| Payroll is an essential business practice - like sales or | | | | clear individually on your bank account? Another client |
| customer service. It can be difficult, detailed and | | | | of mine thought that the payroll company was making |
| complicated with its ever changing rules and | | | | the tax payments and filing the tax returns directly with |
| regulations and the consequences of some mistakes | | | | the government. This was not the case and my client |
| can be much more serious than an employee's checks | | | | ended up paying penalties and interest. |
| simply being wrong. Many mistakes can result in getting | | | | Gathering and communicating the information needed |
| a very hard time, no, not from the employees, but from | | | | to accurately calculate your payroll. This includes hours, |
| people you already don't want to know - the federal | | | | new hire information, employee change information, |
| and state government enforcement types. | | | | properly classifying your employees as exempt, |
| While pay services offer an attractive and valuable | | | | non-exempt, properly applying overtime rules, etc. |
| alternative to in-house processing, this is true only | | | | With payroll companies now providing an internet |
| when chosen correctly and monitored by someone | | | | option for the convenience of processing, the burden |
| (like a professional freelance accountant or | | | | of entering information accurately and correctly |
| bookkeeper) who knows the basic compliance rules. | | | | belongs with the business owner or the bookkeeper |
| When a payroll company is chosen correctly, they | | | | performing this task on their behalf. Mistakes can result |
| provide a less expensive, simpler means of paying | | | | in additional processing fees being charged. |
| employees and filing the compliance tax returns each | | | | Reviewing the processed payroll and reports for |
| quarter, not to mention protecting you from the liability | | | | accuracy and completeness. Even though you have |
| associated with preparing payments, it is important to | | | | hired the company to process the payroll and they are |
| remember: | | | | the "experts", it is still your responsibility to have a basic |
| THEY, the payroll provider, are responsible for | | | | knowledge of rules and regulations. I cannot tell you |
| calculating pay from the information provided to them | | | | how many times our clients have communicated their |
| and remitting your tax payments and filing your returns | | | | new state unemployment contribution rate to their pay |
| on a timely basis. | | | | company and that information was not updated or |
| YOU, the user of the payroll service (freelance | | | | federal unemployment taxes being taken out beyond |
| accountants, bookkeepers or business owner) are | | | | the maximum limit of $7,000 or $56 per employee. |
| responsible for: | | | | Being knowledgeable always saves you money in the |
| Knowing the basic rules of payroll and asking the | | | | end. |
| provider the "right" questions about their services as it | | | | Here are a few tips I have developed over the years |
| relates to your company. Bear in mind even if you ask | | | | that have helped me successfully manage payroll. |
| the "right" questions the sales representative, who sets | | | | Obtain written authorization from your client to speak |
| up your account and the customer service | | | | on their behalf to the provider directly. To make it |
| representative whom you deal with after your account | | | | simple, we write the letter for our clients and have |
| has been set up, may not have the correct answers | | | | them print it on their letterhead. All they have to do is |
| no matter how large or small the company! Here's an | | | | print it on their letterhead, sign it and fax a copy to the |
| example of an incorrect set-up that ended up costing | | | | provider and me. I keep a copy on file just in case the |
| a client of mine almost one-hundred thousand dollars. | | | | next time I speak with the payroll company they |
| When we began working with a new client last year | | | | cannot locate my client's authorization. You'd be |
| who has a unique, complicated payroll we uncovered | | | | surprised how many times the provider loses the |
| that they were not making Medicare contributions. This | | | | authorization letter! |
| company had been in business for several years and | | | | Quarterly refresh you working knowledge of the basic |
| was using a rather well-known company to process | | | | compliance rules. |
| their payroll. Not once during the set-up of this | | | | Develop a relationship with ONE payroll provider that |
| company or processing was the question ever raised | | | | you like working with and TRUST. My success has |
| by the payroll provider "that you are not contributing to | | | | come in getting to know one sales person and asking |
| Medicare". The payroll was just processed! | | | | to have one customer service representative who I |
| This oversight resulted in our client being out of | | | | can go to no matter which company my client works |
| compliance with the Federal government and when | | | | with to get good answers to my questions. I never |
| you are out of compliance for taxes you will go to jail. | | | | force my clients to move to the payroll company I |
| We helped our client to take immediate steps to | | | | prefer, but once I gain their trust I do suggest that we |
| rectify this issue and while everything has been | | | | move to my favorite because of my working |
| resolved amicably with the government it should be | | | | relationship with them and usually can obtain better if |
| known that the company who set-up and processed | | | | not competitive pricing for my client. |
| the payroll has taken no responsibility for this oversight. | | | | If you process payroll on behalf of your client, |
| Needless to say, we have changed providers on | | | | standardize the format in which your client provides |
| behalf of our client. | | | | you the payroll information. This will eliminate the guess |
| Understanding exactly what services the payroll | | | | work. |
| provider performs for you and how those services | | | | Don't forget, even though your client is outsourcing their |
| affect your cash flow. For example, does the service | | | | pay, the burden of the responsibility for accurate |
| you select debit the entire net pay and taxes amount | | | | payroll compliance relies with the business not the |
| from your checking account or do these amounts | | | | payroll provider which is why they need you! |