Financial Ratio SURVEY. Compare your own numbers to the national norms, and find out where you need to focus to increase your profits.

Transcription

1 2016 Financial Ratio SURVEY Compare your own numbers to the national norms, and find out where you need to focus to increase your profits.

2 If possible, please complete the financial ratio section using data from your PEO business only. The following financial data represents: PEO business only 2 PEO and ASO financials are co-mingled What is your fiscal year-end date? / FY month FY day Balance Sheet Fiscal Year 2015 Assets Current Assets 1 Cash and cash equivalents $ 1 2 Marketable securities $ 2 3 Accounts Receivable - trade, net of allowance for doubtful accounts in 2015 $ 3 4 Accounts Receivable - related parties $ 4 5 Unbilled revenues $ 5 6 Other current assets $ 6 7 TOTAL CURRENT ASSETS $ 7 8 Worker s Compensation Deposits and all Other Deposits $ All Other Assets $ 8 10 TOTAL ASSETS $ 9 LIABILITIES AND STOCKHOLDERS' EQUITY Financial Ratio SURVEY Current Liabilities 11 Accounts Payable - trade $ Accounts Payable - related parties $ Unearned Revenues $ Accrued Salaries and Wages (including worksite and internal employees) $ Accrued Salaries and Wages - Internal Employees $ Accrued Salaries and Wages - External Employees $ Payroll Taxes Payable $ Other Payroll Deductions $ Benefits Premium Payable $ WC Premium Payable $ Other current liabilities $ WC Claim Reserve Liability $ Current Portion of Long Term Obligations $ TOTAL CURRENT LIABILITIES $ 20 Long-Term Liabilities 25 Long-term obligations - less current portion $ Other long-term liabilities $ TOTAL LONG-TERM LIABILITIES $ 23 Stockholders'/Members' Equity 28 TOTAL STOCKHOLDERS'/MEMBERS' EQUITY $ TOTAL LIABILITIES AND STOCKHOLDERS'/MEMBERS' EQUITY $ 25 1

3 Income Statement Fiscal Year 2015 REVENUES 1 PEO Service Revenues $ 26 2 Salaries and Wages - Worksite Employees - Billed $ Administrative Fee $ Medical Premiums and Other Benefits (except retirement) $ Workers Compensation - Billed $ FICA Billed $ FUTA - Billed $ SUTA - Billed $ Retirement - Billed $ Other PEO Services Billed $ ASO Service Revenues $ Other Fees $ TOTAL REVENUES $ 28 DIRECT COSTS Financial Ratio SURVEY 14 Salaries and Wages - Worksite Employees $ Federal Payroll Taxes (FICA, FUTA) $ State Payroll Taxes (SUTA) $ State Income Tax $ Local Assessments Tax $ SUTA $ Benefit Premiums $ Medical Premiums and Other Benefits (except retirement) $ Retirement Benefits $ Medical Benefit Claims $ Workers Compensation Expense (includes premiums and deductible claims) $ Other Direct Costs $ TOTAL DIRECT COSTS $ GROSS PROFIT $ 38 OPERATING EXPENSES 28 Depreciation and Amortization $ Sales and Marketing $ Salary, Wages & Benefits $ Commissions $ Travel Expenses $ Sales Management and Support $ 718 2

4 34 Marketing and Advertisements $ All other operating expenses $ Occupancy $ Bank Charges $ Insurance Expense $ Internal Employee Compensation $ Supplies $ Postage and Delivery $ Phone and Utilities $ Information Technology $ Legal & Accounting $ Other $ TOTAL OPERATING EXPENSES $ TOTAL OPERATING INCOME $ 43 OTHER INCOME/(EXPENSE) Financial Ratio SURVEY 48 Interest Income $ Interest Expense (enter as a negative) $ All Other Income/(Expense) $ TOTAL OTHER INCOME/(EXPENSE) $ NET PROFIT BEFORE TAX $ INCOME TAXES 54 Income Tax - Current $ Income Tax - Deferred $ TOTAL INCOME TAXES $ NET INCOME (LOSS) $ What was the dollar amount of your IT capital expenditures? $ What percentage of the above figure was for IT equipment? % 837 Additional Information 1 Are your financial statements audited? Yes No 70 2 Controllable revenue (Total revenue - FUTA/FICA, Wages) $ 53 3 Controllable costs (Total: SUTA, Benefits, Workers' Compensation) $ 54 Enter standard premium (workers' compensation) at 1.0 mod (Defined as audited premiums prior to any discounts, 4 $ 55 credits, taxes or assessments, and excluding any premium for increased Employer Liability limits.) For questions 5-8, please count each entity with its own tax ID number as a client (except for parent subsidiary groups). 5 Ending # of Clients (In defining a "client," a parent company and its subsidiaries are counted as one unit) # 56 6 Beginning # of Clients (In defining a "client," a parent company and its subsidiaries are counted as one unit) # 57 7 New Clients (In defining a "client," a parent company and its subsidiaries are counted as one unit) # 58 Sum of (# of) clients each month of the year (Clients for whom at least one paycheck was issued) 8 Jan Mar May Jul Sep Nov # 59 Feb Apr Jun Aug Oct Dec 3

