Why Use a Payroll Company?

Why Use a Payroll Company?

Payroll
Managing your own money is hard enough — managing other people’s money on top of that may well turn into a giant headache. Handling the details and regulatory compliance issues associated with payroll can be a challenging, if not daunting, task for businesses of all sizes. So how can you make sure your employees get paid and you stay headache-free? Payroll Service Providers.

Payroll companies that specialize in areas such as payroll processing, time and attendance, Federal and State payroll tax computation and workers’ compensation can take on these time consuming areas, freeing management up to do what it does best … run the business and make money.

If mistakes are made, given their experience and dedicated resources, payroll companies are in a better position to identify and correct them more quickly.  With this in mind, it may save a company a lot of money and staff time to engage a payroll service provider, as opposed to handling payroll matters in-house.

So what exactly do payroll service providers do?

As their name indicates, payroll service providers work with their clients to ensure that employees are paid on time and that an employer stays in compliance with its taxation and other legal obligations in connection with making these payments. More specifically, the types of duties commonly handled by payroll companies include:

  • Gross Pay calculations using software provided by the payroll company.
  • Calculating payroll taxes and ensuring that correct deductions are made by the employer.
  • Quarterly and Annual Federal and State Payroll Tax Return preparation and electronic filing.
  • Handling of all payroll tax and other remittances directly with the relevant government agencies (CA EDD and Federal IRS for example).Handling of all government correspondence RE: any potential calculation or other payroll errors.Proactively monitoring the relationship between workers’ compensation insurance premiums and actual payroll
  • Integrating third-party 401(k) and other benefit plans
  • Providing electronic payroll records to employees and employersEnsuring that clients stay in compliance with all applicable state and federal laws governing payroll

Additionally, some payroll companies also provide human resources (HR) support services to clients. These services are designed to help employers meet their legal obligations and as a compliance check for company programs with applicable labor laws.

A good payroll service provider will provide its client with updated information on an ongoing basis, so that company management (including HR personnel) won’t need to take the time themselves to research recent legal developments thus avoiding yet another headache.

To make things even easier, some companies make the decision to rely more heavily on their trusted CPA firm for payroll-related services, which typically overlap (not replace) the services of a payroll service provider.  At Sousa & Weber, we typically assist with payroll processing through a third-party service provider which handles the details.

Final Thoughts

At Sousa & Weber, often we will see a new client that has been manually calculating hours/pay rates and associated payroll tax withholdings and cutting payroll checks internally.  Based on the details involved and the risk of error and time involved, 99% of the time we make an immediate recommendation to hire a payroll service provider to handle this area.

Contact us today to discuss your current payroll situation!

 

By |2017-11-28T23:01:41+00:00September 19th, 2017|Accounting Tips|Comments Off on Why Use a Payroll Company?

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