Be Better at Business Podcast

Podcast 2 with Kristin Wynn, CFO, First Star HR

June 24, 2019 Season 1 Episode 2
Be Better at Business Podcast
Podcast 2 with Kristin Wynn, CFO, First Star HR
Chapters
Be Better at Business Podcast
Podcast 2 with Kristin Wynn, CFO, First Star HR
Jun 24, 2019 Season 1 Episode 2
Eagle Employer Services
Payroll Services vs Payroll Software
Show Notes Transcript

In this episode, we discuss the differences between payroll services and payroll software. What are the advantages and disadvantages? What should an employer know to make the best decision for their business?

Be Better at Business with Eagle Employer Services!

This podcast is available on iTunes, Spotify, and more!



Speaker 1:
0:00
Some of the things that I've seen recently are people that have come to us who tried to use apparel, software or payroll service, and that's what this company sold themselves on and it appeared to the customer that that's all they needed to buy was this software or this service. And what the client is shown was a great package, but what they actually bought was a fraction. And even with the fraction, what they still lost in the translation was the experience, the know how to help to navigate the waters of having employees.
Speaker 2:
0:44
Hello Team Eagle. You get a car, you get a car, you get a car, you get a car. We just had an awesome interview with Kristin when up at first star HR. She has more knowledge of all aspects of human resources. She's worked in the insurance part of it. She's worked on the payroll part of it. She's worked on the most complicated problems, the tax problem. She's seen it all. She's got such great information.
Speaker 3:
1:12
This is very rare that we get an opportunity to interview someone of this caliber, uh, at this level, this corporate level, with that kind of experience that may help you in the decisions that you're making concerning your company and the future. You're gonna go, wait.
Speaker 2:
1:28
Hope you enjoy the show in three, two, one go.
Speaker 4:
1:37
[inaudible] [inaudible]
Speaker 2:
1:39
welcome to equal employer services podcast where it's all about graduating from an employer by accident to an employer on purpose with them.
Speaker 4:
1:54
[inaudible]
Speaker 2:
1:54
hello, Kristin, when,
Speaker 1:
1:57
hello. Thank you for having me.
Speaker 2:
2:00
Yeah, we got Kristen when on the phone here with us with from first our HR. Um, Kristin, can you, we know all about you cause you're a rock star up at the corporate headquarters. But for listeners out there that may not know you, can you tell, can you humble brag on yourself a little bit? It's, it's okay. Cause when you humble, brag on yourself, you're helping us out.
Speaker 1:
2:22
Okay. I'm, I'll give it my best shot. Okay. Um, I have, I've been with first star hrs. Yeah, it started in that end of 2013 but I've been in the peo industry and early nineties, 92 ish.
Speaker 2:
2:40
And just so listeners know, peo industry, and when you're talking about HR, that's as hard as it gets. All the complicated problems you could ever run into, uh, are thrown your way.
Speaker 1:
2:55
Absolutely. You know, I started out, I got my feet wet in accounting, worked in an accounting firm for a long time. And then that some people in the insurance world dabbled in that, you know, understood that, understood the accounting. And it was an easy segue over into the peo world because it marries, you know, a lot of the too. So if you can do payroll, you can understand insurance and you can do accounting, you can help out a lot of people.
Speaker 3:
3:21
There you go. Yeah.
Speaker 2:
3:23
We've been a testament to that. We've, we thrown some wrenches your way,
Speaker 3:
3:27
Huh?
Speaker 2:
3:28
Oh, oh yeah. You on purpose.
Speaker 1:
3:31
It's on our toes.
Speaker 3:
3:32
Oh yeah. Well, you know, today what we want to talk about is things that will help not just our clients, but will help others that are in business out there that may be listening to this podcast and find out some things that you know about payroll, payroll systems, technologies, and things that may look good at front and they may be good. And then there may be some that are not so good and what type of systems and what things should they be looking for to get their biggest bang for their buck.
