You have a lot of faith in your accountant or accounting firm. As you well know, an in-house bookkeeper has a lot on his or her plate — adding payroll to that already full plate isn’t just a bad idea, it’s a terrible one. Don’t believe us? We practice what we preach.
Though many of our clients use both services, our accounting and payroll services are independent of one another. Why? There are a couple of big reasons. The biggest being that both payroll and accounting have gotten more and more complicated. There are so many ways that bills are paid and how businesses get paid. These days you’ll have to deal with apps like Zelle, Venmo, and Paypal – even more if you are a restaurant (Doordash, Uber Eats, etc).
Additionally, it’s very unlikely that your payroll timeline matches up perfectly with your accounting practices. In the end, that ends up wasting time. For us, it just wasn’t an efficient use of our time. We’re betting it’s probably the same for you. Here are some advantages of pairing your in-house accountant or CPA with a designated payroll specialist or payroll company.
A payroll service bureau will work with your CPA on correct tax designations
When you start working with a payroll service bureau, they’ll ask you a series of questions to ensure your benefits have the correct tax designation. What kind of stuff do they need to know? We’re glad you asked. They’ll cover:
Health savings accounts
These are important questions. They’ll help your payroll service bureau work alongside your CPA to make sure that you’re covered when it comes to taxes. If not done correctly, you could have expenses disallowed during tax season – OR you may be paying more in taxes than you should. Don’t do that! Hire a payroll service bureau.
Payroll service bureaus help you navigate an increasingly complex compliance landscape
As your company grows, your needs become more complex. Take ACA compliance for example. When you have 50 or more full-time and full-time equivalent (FTE) employees you’re required to offer them health insurance benefits that comply with ACA regs — and your insurance has to meet an affordability test and offer minimum essential coverage. A payroll service bureau will help you with 1095 forms (and 1094), and create ongoing (monthly) tracking to know when employees become eligible for health insurance.
Then there are remote workers who live in different states. A payroll service bureau will help make sure that the proper state payroll taxes are paid depending on where these employees live and work. That can be a lot to manage - and correctly - for someone not experienced in dealing with this.
Speaking of payroll taxes…screwing up payroll taxes can result in huge penalties, tax passed on to owners (trust fund recovery), and even prison! You can minimize these expensive mistakes - largely due to incorrect calculations, missed deadlines and improper reporting - with a meticulous payroll process. As your business grows in size and requirements become more complex, working with a payroll provider may be a better way to support compliance.
In the end, you're hiring a payroll service bureau for their experience
A PSB is going to be more experienced than most dedicated CPAs. Why? They’ve done it more. PSBs are focused on keeping a large number of businesses compliant with respect to payroll taxes. Most CPAs have little to do with payroll matters. PSBs are up to date on payroll tax compliance laws, and they’re great resources. The biggest reason we bring people on to our payroll service bureau (Your Payroll Department) is because owners and accountants simply don’t want to deal with payroll-related compliance and taxes.
It feels good to offload these processes on someone who has a tight system with backups. Knowing that your people will still get paid and you won’t have problems just because someone goes on vacation or gets sick (or a computer system goes down). Properly-paid employees are happy employees.
Get a payroll service bureau that partners with your CPA
Think of these two parts of your business like Batman and Robin. You need both working together to have peace at your company. Your PSB shares data with your CPA so your CPA can help you make more informed decisions. When they work together, it’s a recipe for success. Interested in seeing what a payroll service could do for you? Let’s chat!