thrive and grow even as you learn how to handle the everyday workload.
Starting a business can be a terrifying endeavor.
But it doesn’t have to be one that feels impossible.
With an ASO taking a large amount of administrative hassle off of your shoulders, you will be able to delve into the joys of business owning and experience the best parts of your new career while still following all the regulations and requirements necessary to continue federal compliance.
Alternative solutions
Hiring someone
An in-house HR representative might be the right choice for your business instead of an ASO. While an in-house HR representative will provide the same resources as an ASO, they are specifically and only working with your company.
The in-house HR representative will still focus on all of the elements that an ASO addresses, including tax management, conflict resolution, work environment positivity, payroll services, and administrative details, but an in-house HR representative will be able to specialize based on what you and your company need.
Working with someone in house might be better than hiring an ASO for your HR work if your company needs a very specific service or resource to manage your HR needs.
Some of the benefits of hiring an in-house HR representative include having a face for your HR that you know is solely devoted to you and your cause. While an ASO can still provide personalized care and value, your employees might be more comfortable with someone who is specifically dedicated to caring for you and your company.
An in-person HR representative also provides the ability for you to do in-house training. While an HR representative comes to the table with their own understanding and education as far as HR processes and protocols go, the way your company runs might be incredibly specific, and you might feel as if an ASO will not be able to adequately help you with their time and resources.
If you feel like your company is going to require high levels of specialization in order to operate your HR tasks, an in-house HR representative will probably be a better choice than an ASO.
That’s not to say that ASOs can’t handle complicated situations; in fact, they’re experts at it.
But it’s up to you and your company how specific and detailed you would like to be with your operating processes, and choosing who to work with can factor into that complexity.
If you decide an in-house HR representative is the better choice for you and your company, though, you will need to invest quite a bit more money, time, and resources than you would with an ASO.
Paying an employee salary and benefits is much more investment then hiring an ASO. Unless you have a professionally trained employee already in your team, an ASO is the cheaper option.
Doing it yourself
Instead of paying for a full-time employee or working with an ASO, you might be tempted to do it yourself.
That’s fine.
Many business owners are able to handle all of the paperwork and administrative tasks while also running their business.
Some of them simply don’t have a choice. You might not have the money to invest in a larger team right now. It might just be you and your product, and if that’s the case, doing it yourself is entirely feasible.
But that doesn’t mean it’s easy, and that doesn’t mean that you should go into it without preparation.
You should know what you’re getting into if you have decided to handle your HR and administrative needs yourself. Everything that an ASO would do will now fall on your shoulders with the exception of payroll services if you have no other employees. That includes keeping up with ever-changing tax regulations, financial protocols, customer service details, and paperwork to comply with any and all government processes. It’s not simply downloading a helpful service and filling out the boxes. It takes time, dedication, and substantial resources. If that all sounds like something you’re willing to take on as a business owner, then doing it yourself might be a great option for you. Otherwise, consider one of the many other solutions to your HR needs.
Hiring a freelancer
Outside of doing it yourself or hiring an in-house HR representative, there’s always the option of hiring a freelancer.
This option is less expensive than hiring a full-on employee and less time intensive than doing it yourself, but it still has negative elements to it. While a freelancer is going to be a professional and provide all of the resources that an ASO would offer, they’re not going to stay with you and provide full-time services the way an ASO or in-person HR representative would unless you are offering them a competitive salary and benefits.
Freelance HR representatives are fantastic if you have an immediate need that can resolve itself after a span of time.
Ideally, you would hire a freelance HR representative, get your company back on the right foot, and then resume handling the operations yourself.
But that doesn’t leave you with a reliable HR connection in your company.
Most of the day-to-day mundane administrative tasks will still be up to you or an in-person HR representative. Hiring a freelancer is definitely an option, but it’s an option that leaves you still needing more HR representation in your company.
To find a reliable freelancer, make sure that you have done your research as far as what they need when it comes to certification and education. Most freelancers should have at least a master’s in their field, and asking about prior experience and any references possible is always a good rule of thumb.
In general, freelancers can be trusted because the HR field is about individual expertise, rather than a business backing them. An individual can provide the expertise just as much as any one company. But you are taking a risk because an individual might not have the education or resources that a company does.
Just make sure to ask questions whenever you hire a freelancer for your HR support.
PEO
Similar to an ASO, a PEO is an HR outsourcing company that provides HR resources for you as a third-party service. Unlike an ASO, a PEO acts as your co-employer, which means they have more control over your employees as opposed to an ASO, which simply provides a service.
PEOs have a reason for doing this: by acting as your co-employer, they have more control and can provide more protection when it comes to risks. They absorb your risks as your HR company in a way that the ASO doesn’t have the authority to do so that if something goes wrong, the PEO can take care of it. PEOs generally don’t offer as many services as an ASO because they have to take the risk into account as their own personal liability, and they also generally cost more.
A PEO is a great option if you are able to invest more money and are anticipating their being a high chance of risky situations for you and your employees when it comes to HR protocol and potential for lawsuits.
But if your company is low-risk and looking for HR outsourcing services, a PEO might simply be too expensive and not cover enough ground to be worth it for you and your business. If that’s the case, an ASO will probably be a better fit.
Just like an ASO, though, each PEO is unique and has its own benefits that it brings to the table. If you are interested in a PEO, reach out to one, get a quote, and look into the services that they provide to see if it would be the correct choice for your business.
Why Use VertiSource?
VertiSource HR, as an online payroll service company, not only provides all of these services and more, but we also have a history of success and happy customers.
When we work with a business, we make sure that it’s about what is best for you and your situation instead of a one-size-fits-all approach.
As an ASO, we provide:
-
administrative services
-
tax forms
-
employee payroll services set up
-
small business payroll services
-
payroll reports
-
processing payroll
-
tax penalty protection
-
new hire reporting and time tracking
-
business processes and time tracking for businesses
-
HR support center
-
submitting W-2s
-
following the regulations for:
-
IRS
-
ERISA
-
PPACA
-
We are always expanding our understanding and connection to the modern events that so often shape the HR world.
Because of our ability to constantly access information, we as a society are oftentimes overwhelmed rather than informed.
Luckily, having a company like VertiSource HR whose purpose is to inform itself and utilize that information to improve the experience of other businesses can change an inundation of information into a helpful collection of resources and tools.
We take the time to keep up-to-date so that you can have the time to run your business.
As an ASO, we don’t take any ownership over your company or claim to have authority over your employees. Instead, we are simply here to help. With VertiSource as your ASO, your business will be taken care of and able to grow in ways that wouldn’t be possible if you were by yourself.