Speaker 2:
4:09
And I think if we could put ourselves in the shoes of, say, a new business owner, uh, or maybe they've been generating revenue, uh, but all of a sudden they're about to hire the first employee. And there's the decision you have to make is there's all these various payroll systems. There's payroll services, payroll, software's, there's a lot of decisions that go into that from a person that unless they're in a, in our industry and the, in the HR industry, they've never been exposed to that. A lot of these guys, they're welders are framers or who knows what. So what are some thoughts that somebody who's hiring their first employee, what are some of their options that you know of and the pros and cons of each?
Speaker 1:
4:55
Well, that's, that's a great question. Some of the things that I've seen recently are people that have come to us who try to use a peril software or payroll service, and that's what this company sold themselves on and it appeared to the customer that that's all they needed to buy was this software or this service. And what the client is shown was a great package, but what they actually bought was a fraction. And even with the fraction, what they still lost in the translation was the experience, the know how to help to navigate the waters of having employees. For example, some of the things that we see is apparel. Software is there to cut a paycheck, but at the end of the day you have to know if the paycheck is correct. Are you doing the right things as an employer, are you asking the employee to right questions?
Speaker 1:
5:56
Are you able to garnishments? How do you know where to send garnishments? If someone had a child support issue, how do you know, um, how to send a file to any state organization? Could you upload or send a text file? Could you send an unemployment file? Do you have the ability even at your bank, could you make a tax deposit? This happened with you guys the other day. You had a client that had never done it before and needed help at the last minute and was we were able to help them through, but then they became a client of yours so that you were able to show them all the things that they were missing. We've just did payroll software. There's a lot more that goes into it besides payroll that the people that sell that product, they aren't really concerned with the client and what's going to happen and all of the fees and fines that are going to rack up from a federal grant governing body or a stent governing body, all they want to do is lock someone into a contract. And um, I wish the best.
Speaker 2:
7:03
Yeah, it seems to me because I see all these programs that are like $1 check, $2 check. There's like we're, we're Walmart, we're, we'll have a lost cost leader. The, so they use like a, uh, a loss leader. I mean to, to get you in the door. We'll, they'll say, we'll print your checks for free or we'll do it for a dollar each or whatever. But once they get you in the door, then they have you on the hook for the other things. You'll need to process W2's through them. And, and those may be marked up and are in all these other functions. Um, is, is that common? I know there's, I know there's good services out there and bad just like anything, but I don't know what if that's common or an industry norm or what, what someone may want to look out for. Yes.
Speaker 1:
7:54
I do think that is something to look out for and you have to read the fine print. What is, um, whatever's been pitched to you, what does it include? And a lot of times you're right, it only allows you to cut a check. No software that cuts a check really isn't helping you because you still aren't sure whether it's a correct check. Are you violating any federal or state laws? Are you sending the right information? But then more importantly, quarterly reports will have to be filed. Um, any annual reports like Debbie two's or 10 95 or even 10 99, how does the employer, if they are a roof or a restaurant, uh, and aren't familiar with those walls, how do they distinguish between this person gets a Debbie two or this person gets a 10 99. Those things are extra. So typically what we see is a client may be not realizing what services they need. They think that a software is going to encompass all of those, but you really need a human being, a person to assist you in the process. And the software just simply can't do it.
Speaker 3:
9:06
So when you're looking for someone to do the payroll or looking for a service, you might look for s you might look for a service that offers a little bit more help. And I did to, to kind of build on what you just said, let's just say that you're a, you're a small employer under 20 employees, 20 or under employees and you run a business and you have uniforms and you have child support and there are, or you, you've been used to giving people a loan out of your pocket and then taking it and then charging it back over a period of time. What is the percentage in the, how do you know that you're doing it the proper way? How do you know that if there's tools or uniform and there's someone that is just getting not met that many hours, how much do you charge out of that check before you've charged too much out of their check and you know what kind of those kinds of things come up?
Speaker 3:
10:00
We have it in our system, but there are other companies out there. I'm sure they do. They do the same thing. But those are some things that I would think that would be important to know and they seem basic. Seems like it's no big deal. Well I loaned him some money or we'll we're gonna charge him back for his uniform, his tools. What do you, what do you see in that area as far as payroll services go or programs, whether it's uh, one of our competitors, those are things that are important for them to be able to ask.
