“I truly believe communication is critical in a payroll setup. So many sole proprietors and single member LLCs end up paying themselves on payroll and they are not legally allowed to,” says Dawn Brolin, CPA, a well-known QuickBooks and accounting educator and speaker.
How to Prepare for Your First Payroll Engagement
Contributed by Dawn Brolin, CPA, CGMA, www.powerfulaccounting.com
- Determine if client has an EIN, state registration number, and unemployment registration (and if not, register for these)
- Determine the entity structure
- Require all employees to fill out a W-4, state W-4 (if applicable), I-9, and direct deposit form (if applicable)
- Request copies of employee contracts – if they don’t have these, help client understand they should consider implementing this procedure
- Determine the best payroll option for the client (full service, client self-prepare (using software), or a combination
- Set the expectations with the implementation and activation plan (plan ahead, do not assume payroll can be run within 48 hours of the initial setup)
- Run payroll!!!
How to Decide Between In-House or Outsourcing Payroll Services
Contributed by Stacy Kildal, Advanced Certified QuickBooks ProAdvisor, www.kildalservices.com
These are the questions to ask – they actually apply to both accounting services that are considering offering payroll services to clients, and to clients that are considering doing payroll themselves.
- Determine how comfortable you are in dealing with special payroll issues should they arise: garnishments, deductions, misapplied liability payments, and so on. Because most issues are highly time sensitive, will you have the ability to deal with them quickly?
- Will you have easy access to the documents required to handle special payroll situations?
- Do you have the experience to know best practices involved in managing payroll issues properly?
- If you need to take time off – for whatever reason, planned or unplanned – do you want to carry the burden of making sure payroll is processed on time, all liabilities are paid, and returns filed?
- Do you want to be bothered with payroll or would you rather just submit hours and know everything will be taken care of?
How to Organize Workflow of Payroll Services Provided to Clients
Contributed by Mark McAndrew, Director of Consulting, XCM Solutions www.xcmsolutions.com
In general, accounting firms should go through the following steps to set up their payroll clients’ workflow:
- Identify the payroll clients
- Using a workflow software solution, create a payroll task for each client
- Determine if the payroll task is weekly, monthly, quarterly, semi-annual, etc.
- Assign internal due date requirements based on the tracking needs for each client
- Define a consistent process that each client task will follow (prep, review, etc.)
- Determine the level of detail the firm is looking to control (for example: firm or client specific procedures or possibly no additional details)
- Assign the work to the staff (a workflow system such as can automate the assignment process)
- Ensure staff follow the defined process
- Report on your clients, as necessary
See inside February 2015
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