If a business is going to get into trouble, this is a big one. Big lesson #1: Once you run payroll the trustee taxes (withholding, FICA and Medicare) no longer belong to the business. If you don’t file the proper returns on time there are penalties. If you don’t turn over the trustee taxes on time, there are interest and penalties involved and the IRS will put a lien on your assets and threaten to seize everything. The Boston Business Journal publishes all the scofflaws and how much they owe on a regular basis. Some of the amounts published are incredible. Visit us now!
There are many ways to run payroll services:
Least desired: Excel Spreadsheets: come on people, this is not good!
Unless you are going to hire/train payroll staff this is the second least desired: your software calculates it for you, but you do the rest. For example, you can buy an annual subscription from QuickBooks or Peachtree (I am sure there are plenty of others). What is provided are updated tax tables as well as federal and state payroll reports? You enter the hours, print the checks, file the reports, make the tax deposits, file and pay your state obligations for unemployment, etc. All this has to be setup by you or someone you hire. You can also setup to e-file.
So what is the problem? Not understanding payroll setup is one, not understanding how the software works is another (I have seen lots of double booking of payroll), and here is the big one: cash flow! If you are on a quarterly schedule, the bill when due can be quite large and the business has used the money for something else which legally it cannot do. And don’t forget about confidentiality.
Most desired: outsourced payroll services like bookkeepers Melbourne; yes this costs money! Decide what you need and shop around. It usually depends on the number of employees and the frequency of payroll runs. For example, 3 employees paid bi-weekly are a lot cheaper than someone with 100 employees who pays weekly. I have heard quotes as low as $35 per month to $200 all things being equal.
Common problem areas are payroll record archiving, time-schedules for end of tax year returns or mandatory online in-year and end of tax tear returns. Getting these wrong can lead to protracted damage limitation discussions with HMRC resulting in a significant diversion of time and resources and possibly financial penalties.
I can talk about QuickBooks because that where I have the most experience. They will assist you every step of the way in the setup.
The hardest part is the setup because Intuit must be in full compliance. Everything must be in order i.e. T.I.N.’s, payments and reporting up to date if this is not a new payroll, state information, etc. Once setup, you just enter the hours and send to Intuit over the Internet and they do all the rest! You just have to provide the cash! Doing it this way also accomplishes the accounting! For more information, visit payrollserviceaustralia.com.au today.…Read More