If you need payroll accounting support, please consider calling us at (910) 399-2705
Payroll accounting just doesn’t change that much. Once the process is setup, it stays the same. Just different numbers. Sometimes a company just needs a payroll CPA for training and occassional support.
In the past five years a number of local and national payroll accounting services marketed themselves to both CPAs and companies in Wilmington NC. They have a point: payroll can be complicated and incurs stiff IRS penalties for errors. But outsourced payroll’s biggest contribution is just collecting payroll and payroll related taxes on payday. So, companies without good cash flow discipline don’t caught in a quagmire of back taxes, escalating penalties and interest. But as a payroll CPAs, I say you can handle your own payroll. Those outsourced fees are high. We will help train the staff and then standby as a safety net if and when needed.
“While we offer full payroll accounting services, our philosphy is to make your company as self sufficient as you want it to be. Sometimes a little training, backed by our safety net of support, is all that’s required.”
-Gary Bode, payroll CPA
The HIRE Act, the biggest payroll change to come down the pike in awhile, is a great incentive to employers, but is easy to administer, once someone shows you how. See our W-11 post too. Here’s our comprehensive payroll example.
Payroll Accounting’s Greatest Service: cash flow management by collecting payroll taxes up front
Does your small business accountant think of payroll related cash flow in terms of net pay? Only to come up short when payroll taxes are due? Missing these IRS 941 deposit deadlines usually begins a slow, downward cash flow spiral. Penalties of up to 10% are further exacerbated by interest. Form 941 deposits made with intent to satisfy the next deposit are applied by the IRS to the first missed payment. Bingo. More penalties and interest. Cash flow quagmire. Certain payroll tax funds are held in Trust for the US Treasury, so non-payment can incur criminal charges by the IRS.
Payroll CPA services collect payroll and payroll related taxes on payday, which is appropriate to avoid this net pay mindset. But most companies can:
- Calculate these figures properly.
- Sequester all funds.
- Remit them on time to the taxing agencies
No rocket science, just some easy math and discipline.
Fringe Benefits
Here’s where the sales pitch for a payroll accounting services may make sense. Fringe benefits are confusing. Unless someone shows you how. Then it’s easy. Again, as a payroll CPA I try to make you self sufficient in Payroll, with us as a safety net. Paychex has expanded into providing fringe benefits, and from what I’ve seen, at reasonable cost. So incurring their payroll service fees, as a gateway into utilizing these fringe benefits, might make sense.
Your Payroll Accounting Software
Be sure the updates are installed properly. Even Quickbooks payroll requires knowlegable setup. Payroll has lots of intrinsic check points, so you know when the numbers are “off”. Instead of providing full payroll services, sometimes we just spot check a few items every quarter.
Exempt Employees and Fair Labor Standards Act
Overtime is a huge issue right now. It is just easier to be completely legal. Control the overtime worked, but pay it to folks who qualify and worked OT. This link shows which employees are exempt from overtime. Look it up once and you’re set. You don’t need to pay additional fees: the government comes straight out and says who is who and which is which. Note you can use this info to proactively structure work load so you can legally make some over time exempt.
Employees vs. Contract Labor
Companies try to avoid employment taxes and benefits by classifying true employees as subcontractors. There is an IRS initiative now to stop this practice. Possible consequences include making the company responsible for both the employee’s and employer’s share of payroll taxes retroactively if they find a mis-classified employee. Most of these intentional mis-classifications are easy to spot, even on a low-level tax audit.
Garnishments
Child support, student loans, back taxes etc. Again these are easy to administer once someone shows you how.
For a free consult by a Wilmington NC payroll CPA offering payroll services and support, please consider calling us at (910) 399-2705.
