Why You Need to Outsource Your Payroll and the Best Way to Do It

You didn’t open your own firm so you could spend your time keeping up with complex and frequently changing federal, state, and local payroll tax laws. 

Payroll services allow you to:

• Use your staff more efficiently by letting your provider handle payroll and the associated legal details

• Eliminate the costly risks of calculating and filing your own payroll taxes

• Focus on your core competencies

• Get comprehensive reports quickly and easily

What Are Your Options?

1.    Pay your CPA. You wouldn’t pay a surgeon to draw blood when a phlebotomist pulling blood many times a day can do it painlessly and inexpensively, so why pay a CPA to run your payroll? It could cost you three times what a dedicated service would, and you’d likely struggle to get copies of reports and forms that you’d have easy access to otherwise.

2.    Pay an internal employee to run payroll in Quickbooks. This is a disaster in 95% of the cases we see. You may already have a copy of Quickbooks that will run payroll, but your employee would still be required to initiate tax filings on time and be expected to know enough to review the reports and approve everything because Quickbooks doesn’t accept any responsibility. Most importantly, we’ve seen many instances where Quickbooks made errors which weren’t caught until years later (if ever).

3.    Contract with a dedicated payroll provider such as Paychex, ADP, Gusto, Sure Payroll, etc. This is my preferred option as:

• Depending on the service, number of employees, and a few other factors, this option generally costs around $55 - $120/mo

• The payroll service takes responsibility for making deposits and filing returns in a timely manner

• Running payroll can be automated or completed through a simple interface. For those clients who are uncomfortable with doing this themselves, we can set up the automation or enter your payroll for you with about 10-15 minutes per payroll.

IMPORTANT NOTES

• Confirm with the provider if there are ANY state or locally required reports that they cannot file for you. Most states allow online filing by mass providers, but a few require employers to log in individually to their website to file some required forms.

  
  

• You’ll need to provide your payroll service information—including correct rates and tax registration information—in a timely manner for all required taxing authorities.

  
  

Conclusion: Outsourcing can be inexpensive and invaluable when done right. Payroll doesn’t require a CPA, but enlisting the help of a professional interior design bookkeeper or accountant experienced with the entire payroll cycle and reporting requirements to liaison with the payroll service can make it seamless.