Speaker 1:
10:33
They really are, and they're really important, especially because sometimes you could be violating department of Labor rules. You could be infringing on that person's rights or not even now. That's why I say it takes a hammer to look at sensibility for your specific needs for your specific employees. What is the right thing to do? And sometimes it's us knowing it because of our experience. We've got employees with 20 plus years experience or is it something that we're going to take the time to research because that employee has very specific situation and we need to make sure it's right. A normal service won't do that for you. Or even a basic software. It just can't, you can't build that unique situation in. So we take that extra time to make sure, you know, the employee's paychecks are correct and things are getting handled properly and if you notice something, we would bring it to someone's attention.
Speaker 3:
11:32
So those are the kinds of services you get from a peo, whether it's us or another peo. Those are the kinds of things that you get from someone who offers a complete payroll, a service, not just a a computer program that you sign up to do and then you can start learning to do it all on your own.
Speaker 1:
11:53
Absolutely. Yes. It's
Speaker 3:
11:54
from cradle to grave and allows the person to receive a paycheck and it allows the employer to sleep at night knowing that we've taken off all the headaches, the IRS notices, the state notices, everything's in compliance, it's getting filed timely. All of those headaches come off the employer so that they can do the job that their company does for a living, whether it's roofing or concrete or what have you. They don't have to worry about the administrative piece behind the scenes. Well, there has to be owners of companies out there that are perfectly capable and I know of some that are perfectly capable of purchasing a payroll program and running it themselves and are happy doing so.
Speaker 2:
12:41
I'm wondering would the only person you would recommend do the, do you yourself payroll system, like an employer that has access to somebody that knows the INS and outs? Um, there's a company is mother-in-law. She has a bunch of experience with that and he has free access to her and he utilizes her in, uh, in, that's, I think she uses one of those payroll softwares and, and gets it done. So would you only recommend that service to someone who has access to someone with knowledge or has hired somebody with knowledge of those systems on a part time or full time basis?
Speaker 1:
13:22
Well, if the person is, are you asking if they were to hire that person full time or just go ask them questions? You know, when a question arose,
Speaker 2:
13:32
I'm trying to put myself in someone else's shoes other than others to listening. See from the outside looking in, who would that work for?
Speaker 1:
13:45
Um, well, if you're a small company and let's say you only had 10 employees in your mind, you'd be saving money by hiring or just buying software off the shelf. But the bigger problem is one, validating everything that's going on with the paycheck too. Are there specific circumstances, um, that you need help on? And like you said, you could ask her mother in law, but what if you aren't aware that a specific circumstances is happening? How do you know that you need the help? You probably don't realize you need help until you get a notice. And once you get a notice or you gonna have time to stop in Your Business and answer the IRS, do you even know what can say? Do you know what they're asking? You would need someone who really has a little bit more expertise in that field. And then another thing that we've seen recently are people buying a software package or using a service. And then you've got the headache of having to set up a special bank account to run payroll. You know, if you plan on giving your direct deposit, um, that's a special feature. And you do have to pay for it at a bank or if someone else is offering it, they're going to be charging you for it. So those are hidden costs that the employer probably didn't realize that they needed to know or even ask.
Speaker 2:
15:09
I've got a hidden cost for you. So, so, so suppose suppose you thought that you were going to just hire this expert part time because they're good to do your payroll. What happens when you gotta wait on call for the government agency? Are you going to pay that person on call? Because all that, all of a sudden that becomes a very expensive phone call and you could have had an entire service for one freaking phone call. Did you say fuck you mark and phone call? Well, you can say fricking if it's the fricking government or something.
Speaker 1:
15:46
What if it's the mother-in-law and then she's not available or it's out of her area of expertise and she doesn't even know how to answer the question.
Speaker 2:
15:54
Yeah. Are they saying no, you call. Yeah.
Speaker 1:
15:59
These are the kind of problems that you're gonna run into. It seems that you don't know to ask or you don't even know that you're gonna need it. You may rock along for a year and not need it. You may not have a problem, but anytime, and you guys have seen this, anyone have, um, a client or a prospect you see when you run into them and I tell you they have an IRS notice, the first thing that we do is that say, yeah, we'll help you. We'll navigate this with you because that can be the scary thing you're going to get. And there was no parallel software out there that can help you with a notice.