5 9 Sum of (# of) worksite employees paid each month of the year Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Dec # Sum of (# of) worksite employees paid each month of year /12 # Number of worksite employees at the beginning of the year. # 71 Number of new worksite employees from new clients (include all new employees that came from a new client gained 12 during the year). # Number of worksite employees at the end of the year. # Total W-2's processed (for worksite employees) for the fiscal year # Total number of payroll checks paid to worksite employees during the year # Sum of (# of) internal employees (incl. salespersons) paid each month of the year Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Dec # Sum of (# of) internal employees (incl. salespersons) paid each month of the year/12 # Sum of (# of) internal employees (excluding salespersons) paid each month of the year (Exclude salespersons only. Include admin support, supervision and marketing staff) Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Dec # 66 Accounting, Finance, and Legal # 750 Payroll # How many employees (expressed in fulltime Equivalents) did your organization have in 2015 in the following positions? Benefits # 752 Human Resources # 753 Internal Sales and Marketing and Sales Administration # 754 Risk Management # 755 General Administration, Support and other # 756 Financial Ratio SURVEY 20 Total of Owners' Compensation (W-2) for year $ Average Base Compensation (excl. commission) for internal salespersons during the year $ Prior year total revenue. $ Prior year salaries & wages--worksite employees $ 838 Thank you for your participation! Please send your completed questionnaire to: Industry Insights P.O. Box 4330 Dublin, OH Or you can fax it to

6 2016 Operating Statistics SURVEY Compare your own numbers to the national norms, and find out where you need to focus to increase your profits.

7 General Company Information Note for Questions 1-3: In defining a "client," please count each entity with its own tax ID number as a client. 1 What is the average size of your PEO clients (in terms of Worksite Employees)? WSEs What percentage of your client companies are in an ASO arrangement? (For this question only, please answer for your PEO and any related companies that provide ASO services.) % % % 4 26+% In how many states do you have at least 50 worksite employees? Total gross revenues in $ 28 5 Sum of (# of) internal employees (incl. salespersons) paid each month of the year/12 # 65 6 In which state is the majority of your PEO business? How does your PEO report its revenue in its financial reports? Gross revenue reporting (including wages, taxes, health and workers' comp premiums, and admin fees) 2 Net revenue reporting 8 Does your company derive more than 50% of its gross profits from PEO activities? Yes No 760 Operating Statistics SURVEY Health Care Benefits What type of health plan do you sponsor? 110 Fully Insured 320 Self-Funded 321 Fully Insured and Self-Funded 323 Our PEO does not sponsor a health plan 322 Other If your PEO sponsors a large group major medical plan, does it allow client companies to sponsor their own health benefit plans? Yes 2 No 3 N/A-We do not offer a large group employer health plan for major medical Please complete the following blanks. The three response fields should total 100%: % of our worksite employees are offered health benefits through a plan sponsored by our PEO % 112 % of our worksite employees are offered health benefits through a client-sponsored plan % 113 % of our worksite employees are not offered health benefits through either our PEO or through our clients % 114 What is the average client contribution to PEO-sponsored employee health benefits? % % % % 5 We don't require clients to contribute to the cost of employee health benefits 6 N/A-We do not offer a large group employer health plan for major medical Total 100% If you sponsor a health plan or plans for major medical, what was the average premium rate increase for your aggregated health plans in 2015? Premium decreased % 6 Above 50% 2 0% % 7 N/A-We do not sponsor a health plan for major medical % Worker s Compensation What type of workers comp plan do you maintain? 117 Guaranteed Cost 300 Retro 301 Large Deductible ($250K+) 302 Fully Self-Funded 303 Captive What portion of your voluntary market coverage is a master policy in the PEO's name (versus multiple coordinated policies)? % % % 6 100% % 7 N/A - Our PEO doesn't maintain a workers' comp policy in its name % 8 N/A - Our PEO's WC coverage is entirely in the residual market What is the experience modifier on your company s master workers comp plan? Less than Not Applicable (captive insurer or multiple coordinated policy) Greater than 1.4 What is your company s manual premium for the most recently completed 12 month policy/plan period? (Defined as audited premiums prior to any discounts, credits, taxes or assessments, and excluding any premium for increased Employer Liability limits.)? How much did your workers comp premium rate increase in 2015? Our premium rate decreased in % % % % 6 Above 50% $ 122 1

