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Upgrading your human resources functions

June 26, 2019 By    

I’m the chief cook and bottle washer at our business. It’s less accurately called president or co-owner on business cards. In big corporate America, I had an HR staff of over 40 dedicated professionals who took care of paperwork, onboarding, offboarding, training, payroll, benefits, evaluations, talent management, succession planning and even basic coaching.

I did not realize how spoiled I was until I became active in our propane business about five years ago. We used a basic payroll processing service, tracked time with timecards (but not a time clock). Payroll expenses were entered manually into the general ledger, and our 401(k) plan was a huge time-sucker to administer. In a word, it was a mess.

Fast forward to today:

Onboarding – We use a cloud-based payroll service that provides digital onboarding services. The employee completes all necessary paperwork online and submits it online, including required tax and other government documentation.

Benefits – Our cloud-based digital payroll service administers our benefits for us, including our 401(k) and profit-sharing plan, health plan and supplemental hospital plan, and vacation policy. We plan to add commuter benefits, health care savings and dependent care and flexible spending accounts beginning next year.

All payroll deductions and employer payments (except health care premiums for state regulatory reasons) are handled as part of the payroll service.

Time sheets – Our employees track their time using a smartphone app that requires them to have the phone GPS enabled while on the clock. We know where our employees are at all times when they are working for us. These time sheets automatically track regular time, overtime and other types of hours. The app synchronizes to the cloud-based payroll service.

Payroll – Needless to say, payroll is fully digitized. Once hours, commissions and other items are loaded in the cloud-based payroll service, it prepares pay stubs, calculates withholding (including garnishments and child support payments), withdraws cash from our account, directly deposits net pay into employee accounts and makes payments for all benefit plans and even some third parties (except for the health care plans, as mentioned earlier).

Integration – Manual general ledger entries are a thing of the past. As much or as little detail as desired may be mapped to your chart of accounts.

Compliance – Compliance goes well beyond the to-be-expected employment tax reporting and payments. State-mandated new hire reports, workers’ compensation insurance, labor law posters, federal and state benefit plan returns (Form 5500 for readers who are real tax nerds), summary plan descriptions, change in family status reporting for health and welfare benefit plans, enrollment period management and other compliance matters all are taken care of.

Employee ease of use – Our employees can log into the payroll service to conduct all sorts of business, including address changes, changes in family status, pay stub review and downloads, Form W-2 review and downloads, health plan activities and benefit plan claims. They have similar access to their 401(k) and profit-sharing plans and can look up payroll contributions, company contributions and matches, investment performance and all kinds of other information. Finally, at the end of the year, employees who use tax reporting software that accommodates digital downloads can download their Form W-2 information without hen-pecking the information into their tax software.

The net effect of these software and cloud-based service tools is that you can spend a lot less time washing bottles and more time in your role as chief cook. And employees are happier because the benefits and ease of use that you provide them are at a level usually only found in large companies.

If you already have a team that does this work for you, automate their functions and shift them away from the clerical work toward more high-end, value-creation (or cost-reduction) activities. We estimate that these tools save us hundreds of hours of bottle-washing for less than $2,000 per year. What are you waiting for?


Christopher Caywood is a co-owner of Caywood Propane Gas Inc. in Hudson, Michigan.

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