Academic journal article Journal of Accountancy

Selecting a Professional Employer Organization

Academic journal article Journal of Accountancy

Selecting a Professional Employer Organization

Article excerpt

A professional employer organization (PEO) can help a business attract and retain a productive workforce, manage employer risks and relieve owners and key staff of time-consuming administrative and regulatory compliance burdens (see "On the Wave of a New Industry," JofA, Mar.98, page 75). However, outsourcing these responsibilities to a PEO is not without risks, and choosing the right service firm is critical for success. The following evaluation guidelines will help you or your clients select the best PEO.

* Can the PEO meet your specific goals? Remember, sales brochures and fancy proposals may be deceptive. Always ask for client and professional references.

* Investigate the competence of the company's internal staff. Inquire specifically about the experience and depth of the staff that will be serving your company.

* Check the firm's financial background, including bank and credit references. Ask the PEO to prove that it pays its own payroll taxes and insurance premiums in a timely manner.

* Make sure the PEO adheres to important ethical, financial and operational standards, such as those established by the Institute for Accreditation of Professional Employer Organizations. …

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