OUTSOURCING PAYROLL A SMART MOVE FOR ANY BUSINESS. Chadwick N. Bordeaux and Donna L. Bordeaux

Transcription

1 OUTSOURCING PAYROLL A SMART MOVE FOR ANY BUSINESS Chadwick N. Bordeaux and Donna L. Bordeaux

2 Table of Contents Introduction Who Benefits? Top 10 Reasons to Outsource Payroll Saving Sense Streamlined Operations Complicated Compliance Technology Getting Started Things to Look for in Your Payroll Partner RedWolf Payroll FAQ We are Different!

3 Introduction In today s competitive environment, many business owners are looking for ways to streamline their company operations, freeing them to focus on more important tasks such as customer service, boosting profits and planning for future growth. Outsourcing payroll is one way to reduce administrative duties and give managers and employees the flexibility to focus on moving the business forward. Payroll is an essential part of running any business because, quite simply, all employees expect to be paid in a timely manner. Unfortunately, paying employees isn t that simple. Tax laws, worker s compensation and state unemployment insurance costs, 401(k) and insurance deductions, and other compliance issues complicate the process, making hiring a single staff bookkeeper or accountant a thing of the past. Today s payroll even for the smallest of companies requires trained accountants with expertise in payroll regulations, government compliance and computer technology to process payroll efficiently and accurately. For these reasons, many businesses are outsourcing payroll, which basically means hiring someone outside the company to handle payroll duties and other related operations. These independent contractors can simply cut paychecks or provide a comprehensive solution, offering a variety of integrated services. 3

4 Who Benefits? Unless you are a payroll accountant, chances are you did not go into business because you wanted to do payroll. While it is a necessary part of any business, the technicalities that go along with it are headaches most business owners and managers can do without. While outsourcing payroll is particularly advantageous for small- to medium-sized companies, it can make sense for any size business. It eliminates the trouble of hiring a payroll accountant or staffing an entire payroll department and places the burden of compliance on trained professionals. 4

5 1...Saves money Top 10 Reasons to Outsource Payroll 2...Streamlines the business 3...Allows employees to focus on moneymaking side of business 4...Can integrate a variety of administrative services 5...Provides continuity and reliability 6...Frees company from dealing with compliance issues 7...Avoids IRS penalties 8...Eliminates technology headaches 9...Takes advantage of outside expertise 10...It is convenient and secure 5

6 Saving Sense Today s payroll has evolved into something much more involved than the handwritten paychecks and ledgers of the past and are even more advanced than those practices of a decade ago. Unfortunately, these sophisticated procedures call for cutting-edge technology, advanced software and up-to-date training that are often a huge financial burden on businesses of any size. Additionally, according to the IRS, 40 percent of small businesses pay an average penalty of more than $1,100 per year for late or incorrect filing. Payroll service professionals are specially trained to follow a host of frequently changing requirements, rules and regulations mandated by the IRS and other government entities, and most offer a guarantee, taking responsibility if penalties occur. Outsourcing payroll allows a company to save money in a number of ways including:.the business does not have to hire and manage a payroll accountant or department..the business does not have to provide its employees with expensive, up-to-date training each year..the business avoids IRS penalties and other government fines if not in compliance..the business does not have to pay for and manage expensive technology required to run payroll operations. 6

7 Streamlined Operations Outsourcing payroll frees business owners and managers to focus on profitable and strategic aspects of the company without having to worry about many day-to-day administrative tasks. Hiring an outside payroll department eliminates much of the paperwork associated with payroll and gives managers the peace-of-mind about compliance issues. In addition, managers do not have to worry about problems that may occur with undertrained employees or employee turnover, providing a continuity and reliability in the business. The sudden departure of a key accounting employee could disrupt payroll, plus it is often difficult to hire and retain qualified payroll employees. Removing payroll tasks also can free up well-performing employees to do more challenging, productive and enjoyable tasks. Outsourcing payroll also provides tighter control over sensitive employee information. In a small business office, where payroll may be managed by more than one employee, it is often difficult to maintain confidentiality. Basic payroll processing services can include calculating paycheck and tax obligations for each employee, printing and delivering checks, and providing management reports. However, more advanced payroll companies can provide comprehensive human resources (HR) services, further streamlining the administrative operations of a business (see below). 7

8 Complicated Compliance Following rules and regulations related to payroll and other human resources administration has become extremely complicated and results in stiff penalties when mistakes occur. In fact, many managers find that they can justify the cost of outsourcing payroll just by preventing the cost of tax penalties. Hiring an outside firm to handle payroll and perform other HR tasks can relieve much of this burden from a company s owners and managers. Common general mistakes payroll employees make include poor record keeping and organization, not keeping personal information confidential, and check fraud. Poor record keeping can lead to a company being unprepared for an audit, or unable to provide records requested by the IRS or other agencies. More specifically, payroll staff members often:.forget to make payments or make them late..botch IRS forms, especially employee W-2s, MISC, and W-4s..Miscalculate overtime payments..forget other taxable items such as bonuses, gifts, and company vehicle use..mishandle employee reimbursements..mismanage other payments/withholdings such as child support and court-ordered debts or fines. 8