Speaker 3:
16:36
Yeah. That becomes very personal, very quick and very unique to you. Not something that's on a, uh, uh, a spreadsheet or not something that's on a boiler plate, uh, that you, that everybody sees. So yeah, those, those things are very unique to you. One of the things that we notice when we go out and call on people, most people are starting business. Their business are very unique and they're very proud of the fact that they are different and each business is different. Each business has its own personality, they have their own owners, they have their own niche. And so when it comes time to do payroll and it comes time to do HR services, most people feel like how, how do you know about us? How do you know about our business? Because we're different than most businesses. And I will tell you Kristen, we are different. Everybody has a unique system and a unique personality and something unique that put them where they are. And so with your experience, what do you say to those people? Say How do you take all the different ones and all the different businesses that don't fit on a boiler plate? And how do you make that work? When comes time for payroll and when do you cut checks and who's getting what deduction? What? How does, how does that experience from your standpoint play a role in what you do?
Speaker 1:
18:04
Well, one of the things I think, and I'm most proud of about all of our employees is that we meet and listen to the client's needs. It starts there. No, everyone's job or trumping can be different, but the need is, is similar. They need a paycheck. They need, they may need to capture different pieces of that paycheck. They may need to report it to OSHA, they may need to report it to, um, their four oneK or their health plan or whatever. They have a reporting body. If we know that going into it or even later we can design and collect this information to help them. So no matter what business they're in, we're able to shave time off of if they already have someone in their office doing it because the information is being collected weekly, they need to report it to, um, you know, their GL premiums, you know, they capture information. So it's basically listening to what the client's needs are and trying to tailor tailor that so that they get what they want and they get the payroll.
Speaker 3:
19:20
In your experience, and I, and I really want to point out the, you do have really good experience in this and that is we have done, and you have done staffing companies. You've done, you've done companies that are paving companies, concrete companies, framers, roofers, uh, machine shops, restaurants, which types of businesses create the most labor on your end to take care of who, who presents the most challenges? Is that the staffing company?
Speaker 2:
20:00
Well, I'll tell you if, and making Kristen, you can take this answer and run with it if you want or maybe disagree or whatever. Staffing companies, anytime you have a revolving door of employees, that's added burden, big time. Cause that's, that's one more child support garnishment that you may need to get on the phone with their department. That's one more, uh, potential. You know, you enter their paperwork, paperwork, that's, that's an additional task each week. If you're hiring another one, another one, another one. Also, it's an additional, if they are let go or quit or anything, that's the separation that's fighting an unemployment claim. So anytime you have a higher turnover of employees, you're magnifying every responsibility times that if you have a kink in the armor and your, um, a lawyer's office with, with one secretary that kink in the armor, say in your process of hiring, entering, releasing, that's not a big deal.
Speaker 2:
21:06
If you're a lawyer's office with one secretary, if you're a staffing company and there's a kink in your process, you didn't have the right kind of paperwork with the right wording, you didn't any of that. All of a sudden you had a hundred employees, maybe not any one particular time, but say over the course of a year, you say you had a hundred employees. You know, when you add up, say a restaurant now, I think it'd be very easy for a restaurant over the course of a year to have a hundred employees. If there's a kink in the system, it's going to be a lot bigger deal to that company. So your, your question was who is a service a payroll service more valuable too. Anytime there's turnover them. So you can take, take it from there. I have to say that
Speaker 1:
21:56
you're absolutely right. Um, as far as handling on the unemployment claims to it, to, you know, the average employer, it's going to be very daunting. But you know, we have a great leader Avalon who runs our an employment department. She's got a great rapport with the state of Texas and she does a fabulous job. So unemployment for me, I wouldn't say is a something that's very complicated even with a staffing company. What I would say is the most complicated payroll we'd ever seen, Eh, is, is a group of, it's a, a family and they own restaurants and what is difficult and it's, or it's complicated. Each restaurant has its own software in the restaurant and they are feeding that information, trying to get it into a different information. So that software of ports to the state for sales tax and revenue in their quickbook file.