8 19 20 How much did your workers' comp collateral requirements increase in 2015? Our collateral requirements decreased in % % % % 6 Above 50% For what percentage of your client companies do you perform an onsite safety inspection/evaluation? % % % % % 6 100% 21 What is the total number of workers comp claims (excluding for report only incidents) reported to your carrier or TPA for the most recently completed 12 month policy/plan period? # What is the total number of workers comp claims reported to your carrier or TPA within 3 days of the date of injury for the most recently completed 12 month policy/plan period? 23 What is the total amount of your incurred (paid plus reserves) workers comp losses for the most recently completed 12 month policy/plan period? # 205 $ What is the total number of indemnity (lost time) claims for the most recently completed 12 month policy/plan period? # 202 Operating Statistics SURVEY What is the total amount of incurred (paid plus reserves) indemnity for all lost time claims for the most recently completed month policy/plan period? (This amount should not include medical or allocated expenses.) Based on the definitions below, what is the total annual cost of all your workers comp plans? Guaranteed Cost: include (1) audited unmodified premiums (less dividends received); (2) broker/consultant fees; (3) any deductibles* Retro: include (1) audited unmodified annual premium;* (2) retro adjustments; (3) broker/consultant fees; and (4) other fees Large Deductible: include (1) incurred losses;* (2) allocated claim expenses (litigation fees); (3) loss conversion charges 26 and/or claim service fees; (4) audited unmodified deductible premium; (5) taxes and residual market charges; (6) broker/consultant fees; and (7) other fees Fully Self-Funded: include (1) fully developed losses;* (2) excess carrier premiums/tpa fees; and (3) other fees Captive: include all plan expenses *Fully developed as determined by an actuary or by applying NCCI incurred loss development factors up to any applicable aggregate Retirement and Pension Benefits What type of retirement plan does your PEO offer? $ 203 $ Single employer plan 2 Multiple employer plan 3 Client-sponsored 401(k) Plan 4 None Of your total worksite employees, what percentage is covered by your PEO s retirement plan? % % % % % 6 N/A-We do not offer a retirement plan What percentage of your clients provides a match within your PEO's retirement plan? % % % % % 6 N/A-We do not offer a retirement plan Of your total worksite employees, what percentage is covered by your clients retirement plans? % % % % % What percentage of your clients provides a match within their own retirement plans? % % % % % 6 N/A-Our clients do not offer retirement plans If your PEO offers a Section 125 cafeteria plan, what percentage of employees participate? % % % % % 6 We do not offer a Section 125 cafeteria plan Does your Section 125 plan include Check all that apply: HR Services Premium only 135 Child & dependent care 136 Medical reimbursement 137 N/A-We do not offer a Section 125 cafeteria plan Does your PEO offer distinct HR services separate from payroll and benefits administration as part of your service offering? Yes 2 No If your PEO provides HR services, how many full time HR staff do you employ per 1,000 worksite employees? N/A - We don t offer dedicated HR services What percentage of your full-time HR staff are college-degreed HR professionals? % % % 7 N/A-Our PEO does not have full-time HR staff % % 6 100% What percentage of your HR staff have attained HR-related professional certifications such as PHR and SPHR? % % % 7 N/A-Our PEO does not have full-time HR staff % % 6 100% What is the minimum number of years of HR-related work experience required of new HR hires at your PEO? years years years 4 6+ years 5 N/A-Our PEO does not have full-time HR staff What is the average annual salary range for your HR professionals? $25-35K 2 $35-45K 3 $45-55K 4 $55-65K 5 $65K+ 6 N/A - We don t have full- time HR staff