9 .Do not understand labor or employment tax rules. In addition to helping companies avoid IRS penalties, specially trained accountants can help manage:.workers compensation and state unemployment insurance (SUI) costs.collecting and remitting accurate health and dental insurance premiums.the administration of a company s retirement and section 125 plans.paperwork associated with Direct Deposit, a benefit most employees prefer.employee leave.monthly or semi-weekly submission of other state and federal reports and payments 9

10 Technology When a business outsources its payroll operations, managers don t have to worry about the endless upkeep of ever-changing payroll-related technology and the troubleshooting that is often involved. The outside firm takes care of maintaining smooth-running systems, including installing the latest software versions and subscribing to the latest tax tables. Some firms can even enter payroll data and information from hard copy forms for small businesses with little staff time or computer knowledge. 10

11 Getting Started If you believe your business is a candidate for outsourcing payroll, it helps to assess the needs of your business before contacting an outside firm. Sit down with key players in your company and consider:.what works and what doesn t work with your current payroll system?.what would you like to change?.how many employees do you have, and what are your plans for future growth?.what services would you like the payroll outsourcer to provide?.how much could a timekeeping system save? If you decide to partner with a payroll processor, that firm will provide you with software for tracking each employee s pay rate, deductions and vacation time and train you or your employees to enter payroll data. Most software is Web-based and allows you to access your payroll from anywhere, but some companies may transmit by fax. 11

12 Things to Look for in Your Payroll Partner.Payroll outsourcing should be its core business..the company should be experienced in payroll outsourcing..the company should provide client referrals ask about customer service, efficiency and timeliness..inquire about the experience and expertise of the company s employees..the firm should be flexible and able to handle growth..make sure the company uses current technology and easy-to-use software..ensure that you retain control over your payroll data..discuss paycheck time frame..discuss other services offered that your company may need. While outsourcing payroll is convenient, reliable, confidential and secure, business owners need to make sure they are not completely separated from the payroll process because they are ultimately responsible for the deposit and payment of federal taxes. The IRS recommends that employers maintain their address of record with the IRS and not change it to the payroll service 12

13 provider s address, and that they make sure their payroll service is using EFTPS (Electronic Federal Tax Payment System). Employers can register on the EFTPS system and get their own PIN, allowing them to confirm payments made for their business. This service is provided at no cost by the U.S. Department of the Treasury and allows employers to verify payments 24 hours a day, 7 days a week, through the Internet or by phone. (For more information, go to <EFPTS.gov> or call (800) ) 13

14 RedWolf Payroll RedWolf Payroll offers a complete range of payroll services designed to save you time and money. The combination of easy online payroll data entry and personal service makes RedWolf Payroll a smarter alternative to large payroll service bureaus. Our flexible setup options allow you to customize your payroll to meet your unique needs. At RedWolf, your calls are answered by CPAs and payroll professionals. Compare RedWolf to the typical large payroll service bureau where calls are taken in a large call center and are assigned to the next available representative. Or, if you step away from your desk at a scheduled call time, you get stuck in an endless loop of phone tag and maybe even late-processing fees. OTHER BENEFITS INCLUDE: Online Entry. Our easy online payroll data entry is secure, fast and efficient. Electronic checks can be printed from your office or delivered to you. Online Access. Your employees will have 24/7 access to their personal payroll documents, including pay stubs, W-2s and W-4s through the Web. General Ledger Reporting. We will provide detailed and summary reports based on your chart of accounts. We will provide you with the necessary journal entries to keep your accounting records accurate. 14

15 Electronic Reporting. All of your reporting is available to you and to your employees 24/7 over a secure-web portal. Laser-Generated Signatures. Have your signature securely printed on each check saving valuable time that you can use to run your business. Paycheck Printing. The option to print payroll checks from your own printer. Direct Deposit. Electronically deposit employees pay directly into their bank accounts. Company Logos. Have your company s logo printed on your checks. Benefit Accruals. Our systems will keep up with your employee s vacation and sick time for you. Their current accrued balances will appear on their check stub. TAX FILING RedWolf Payroll offers a complete tax service solution for your payroll compliance needs. We help ensure your compliance with government regulations by automatically calculating, filing, depositing, and reconciling your local, state and federal payroll taxes. In addition, we monitor current and upcoming payroll tax laws in order to advise you appropriately. EMPLOYEE BENEFITS Section 125 Reporting: Detailed reports show the employee deductions for Section 125, including Flexible Spending 15