Speaker 1:
22:58
But they have to pull it all out and give it to us. And then we're able to upload it into the system. But the trick is one employee can be at multiple locations and they get different pay rates and they have to have different costs. And so that's probably one of the most complex we're able to handle it. But doing things like that and then make our clients lives easier so that their CPAs can file their taxes properly, can report their sales tax, they have logged also with the t a B, c that we've had to, you know, help them work through so that we can report stuff. That's probably the most complicated one because of the regulations in that industry. But unemployment and we've got a staffing company that's got 8,000 employees and you know, we've got that down to a science now. So that one's not bothering me. But like you said earlier, what makes, what sets us apart is being able to listen to what the client's needs are and trying to create a process that saves them time and money.
Speaker 3:
24:01
Payroll is tends to be a thankless job. We have one of our customers, very successful guy, and he said the reason he does it is because it's outsourcing. We live in a world where we can outsource things that we're not specializing in. And that's something that I, it's a payroll software company, or if it's a peo, each of them specialize in their product and what they do that helps make your life easier. And how much easier do you want your life? How much are you willing to take on? And how much do you want to delegate? Well, most of us like to delegate away as much as we can to keep our profitability high. And, uh, and you've seen that cause you've been with some large payroll companies, you've been with some large, uh, companies that, uh, that sell payroll services. Uh, you've been in CPA firms.
Speaker 3:
24:56
I mean, you've got a great resume with a lot of experience that you've brought to the table. And, uh, and so we, we really appreciate having you here and getting to, uh, pick your brain on what experience you have with this. So one other question I have of which I have many, but one other question I have. You mentioned the restaurant industry was a tough industry because of things. Now they also tend to have smaller payrolls per employee, which creates a, uh, more, more work to do for whoever's doing it for a lot of detail, I guess I should say. So what happens when there's hours that they work and then there's tips and then maybe they work different, maybe they work different stations, maybe there's sometimes they're not getting tips, maybe they're working where they're getting straight hourly. Do those things play a complex role in reporting payroll for them?
Speaker 1:
26:01
Not really because most of them have some system that they're able to track it. Now we are able to take that information and validate it because we have received information from people and they were putting things in the wrong columns and we were able to help them out, catch it. You know, we don't want any harm to the employee, especially once they try to file their taxes and they're incorrect, but we want to make sure we get it correct on the W2 as well. So that's not a problem for us. You know, we do have a lot of, a lot of restaurants. One of the complications. And like I said, knowing your client and knowing the needs is knowing what the CPA wants. What's the CPA looking for? The one I was referring to earlier have separate entities owned by different family members. And so if an employee is crossing over different different entities, the uh, the way it's based starts over in Texas. That's really important. You don't want to get penalize gotta stay the Texas. Um,
Speaker 3:
27:07
were you able to avoid that
Speaker 1:
27:08
Labor? Um, unfortunately if they came to a Po, yes, but this particular client was ASO. Yes we did. We sold them on the peo model
Speaker 3:
27:22
cause there's one employer of record and there's a lot of, I mean there's a lot of options. Well we have another situation that that fits right into is that, so we were up here in Denison, we're real close to Oklahoma. I mean we're 15 minutes. So there are companies up here that have employees that work on both sides of the Red River. So if, so if they're working hours on Texas side, then they go to work for a sister company or the same company. But it's on the other side of the river. Is that one of those things that takes place when you start to pay them? It may or may not.
Speaker 1:
28:04
It was when dad talked to the client and if, if we felt like the client didn't really have the right answers or the answers that we needed to help them make a decision, we would talk to the CPA. Once you talk to their CPA, you know exactly how it needs to be reported. They might have separate entities, you know, they may have something in Oklahoma
Speaker 3:
28:25
and maybe their insurance agent cause that would play a factor to their coverages. Absolutely.
Speaker 1:
28:33
You know, we try to find out as much information as possible and, and make the strategy of what we're doing and reporting bulletproof. You know, we don't want any incidences in the future where the client gets a notice. So as long as we're communicating to the client, we're communicating with the CPA, um, w we can handle every situation. As long as I've been in this business, there hasn't been a situation that we can handle. I got one the other day, um, from, uh, a family that owns hotels and Houston and they're owned by a trust. Each hotel is owned individually. Well, the tax laws changed recently and if they structure the payroll in a certain way and it flows to a trust, they get an extra tax deduction. Well, I mean that's something that a software or even another payroll company of large out of the box payroll company, they would not have taken the time to meet with their CPA to work through it. But we were able to come with a plan so that this fan, once you throw an extra 20% deduction.
