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Payroll CPA discusses Internal Controls for Outsourcing | Wilmington NC CPA

Wilmington NC payroll CPA discusses doing your own payroll.
Gary Bode CPA: I’m happy to discuss how you can handle your own payroll. For a free initial phone consult, please call 399-2705.

You can’t fully transfer all responsibility to a payroll service provider. Payroll CPAs hear unpleasant stories about payroll outsourcing. In my opinion, there is no turnkey service available. Why? Prudence dictates that you still watch the payroll provider. We always explore the option of training you to handle your own payroll and then providing support as needed. Payroll boils down to a set of processes; only the numbers change.

You’re Still Responsible if your payroll service provider doesn’t remit with held taxes. Seems unfair right? But it happens. As a payroll CPA, I request that clients monitor us. How? We use EFTPS (electronic filing tax payer system) to deposit federal withholding and Form 941 taxes. We send you an email with their acknowledgement attached.  But prudence dictates you logging on to check on us.  NC has a similar process. While you could sue the provider, it doesn’t take a payroll CPA to predict this would be a long, unpleasant process.

You’re Still Responsible for providing accurate payroll data. I was payroll manager for a regional firm paying out $350,000/month in gross wages to 100+ employees. Gathering and verifying raw payroll data took 80% of the time. The calculations, cutting checks, getting them signed, distributing them, making deposits etc. just wasn’t a big deal. So, payroll outsourcing still requires work by you.

You’re Still Responsible for the underlying payroll cash flow. What’s the biggest problem I see as a payroll CPA? The client thinking of payroll in terms of net pay only and then being caught short when payroll deposits are due. I think the best feature of an outsourced payroll service is them collecting all employee and employer taxes up front. This prevents the temptation for you “borrowing” from funds held in trust. If you have the discipline to avoid this common trap, doing your own payroll is more cost-effective than outsourcing.

Other Payroll Tips

  • Don’t let your payroll service use their address for IRS correspondence. Payroll CPAs generally have IRS and NC power of attorney. Which means the government uses your address but sends us a copy of any correspondence.
  • We offer a payroll software program on our website. This might be a good alternative to outsourcing. Remember, you do most of the work anyway and can’t fully transfer all responsibilities.
  • Outsourcing payroll is expensive.  Be sure to understand the benefits and weigh them against the cost and residual responsibility.

We’re a Wilmington NC CPA payroll firm that thinks most companies should do their own payroll. We offer training, support and software. For a free initial phone consult, call us at (910) 399-2705.

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