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As entrepreneurship goes, such tasks as payroll processing and benefits administration usually appear to be at the bottom of the to-do list. It’s natural that most executives want to concentrate on the main processes that are related to revenue generation. Therefore, in order to sustain their business processes and avoid legal complications, plenty of companies turn to BPO services.
Right now I’ll clarify why outsourcing administrative services is also a beneficial solution for tech companies, what are the responsibilities of such providers, and which model could save you from drowning in paperwork.
What is an Administrative Services Organization?
An administrative services organization (ASO) is an external firm that takes on administrative HR tasks and copes with ever-changing compliance burdens. At the same time, the client company remains the employer and maintains a great deal of decision-making power.
Alcor can serve you as an administrative services organization company and provide support in terms of payroll, tax calculation, and many related difficulties. We will reduce your operational concerns by providing you with consultations on the legislation updates in Ukraine, plus comprehensive office administration. Our Account Managers are ready to assist you even with minimal daily tasks, such as food deliveries or the organization of corporate events.
Our BPO company is an all-in-one place to ensure your successful operation in the Ukrainian IT market. We know how to orchestrate all business processes to set up your own R&D center in Ukraine. Alcor will handle the recruitment process, legal compliance, accounting, and even IT infrastructure setup with office maintenance.
Liabilities of an Administrative Services Organization Company
An administrative services organization operates as an intermediary in the employee–employer relationship, significantly reduces paperwork, and covers plenty of routine tasks. The structure of an administrative services organization doesn’t imply a co-employment agreement and allows clients to take more liabilities, such as picking a health plan.
Commonly, outsourcing of administrative services includes:
– Benefits administration
An ASO can organize and deliver benefits packages to employees.
– Payroll processing
A vendor calculates the salaries, manages deductions, fills out payroll taxes, and delivers payments.
– Regulatory compliance
The outsourcing administrative services organization makes sure that your business complies with relevant laws and policies.
– Additional services
Reporting and safety administration are often included in this category.
3 Benefits of Outsourcing Administrative Services Organization
Smooth Payroll in the Host Country
Many tech enterprises that opt for offshoring can face diverse obstacles for running payroll in accordance with the standards of a foreign state. An administrative services agency can provide “remote payroll” assistance in compliance with employment laws and local regulations. That’s how CEOs can feel both administrative relief and ensure that their operational duties are in good hands.
The benefits of administration outsourcing include the presence of experienced people who will cope with time-consuming tasks that have nothing to do with the core business. That could be particularly useful for small IT startups with a team that is good at programming but not so good at accounting or compliance. With a reputable ASO partner, they don’t have to spend time and money on training new employees and onboarding them. For that reason, ASO is also a good option for software companies to cut costs.
Chance to Free up Resources
Among the administrative services organization benefits, there is also an opportunity to focus on generating more revenue instead of just coping with operational concerns. By consolidating multiple secondary functions to a single vendor, you can significantly improve your colleagues’ productivity and reduce the time they waste doing routine paperwork. Moreover, a vendor will help you to define the specific needs of your company and provide custom service packages to fit these unique demands.
Comparing and Choosing: Administrative Services Organization vs PEO
When it comes to outsourcing administrative services, there are two popular options companies usually consider: PEO and ASO. Although both models ensure administrative assistance and regulatory protections, there are fundamental differences you should take into account before making a final decision.
PEO stands for Professional Employment Organization. When a company owner starts the cooperation with a PEO, they enter into a unique co-employment relationship. That partnership allows the provider to take on many risks and liabilities related to being an employer. To begin with, shared responsibility for managing employees implies that payroll is run under the PEO’s federal employer identification number (FEIN). What is more, a provider chooses the health and welfare benefits, as well as sponsors them.
Contrary to full-scale PEO services, an Administrative Services Organization (ASO) provides rather selective administrative support. A vendor doesn’t establish a co-employer relationship with the client and doesn’t process taxes under its FEIN. In addition, a partner may only assist in arranging health coverage but doesn’t sponsor the benefit programs. Under the ASO structure, the client gets rid of administrative headaches and keeps a decent level of control and flexibility.
Consider Alcor BPO: Your Outsourced Administrative Services Provider
In case you’re looking for a third alternative to run administrative processes, consider Alcor’s unique solution. Designed specifically for product tech companies, it reinforces the advantages of other models and keeps the balance between comprehensiveness and full client control.
Our financial and legal departments work closely to provide IT product companies with payroll, accounting administration, tax planning, and calculation in accordance with Ukrainian labor law. Just like PEO, we will serve you as a business and legal shelter by keeping you updated in terms of Ukrainian legislation and handling ever-changing regulations. You will get 100% compensation if you or your software developers get a fine due to our mistake.
At the same time, you can enjoy full control and flexibility, just as an ASO offers. Within our model, the client operates as an actual employer for their development team. That means that you make the decisions in terms of recruiting, onboarding, termination of employment, promotions, communication, etc. Moreover, you are able to decide on the scope of services you need from us and pay only for what you asked for – with no hidden fees or large upfront investments. We don’t like one-size-fits-all solutions, thus will be pleased to develop a custom service package just for your company and its specific needs. To make your business expansion even less stressful, we provide you with a dedicated Account Manager. That’s the personal advisor with whom you can articulate all your needs, and communicate on a regular basis.
In essence, Alcor provides everything you need to set up an offshore development center in Ukraine. Many of our customers enjoy such a solution, including People.ai. They’re an IT product company from the United States that owns a platform for B2B sales acceleration based on machine learning technologies. They decided to expand their tech team abroad by hiring developers in Ukraine. The client resolved to delegate IT recruitment along with other back-office operations to us as a single and reliable provider. Within one month, Alcor managed to establish an R&D center in Kyiv for People.ai with 25+ IT talents, transparent payroll, and complete compliance with the USA and Ukrainian legislation.
All in all, we are convinced that there are loads of benefits of outsourcing administrative services. However, there is no precise algorithm when it comes to choosing between administrative services organization vs PEO. There is a great number of variables worth taking into account while selecting an option that works best for you. On the one hand, an ASO offers a great amount of control, but limited risk management in case of a mistake. On the other hand, a PEO provides legal shelter but there is some ambiguity regarding the level of control you maintain.
To strike a balance, transfer the operational processes to Alcor. While many software enterprises consider IT outsourcing to Ukraine as the only means of expansion, we suggest a smarter solution. Your own software R&D center will ensure rapid business development, easy recruiting, corporate culture, secured IP rights, and plenty of other advantages.