[00:00:01] Speaker A: Hello. Thank you for joining us. Welcome to what Counts, the podcast where we dive deep into the world of information governance.
Here we highlight proven solutions developed through our experience working with companies across various industries, and we talk about how you can apply them to your company. Whether you're interested in information governance, have a need, or just curious to hear about information management challenges like email management, retention management, or asset data management, this podcast is for you.
This is Lee. And in this episode, moron, I will dive deep into the world of payroll and insurance. Yep, two topics that may not always steal the spotlight, but they're absolutely the backbone of a thriving organization.
How do you feel about payroll and insurance, Maura?
[00:00:47] Speaker B: Well, from a strict information governance perspective, they're critical records that your business needs.
So this is part of our series on what it's like to be a small business owner. But regardless of the type of business that you're in, if you don't get your payroll records right, you don't have your insurance records right, you're going to be in trouble at some point in time.
[00:01:12] Speaker A: Absolutely. It may seem like just cutting checks, but there's a lot more to it.
Payroll includes payroll taxes, withholdings, workers compensation, and unemployment insurance.
Get any one of these wrong and you could be looking at penalties, definitely unhappy employees, or worse, problems with the irs.
So I think reporting is key in this instance.
[00:01:41] Speaker B: I think reporting is key. I think recordkeeping is key. Timekeeping and all of the other things that go along with that. I just had a flashback to when I was very new in my career and working for a small company, small consulting firm, and they decided not to run payroll for somebody who was on vacation one week because they thought, oh, he doesn't need his paycheck. He's out of town.
Well, this was in the days before you had direct deposit.
And he sent his wife to pick up his paycheck because, in fact, they did need his paycheck, and they weren't going to wait until the next week when he came back in the office to pick it up. They needed. They needed it and it wasn't ready. And at that, I was a very junior person. And shortly after this, I actually took over running payroll and paying accounts payable because this company was small and they gave me all the tedious jobs.
So I remember at the time, even then thinking, yeah, the most important thing you need to do in a company is pay your employees, otherwise, why would they come to work? Right.
[00:02:54] Speaker A: I don't. Yeah, don't know if I would.
[00:02:58] Speaker B: Exactly.
[00:03:00] Speaker A: So to help you with that there are accounting systems out there and they have models or modules is a better word that'll help with the payroll piece. Payroll taxes, they collect it, they sort it out and so forth. It gets trickier when you have company employees in multiple states.
That's when it gets a little trickier because the taxes are different and the regulations are different and the reporting is different and so forth. But you can always get help. I think we talked about in a previous episode, peo, professional employment organization.
If you get big enough and you need help in this area, they'd be happy to take on payroll responsibilities for.
[00:03:41] Speaker B: You for a small fee.
So the, the key, whether you're going to do it on your own or you're going to do it with a tool or you're going to do it with an organization, a peo. In all three cases, you need to be registered in the states where you have employees. So just like you have a federal employee ID number so that you can report payroll for your employees to the irs, you also have to have a state employee ID number for most states.
There are some states that don't have state income tax, so you may not need it in those states. But for most states you're going to need something. Register the fact that you have employees, you're doing commerce basically in that state.
Even if they don't have a state income tax, they may have requirements for workers compensation insurance.
And that's a state by state thing as well.
So the key here is understanding what your responsibilities are. And start with, okay, who are our employees? Are they full time employees?
And we can talk about that later, but full time employees or employees that are on your payroll in some way as an employee as opposed to a contractor, where you as a company have taken on the responsibility of making sure that income is correctly reported and withholdings are taken care of, unemployment insurance, workers compensate insurance, all of that.
Understand where your employees are, where they work.
Because I know I lived in Philadelphia for a while, lived actually outside of Philadelphia for a while, which is key.
But I had an office in Philadelphia and depending on if I worked at home or if I worked in the office, it was different tax set up. And the company I worked for was a big company, they had all that figured out.
But we as a small company, looking at that employees in the state of Pennsylvania, in the city of Philadelphia, in the state of New Jersey, it became tricky for sure.
So for us, when we had 10 employees in, I don't know, roughly 10 states, like nobody was together, we had, we did have A professional employment organization that helped us because it was complicated and we didn't want to mess it up.
[00:06:06] Speaker A: Yeah. I would just say a structured reporting process is your financial safeguard when it comes to all these pieces. And we mentioned a couple times workers compensation. And that kind of goes into the insurance area.
