Want it all? And want it now? - Choosing a management company

By Sarah Smith

Choosing a management company that gives you what you want and when you want it, can be a hazardous chore. There are so many management companies touting for your business, with special offers and competitive fees. This can often add to the confusion of what management company would best suit you.

In today’s market, many management companies offer a wide range of services that appeal to most contractors; flat fees, salary packaging/sacrifices, superannuation, payroll, LAFHA, payroll, payroll summaries, the bonus of payroll tax exemption, to name but a few of the benefits on offer. ‘Offer’ being the imperative word here. The company you choose needs to be able to follow through on the ‘offers’ they advertise. To the inexperienced contractor, most management companies appear to offer the same services and similar fees. How do you sort out the reputable companies from the sharks?

The first port of call should be to check and see if the company is registered and has an ABN and also ACN. An easy way to do this would be to check online at

http://abr.business.gov.au/(qiarkx55gunmhsalvqkdsx45)/main.aspx

http://www.search.asic.gov.au/gns001.html

These government sites are updated on a regular basis so be sure to check the company’s ABN and make sure it shows as ‘effective’.

Some management companies entice contractors by making claims on payroll issues that they simply can’t follow through on, what all contractors want foremost is to be paid on time, accurately all the time. They want the flexibility of the payroll team to amend any late payments immediately. Contractors don’t want to wait for the next payroll that fits the cycle of the management company. Check with your management company at the outset what their policy is on payroll issues, and always try to get written confirmation of any promises or pledges relating to payroll.

Management companies also administer your superannuation. They must make the contributions as a minimum each quarter, but can make contributions each month.. Ask them about the frequency of payments to your fund. Contributions made to your fund will be shown on your payslip. However, not all management companies handle your superannuation contributions effectively, amounts can vary and discrepancies occur. How do you ensure they are managing it correctly? A good place to start would be by checking with your chosen fund, but another source of help if you are concerned that your superannuation is not being paid/incorrectly paid is the ATO website www.ato.gov.au/unpaidsuper

What contractors also want is the secure knowledge that they are covered by their management company’s insurance. After all, the cost of insurance is factored into the fees paid by the contractor to the management company. The majority of contractors begin work each day under the assumption they are covered by the insurances provided, so if the contractor had an accident on the journey into the workplace or whilst in the workplace, they would be covered by workers compensation insurance. How do you know that your management company has adequate insurance? How do you know they haven’t allowed the policy to lapse? Your safety is paramount.

Always make it a priority to establish with your management company the insurance issue. The amount can vary, but a guide to the majority of Federal/Commonwealth Government sites would be $10m Public Liability and $5m Professional Indemnity, along with current workers compensation insurance. A reputable recruitment company will always attempt to inform you if your management company has not provided the correct insurance certificates, but not all recruitment companies are reputable. You can ask your management company to see evidence of the insurance they hold, ask to view the certificates of currency, as they have all the required information; coverage amount and validity. After all, you want to remain on the client site and continue to earn your salary. Without the insurances in place, your contract will be breached.

In essence, when seeking out a management company, consider what you want and when you want it. All the special offers, low fees, salary packaging are a great way to entice contractors but shouldn’t be your priority. The important issues for you should be firstly focussed around your safety at work, ensuring your hard earned superannuation is safe and receiving your hard earned cash on time. Choose carefully – and you can have it all!