And why not? Tax regulations and rates seem to change without warning. Tracking, maintaining and reporting payroll, benefits and health deductions cost hours and money that don't bring in profits.
Warning: Although it makes sense to outsource these functions, payroll companies need to be monitored.
Payroll companies do not need special government licensing; nor are "professional employee organizations" required to report tax payments to their clients.
ADP, Paychex, and Intuit are household names in the payroll business, but many businesses use small, unregulated firms to handle their payroll taxes. So what's the problem? If a payroll processing company doesn't pay your taxes (on time or at all), YOU are ultimately the responsible party.
WHAT TO DO?
Here are 4 tips for making sure your payroll service is paying your taxes:
- Ask for copies of quarterly payroll reports showing all payments made on your behalf to local, state, and federal agencies, including Forms 940, 941, and 945.
- Make sure that your payroll provider guarantees in writing that they will be responsible for fines incurred due to their negligence.
- Ask for references and actually speak with them.
- Ask your accountant at year end to contact state and federal agencies (secretary of state's offices and the IRS) to confirm that you are up-to-date on your taxes.
For the benefit of both your company and your employees, remember that when you outsource a business function you still need to oversee the process.
Do What You Do Best, and Let Benay Do All the Rest!
Let's face it: most business owners dislike the hassle, expense and seemingly unproductive time on payroll, benefits, etc.
For over 27 years, Benay has been taking care of financial tasks for our clients. We monitor payroll processors carefully, so you can focus on growing your business. If you'd like an evaluation of your payroll processing system, give us a call at 203-744-6010.