Right. I think, I think all 50 states require workers compensation insurance. So it's, it's a serious thing because you want to take it serious, the safety of your employees and you want to show them that they're important to you as well. So making sure you're compliant with that is, is very important.
There's a couple and the rules are.
[00:06:43] Speaker B: Different state to state. Even if they all require it, it's different rules.
Some states allow repetitive motion injury claims, some don't. They require a specific incident. Some states have different hazardous operations or hazardous materials rules and riders and variations. Some don't.
So again, research to understand your responsibilities and look for help where it's available.
Right. Before we go heavy into the insurance, I wanted to, I think you brought up, you were listening to our last episode, Lee, when you were doing the editing and that we've mentioned QuickBooks a few times and we're not in any way endorsing or un endorsing them. It's the one we use, so it's the one we know. But there are competitors to QuickBooks. They all do basically the same thing. They help you manage your books, they help you automate the record keeping side of it, including tracking the payroll taxes, if you have that payroll module.
So I just, I thought we should use, you mentioned we should say it. So I'm jumping in and say no, I appreciate it.
[00:07:54] Speaker A: Yes, thank you for remembering that in.
[00:07:58] Speaker B: General, the world of insurance.
[00:08:00] Speaker A: Yes.
I mean there are several insurances that you should get for your business and you should take it serious because it is a serious matter. General liability, professional liability, talk about those. The workers compensation we already covered. Cyber insurance is basically a must in today's day and age. And then auto insurance or auto coverage for rentals. We'll get into that. And we mentioned it in a previous episode, but let's just get into that a little bit more.
So general liability is, is business. Business owners policy.
It's a business owner's policy.
It's built for bodily injury, property damage, some advertising risks. So it's really built for a brick and mortar, but it can also be for people who work from home. To cover the particular areas, you just list your address, cover the particular areas in which you work, slip and fall scenarios. Fall into this. You know, if client tripped over a cord or something that went to a warehouse or you brought them into your home to have a meeting or something like that, that's where your business owner's policy or your general liability insurance, one and the same, are going to cover you.
If you're a solopreneur and you're looking to skip this one because you don't have a storefront.
This policy can also help with some legal fees if something does go wrong. It's just not about protecting space, it's about protecting your activity.
So that's a key piece, Professional liability or errors and admissions insurance.
[00:09:46] Speaker B: Errors and omissions, not admissions.
[00:09:53] Speaker A: Is absolutely vital, right? If you are offer any sort of, sort of advice, services, consulting, or you give deliverables, this one's crucial because a client can claim that some of your work has caused them financial harm. Whether it's unintentional or not, they may have a case. And here's where this comes into play. So if you're a marketing consultant, software developer, a coach, one misunderstood email could cost a lot of money for you. And so this is key in this area where you'll be covered.
Do you want to.
[00:10:38] Speaker B: I think that one goes along with writing a solid contract that that spells out what your obligations are and not just this is what we're going to deliver, but this is how we're going to do it. This is what we are telling our clients it can be used for. For instance, we're consultants in the information governance space, but we're not lawyers and we are not providing legal advice either on this podcast or in our client work. And our clients understand and agree with that. So they understand that they have the responsibility to, if they're worried to check anything that we might tell them with their own attorneys, either in house or their outside counsel. And so that our contracts say that. And then we have this, the professional liability, the errors and omissions insurance as a backup which we thank goodness never had to use, but we have it.
And the reason it's called colloquially kind of errors and omissions is if you accidentally make a mistake or you forget to do something.
So it's either you actively do it wrong, like you type it wrong or you say it wrong or you just forget to say it. It's both. It's either one.
So.
[00:11:58] Speaker A: Just plowing through workers compensation, I think we covered this one in pretty good detail.
It, it implies that you're serious about your employees safety whether you're using contractors or part time people you, we already stated it. We should check your state laws.
But miscalculating this or misclassifying something can land you into hot water here. So you need to be careful. And that's kind of the best advice we can give you. Make sure that you have it. If you have these employees.
[00:12:32] Speaker B: Yep. And our clients, many of them require it. Like they're, they're checking part of our, like Lee's saying, we're doing this insurance. We get this insurance because it's the right thing to do and it protects us and it protects our employees, it protects our clients also. Our clients are asking us to prove that we have it because that's part of their due diligence as they're doing work, they're protecting their own business, their own clients, their own customers and employees by ensuring that anyone who's working for them, meaning us, has all the same protections that are necessary.
[00:13:09] Speaker A: Absolutely.
Cyber insurance, the modern must have, that's, that's what comes up when you do a search for this one.