9 40 41 Which of the following does your PEO provide as part of your HR service offering? (Please mark all that apply.) 144 Customized employee handbooks 152 Employee surveys 145 Recruitment/job placement 153 Professional licensure and certification tracking 146 Personality testing 154 Paid time off (PTO) tracking and reporting 147 Background screening 155 Telephone consultation re: HR and personnel matters 148 Pre-employment drug testing 156 Compliance assistance on HR-specific regulations such as EEOC, FMLA, HIPAA, etc. 184 Assistance with job descriptions 157 Turnover analysis and reporting 149 Wage and salary compensation planning assistance 158 On-line training services for supervisors and employees 150 Performance reviews assistance/tracking 802 Coaching 151 Employee exit interview assistance 803 Onsite training 159 Other Does your PEO provide clients with key performance indicator (KPI) tracking (HR dashboard services)? Yes 2 No Operating Statistics SURVEY Sales/Client Service Payroll What type of pricing model does your company use? More than 75% are bundled 2 More than 75% are unbundled 3 Both bundled and unbundled Other than owners, what percentage of your sales force is internally employed? % % % % % 6 100% What was the average annual productivity of your internal sales reps? (# of worksite employees per sales rep per year) Unknown What is the average base pay of your internal sales reps? $0 2 $1-25K 3 $26-35K 4 $35-50K 5 $50K+ 6 Our PEO has no internal sales reps What percentage of compensation for internal sales reps was related to production, gross margin, or profit? % % % % % 6 100% 6 We do not have internal sales reps What was your annual internal sales rep turnover? (defined as Reps terminated or lost in 2015/[(Beginning Reps + Ending Reps)/2] % % % 7 76+% % % % 8 We do not have internal sales reps How many sales representatives did you employ on the average in 2015? More than 100 In providing service to its clients, does your PEO provide: One point of contact for each client company 2 Multiple points of contact for each client company Of the clients whose relationships with your PEO were terminated in 2015, how have the majority chosen to handle their HR needs on a going-forward basis? Partnered with a different PEO 3 Established a multi-vendor system 6 Out of business 2 Partnered with an ASO 4 Brought HR completely back in-house 5 Not tracked/unknown Does your PEO utilize electronic onboarding for new worksite employees? Yes 2 No 52 What percent of client payments are from the following methods? What is the average number of worksite employees per payroll processor? , ,001-2, ,001+ Does your PEO provide Web-based services for payroll submission? Yes 2 No If so, what percentage of your clients utilizes this service? Client company check % 325 Cashier's check % 326 Wire transfer % 327 ACH % 328 Other % % % % % % 6 We do not offer Web-based services for payroll submission Do your worksite employees have access to their payroll and/or personal information via the Web? Yes 2 No 3

10 Technology Do you use document imaging for employee record retention? Yes 2 No Do you offer a Web portal for employee/employer access to HR and payroll records? Yes 2 No Which PEO payroll software do you use? (Choose all that apply) 805 Accountix 809 Lawson 814 Ultipro 806 CYMA Systems 810 PayPlus 815 Homegrown/Proprietary 807 Integreat HR Technologies 811 PrismHR (fka HRPyramid) 816 Other 808 Kronos SaaShr Inc. 812 Summit Software (APEX) 817 Do not use PEO payroll software 813 Thinkware Corporation Please indicate which best describes your PEO payroll software: Hosted/cloud-based 2 Locally installed 3 Does not apply Which CRM system do you use? 819 ACT 821 Netwise Technology 823 Other 820 Microsoft Dynamics CRM 822 SalesForce 824 No CRM system Which accounting software do you use? (Choose all that apply) 825 Great Plains Dynamics 828 Peachtree 831 Other 826 Intacct 829 QuickBooks 832 No accounting software 827 MAS Same as PEO software Operating Statistics SURVEY Other Does your PEO prepare a formal budget each year? Yes 2 No Do you use customer relationship management (CRM) software to track internal employee time for job costing? Yes 2 No Which of the following best describes the independent review of your 2015 year-end financial statements? Audited 2 Reviewed 3 Compiled 4 None of the above Please indicate the certification programs in which you currently participate. 190 ESAC 191 WC Risk Management Certification 192 SSAE 16 How long have your PEO operations been in business? year years years years 5 10 years or more How much outside equity capital did your PEO raise in 2015? None 2 Less than $1 million 3 $1-3 million 4 $3-5 million 5 $5+ million How much outside debt capital did your PEO raise in 2015? None 2 Less than $1 million 3 $1-3 million 4 $3-5 million 5 $5+ million Thank you for your participation! Please send your completed questionnaire to: Industry Insights P.O. Box 4330 Dublin, OH Or you can fax it to