Payroll is the amount a business has to pay its employees once after each specific time (usually one month), commonly known as salary. Usually, payroll is the most significant expense of any business.
A few years back, accounting firms don’t handle payroll services because of more effort, high chances of human error, and fewer outcomes. Accountants had to calculate the working hours of each employee separately & then each employee had a different credit hour of salary. A single mistake can cause mispay or overpay an amount that an accounting firm must pay if unrecoverable.
But now the situation is changing, modern software tracks each employee’s working hours on the cloud & you can export data in excel format for further processing. You can also investigate errors quickly using sorting techniques.
Thanks to advancements in tracking and monitoring employees’ working hours. Assigning the payroll tasks to an experienced accounting firm will reduce this hectic process, and the organization will focus on its original goal.
6 Steps to Sell Payroll Services
- Get Payroll Software
- Have All Employees Complete a W-4 Form.
- Apply for EIN
- Add Employee to Payroll Software
- Track Workhours and Time Cards
- Get the Job Done
1. Get Payroll Software
The most important thing you need to start payroll services is payroll software. A payroll application organizes, manages & automates all the transactions of the employee while maintaining payment records in the cloud. Effective payroll software will also track employee time & attendance, so make the final amount based on that. It will be easy to integrate into existing processes.
Here is the list of popular payroll software:
- Dayforce HCM
- Payment Rails
- ADP Workforce Now
2. Have All Employees Complete a W-4 Form.
A second important step is to complete the W-4 Form document of each employee. Independent employees and workers usually have to pay more tax than dependents. To tell employers how much income tax to withhold from employee paychecks, employees fill out a W-4 form.
The form includes the employee’s filing status, dependents, tax credits, and deductions. Upon filing your tax return, you may end up owing taxes if the form is not filled out correctly.
Fill in the W4 form of every newly hired employee.
3. Apply for EIN
Before starting payroll services, first, find out your EIN (Employer Identification Number). An EIN is necessary for anyone who pays employees and is also used to identify your business entity. If you don’t have one, then apply for it on IRS.
4. Add Employee to Payroll Software
Your bank account is connected to a payroll services provider, so you need to add up all employees in software and track their timing and attendance (obviously, the software will do all the process).
Enter employee tax statutes, withholding tax, and crucial details of the W-4 form and their bank account number.
Usually, you need an expert to set up payroll services the first time. After that, it’s an automated process.
5. Track Workhours and Time Cards
Organizations usually use PMS (Project Management System) to track their employees’ working hours and attendance. It’s easy to import data from PMS in excel format, which you can further utilize in payroll software to calculate wages.
Although you can track working hours manually, it will become a hectic task and a high chance of human error.
6. Get the Job Done
Done your first payroll as per schedule; if you are unsure about that, you can also try the process on demo accounts to identify errors.
IRS requires three years of tax forms, so keep the record of your tax returns and payments safely.
Which payroll company is best?
Litaxresources (Long Island Tax Resources) is one of the best payroll service providers. These professional members, including CPA, tax agents, Charted Accountants, manage the payroll task wisely by following a tax-efficient approach.
How do payroll services make money?
An employee company provides them with a schedule plan to do their payroll processing, on which basis they get money making their task done. Additionally, they get paid based on frequency, how often they have to do payroll processing; weekly, biweekly or monthly.
Does a CPA do payroll?
You can rely on a CPA to make sure payroll taxes, insurance, and retirement withholdings are made on time. You can also have your CPA track any reimbursements for expenses or profit-sharing payments.
Do accounting firms handle payroll?
Yes, many accounting firms now handle payroll services due to employee time tracking and payroll service software advancements. Although the whole process is still time-consuming and requires effort, HRMS has made it easier for accounting firms.
Although payroll service provider software has made the half burden lifted, now, it’s accessible than ever to do payroll services. Still handling and understanding payroll software is itself a hectic process & you have to go in-depth to get the job done.
Setting up payroll software for the first time requires much effort and requirements that most businesses assign this task to an accounting firm – this option can be more expensive but has fewer chances of human error, zero fines for incorrect tax filings & reliability.