If you have client data, payments, cloud platforms, this is essential. Right. Cyber attacks aren't just for Fortune 500 or 1000 companies anymore.
Small businesses, mid sized businesses are often targeted because there's the perceived perception that they're easier to hack and it could cause huge problems. A data leak, phishing scam.
How many emails do you get a day that are a phishing scam or some sort of problem?
I get payments of PDFs or payment links or whatever says here, click this and you'll get your $10,000 payment from client XYZ.
And yeah, don't click that link, it'll be a problem.
[00:14:04] Speaker B: Don't click that link. They're not paying you, right?
[00:14:07] Speaker A: Yeah.
And I mean the worst thing that could happen in this area is it your, your customer trust goes down as well. So knowing that you have this to back you up can help you from a branding perspective.
[00:14:21] Speaker B: You often hear about denial of service attacks happening where a hospital or a school has all their records basically taken hostage by a hacker.
And the cybersecurity insurance is one of the ways that you can, that you can recover from that.
It also a little bit in some ways forces you to do a better job of protecting yourself because in order for you to be insured, you have to provide a lot of detail about how you are protecting your information, your own company data, your employee data and your customer data. You have to provide a lot of that to the insurance company before they will give you the insurance. That's true. And so it so it raises your level of preparedness in addition to giving you that backup in case something goes wrong.
[00:15:15] Speaker A: May help you with forensic investigations, it may help you with legal costs, may help you with public relations support or even ransom payments in some cases in case your data is locked up. But you're right, I fill out a form every year when the cyber insurance comes up. Did anything change from your platform perspective, your technical environment, and you have to be honest on because you want to.
[00:15:42] Speaker B: Be covered and over. We've been in business for 12 and a half, almost 13 years now and things have changed like the, the world of computing has changed a lot in that time in terms of using the cloud and using shared repositories of information.
And so we've had to increase our security but also increase our ability to talk about it and explain it to clients and to the insurance company.
So it's an interesting. Because we're, we're small and we came from a much bigger company and I came from the classified world. Like I had significant experience in the intel space where there are a lot more rigid rules, but there's also a lot more infrastructure around protecting your information.
So you go into a small company and you think, okay, well we're not in healthcare, so we don't have HIPAA protected information, you know, that private healthcare information, we don't have that. And when we have worked for healthcare companies, we haven't held their data. In fact, in a couple cases, they gave us their computers to use for something we needed to do so that we wouldn't have any of their protected information in our environment.
So we feel like we're pretty low risk when it comes to the type of information we have and the footprint that we have. But in fact, everything's connected on the cloud and that these risks are real.
And so having to really understand what our exposure is, which is relatively limited, but it's not zero.
So it's been an interesting, I think, kind of growth for us over the past. I would say it really picked up about seven years ago is when people, our clients started requesting more and the risk was definitely higher, started raising, rising.
[00:17:38] Speaker A: Yep.
Last but not least, auto insurance. I know we talked about it at one other episode, but if you rent a car for work or travel, don't assume that your personal auto policy covers it. Don't assume that your rental, the, the rental company's coverage is enough. Just make sure that you have an additional rider if necessary. Sometimes that's associated to the credit card that you purchased the vehicle or rent the vehicle on so you can check into that.
It's just if, if an accident happens, it could be a huge liability. So you want to make sure you're properly covered.
Insurance is not just a strategy.
It is a strategy. It's not just a requirement. Sorry, say that correctly. It's a requirement.
[00:18:33] Speaker B: It is a requirement. It is a strategy. And it really forces you to up your game on all these things to make sure that you're doing a good job as a business owner, to protect your business, your employees, your customers.
Even though when we started planning this episode about payroll and insurance, I think we both were kind of like, how are we going to talk about that for more than one minute? But there's actually a lot in it.
[00:18:59] Speaker A: I think we're into 20 minutes right now.
If you have any questions, please send us an
[email protected] or look us up on the web at WWE www.trailblazer.us.com Thank you for listening and please tune in to our next episode. Also, if you like this episode, please be a champion. Share it with people in your social media network. As always.
[00:19:21] Speaker B: Also. Also, sorry, jumping in rate and like it or something like, there's a lot of different ways to promote podcasts that we don't do, so we're looking for your help. Rate us, like us, follow us, all of those things.
[00:19:37] Speaker A: Help.
[00:19:38] Speaker B: So thanks.
[00:19:38] Speaker A: Very true. As always, we appreciate you the listeners. Special thanks goes to Jason Blake, who created our music.
[00:19:47] Speaker B: All right, till next time.