16 Accounts as well as premiums paid for health care and dental care. Retirement Plan Administration: Through our partnerships with various retirement plan providers, we can maximize the benefit you can provide to your employees. Just because you are small doesn t mean you should have to pay a premium. Our partners are able to offer you an affordable solution free of hidden fees. Pay As You Go Worker s Compensation Insurance: Our partnership with The Hartford offers you insurance from a toprated company, improving cash flow and ensuring the accuracy of your premiums while making the process more convenient. TIME AND LABOR RedWolf offers several Time and Labor solutions for your business. Our systems can easily integrate with most timekeeping/ time clock systems or we can help provide a complete solution for timekeeping systems to save you money. Online Data Entry: Data entry can be done from our easy online portal. It is fast, efficient and secure. Employees can also track time from their smartphones. Advanced Solutions: For more advanced timekeeping applications, RedWolf fully integrates with the SwipeClock solution. SwipeClock is an online electronic time and attendance solution for all businesses, both large and small. It combines the convenience of online access with the familiarity of a conventional wall-mounted time clock, PC, and telephone. The service is entirely online, so there s no software to buy, install, or manage. This solution was designed 16

17 with everyday people in mind as it can be set up within seconds, and editing the timekeeping data via the Web is simple. TimeClock and WebClock are two primary products and methods used to collect timekeeping data via the SwipeClock solution, offering exceptional user ease for the setup and dayto-day use. TimeClock and WebClock offer a valuable, practical solution for daily timekeeping needs. For clients in need of both collection methods, these two devices can be networked to function simultaneously on any single account. VoiceClock and BioClock are additional, telephone-based time tracking devices that can be used independently, similar to other SwipeClock solutions, or that can be integrated with TimeClock, WebClock and VoiceClock. 17

18 FAQ HOW DO I SUBMIT MY PAYROLL INFORMATION TO REDWOLF PAYROLL? RedWolf Payroll works with its small business clients to form flexible solutions to meet their needs. Our convenient online entry allows employers to enter employee payroll information at the convenience of their schedule - not ours. RedWolf Payroll also has solutions to allow employees to submit their own time, which is then approved by the business owner or payroll administrator. DO YOU FILE AND PAY MY PAYROLL TAXES FOR ME OR DO I HAVE TO REMEMBER THEM MYSELF? RedWolf Payroll works closely with its small business clients to develop solutions that allow them to spend more time working on growing their business, rather than completing administrative tasks. When your payroll is processed, we will draft all associated taxes so you do not have to worry about upcoming tax bills. We file all payroll tax returns and make the deposits. Don t worry about watching your calendar - concentrate on making money instead. WHAT KIND OF ONLINE ACCESS WILL MY EMPLOYEES HAVE? WILL I HAVE TO HANDLE ALL OF THE PAPERWORK OR CAN I HAVE MY EMPLOYEES DO IT THEMSELVES? Employees will have self-service access to their own secured web portal where they can download pay stubs and W-2s. They 18

19 can also make changes to their address, personal information, and W-4 information. WHAT HAPPENS IF ALL OF MY EMPLOYEES DO NOT HAVE CHECKING ACCOUNTS FOR DIRECT DEPOSIT? In additional to traditional paper checks, we can also offer pay cards to serve employees without checking accounts. Eliminate the need for employees to go to the bank during the middle of their workday or extending their lunch hour. WORKERS COMPENSATION INSURANCE IS SO EXPENSIVE. ARE THERE ANY SOLUTIONS REDWOLF PAYROLL CAN HELP ME WITH? We offer access to pay-as-you-go workers compensation insurance carriers. With the importance of cash flow in today s business environment, this can help eliminate the need to pay a large premium in advance of receiving the income. I HAVE EMPLOYEES THAT ARE IN OTHER STATES BESIDES YOUR LOCAL AREA. CAN REDWOLF PAYROLL STILL HELP ME? Yes! We process payroll for businesses and employees in all 50 states. 19

20 We are Different! RedWolf Payroll stands for professional service. We believe that our clients deserve personal, responsive and professional services. We know our clients by name, not by a number. When you work with RedWolf Payroll, you are partnered with a professional accountant who works with you on an ongoing basis. You will never be given to a random data entry clerk who does not understand you or your business. RedWolf Payroll stands for flexibility. We believe that every small business is different and their payroll service needs to be flexible enough to meet their individual needs. Payroll is not a one size fits all service. At RedWolf Payroll, we offer customized solutions to every business that we work with. RedWolf Payroll is experienced. Our staff is well versed in all aspects of payroll, tax and employment matters. We have been working with Charlotte businesses since We can help provide specialized guidance and are able to handle complex matters that often trip up larger national payroll companies. RedWolf Payroll is priced affordably. Because we are a smaller firm, we do not have many layers of corporate overhead that needs to be accounted for in our prices. We also do not have to hit our clients with large rate increases every year. We are consistently able to provide a much high level of service at a much better value. Contact us today for a complimentary consultation about how RedWolf can help cure your payroll headaches: (704) (WOLF) or call toll-free at (888) (WOLF). 20