Speaker 3:
29:46
Wow. So big.
Speaker 1:
29:49
It was huge. There are five hotels. Yes. Staffed 24, seven.
Speaker 3:
29:54
That's a big number. Well, we've, we've run into things similar to that and it's always about collecting information. It's always about, uh, how detailed of information do we have and do we know about the customer? So when they're looking for a payroll service or a software, they need to be aware of all the nuances that go into it. And are they feeding it the right information to be able to get the right answer? Because if you put bad information in, you don't get, you don't get the, you don't get the results that you, you think you are.
Speaker 1:
30:29
Absolutely. Well that's, that's what you get with a peo. You're getting all the expertise of every one of our departments.
Speaker 3:
30:38
Awesome. Yeah. Well there's good PEOs out there. We're not the only one. There's good PEOs that have a good service and, but just like anything, it's what fits your needs. Uh, diff, you know, it take, take the time to understand what are you looking for as a company and making sure that, that that peo or that payroll service fits the needs that you're looking for. Everybody isn't, you know, we're not the right fit for every single person out there and neither is every other peo. It, it's, it's an individual choice. It's an individual decision that you make based on your needs and what the company's providing you. And to do that, it means giving information that you might not feel comfortable giving, but you need to be able to feel open enough with the people you're working with, the tell them all the things and all the problems you're having or your fears or the things that are out there so they can, they can have a handle on it. For you,
Speaker 2:
31:39
Kristen, I think if there's the biggest nugget that we happen to hit on today is that share the information. I feel like a lot of times employers, they're not sure if they're doing something right or wrong and because they're not sure, they may even have a tendency to like withhold that because they, maybe there's a fear of being told they're doing it wrong, you know, head in the sand kind of thing. It's so much easier if, especially if you have professionals around you, share the information, share the details. There's a lot of times people want to be real general or vague like this that man go. Especially if you're just getting things set up for the first time as a new business owner. Share the details and ask the questions. Um, absolutely you hit on that and I think w you know, we're also mad at whoever, whoever it is you're working with, especially as a new lawyer who as a new employer shared the details, whether be with the CPA, whether it be with your insurance agent, whoever. Share the details of what your team talk to each other.
Speaker 3:
32:45
Yeah. They can't help you unless you tell them.
Speaker 1:
32:49
Absolutely. Absolutely. That's a great point.
Speaker 3:
32:53
Well Kristen, thank you so much. Thank you for being with us tonight and thank you for being a part of this and you were our second interview and we hope to be, we hope to have, you know, no one likes you are you are are our first, your first second. You're our first second interview. For instance, our first after that can happen. You're the first CFO we ever, well you're the first CFO we ever interviewed.
Speaker 1:
33:24
Okay, I like that. That's great. You know that anytime you guys call, no matter what kind of today or night we will help you out or help your client out solve a problem, whatever their problem is.
Speaker 3:
33:38
Awesome. We know that. We know that and we appreciate you guys. Thank you, Kristen.
Speaker 1:
33:43
You're welcome.
Speaker 2:
33:45
Thank you. Have a great evening. Good evening. All right. Bye. Thank you so much for watching our podcast today. We sure appreciate your support and whatever platform you're on, like you subscribe. It helps us out a lot. The podcast platforms they look and see how long are our supporters u t meagle watch these videos, how they interact. Do you comment? Do you like what goes on? So anything you can do to help be interactive with us. We appreciate it so much. We hoped we're providing information that's worth your while. And if you have anything in specific, if you have any ideas for future podcasts, uh, shoot us an email. I'm Mike at Eagle HRO and this is Elle Smith at Eagle HRO. Shoot us an email. We want to be part of a community. We want to be part of helping answer questions and solving problems and that if that's your, you're part of our team. If you're a listener, you don't have to be a customer. We're talking here about listeners and the community of people that are wanting to be better at business, and that's the perfect segue to our outro, and I'll let Papa Smith over here hit it.
Speaker 3:
34:52
Be Better at business with team Eagle. Cool.
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