Embezzlement Alert: Who is processing your payroll?

Many companies outsource payroll processing at some level. You would know right away if your employees did not get paid, they would be lined up at your office door. But how do you know your payroll taxes are being paid? How do you know that your quarterly and annual reports to the government are being submitted?

My clients, I will call them NP, asked me to share their story in hopes that it would not happen to you. NP wanted to outsource payroll. They found a company that offered great rates for non-profits. NP did their due diligence and researched the company, talked to references, and contacted the Better Business Bureau. Green lights all around for this east coast payroll service provider. NP received their payroll report packets each payday, money was deducted from their bank account for taxes and they received copies of quarterly reports.

Unfortunately, each payroll seemed to have an error. NP’s bookkeeper or an employee would catch the error and they would correct it in-house. NP found it virtually impossible to get the service provider to fix errors. They finally decided to bring payroll back in-house and called me. I helped them set up payroll and submit corrected quarterly reports that fixed all the errors the east coast company had created.

Then they got ‘The Letter’. Turns out the payroll provider had never sent in any of their tax payments or the quarterly reports. Instead the east coast company had embezzled tens of thousands of dollars from NP and other clients and the owner of the payroll processing service was now in jail.

NOTE: No matter who processes your payroll, no matter who is responsible for paying the payroll taxes, the employer is liable for all payroll taxes period.

There are many levels of services to help you pay employees:

#1 You process payroll in-house utilizing the help of an advisor like an Accountant or CPA as needed.

#2 Payroll processing is out-sourced but the payroll taxes are paid by you in-house.
NOTE: Ensure you have printed (or pdf) copies of the payment confirmations for each tax payment submitted.

#3 Payroll processing is completely outsourced.
NOTE: Protect Yourself! Ensure you get a confirmation number for each payment submitted on your behalf with a preference for a copy of the actual confirmation page.

#4. If all this sounds daunting you can lease employees. This means you are not the employer and are not liable for payroll taxes. You just need to pay your lease.
NOTE: Treating employees like contractors is one of the hottest topics at the State and Federal level. Attempts to avoid the pains of payroll by using “contactors” could lead to lengthy meetings with BOLI and a few other government agencies. Unless the idea of lengthy meetings with government officials sounds fun, don’t risk it, lease employees instead.

Who can help?
The biggest benefit of using local services is the ability to talk to a human, the same humans, whenever you have payroll questions. Money saved with inexpensive online payroll services is quickly lost when errors arise that monopolize your in-house resources.

Visit the Corvallis Chamber of Commerce
Search for: Accountants and/or Payroll to find local resources for payroll processing.

Barrett Business Services in Albany offers Employee Leasing, visit their site or call them at 541-928-4130.
Tell ‘em Jackie sent you.