Perfection is a goal only achieved through the painstaking process of determining problems and preventing them from reoccurring. Accordingly, the following payroll processing vendors present problems many of their users have had in the past accompanied with ways to identify and remedy them. For example, maintaining healthy standards of communication and understanding between CPA, client and software is an excellent way to strive for a perfect payroll.
“This lack of understanding [of payroll software] and validation of accuracy can put the CPA at risk as there are several cases where the CPA is responsible for their client’s payroll taxes and possible penalties,” said Chuck Gossett, CEO of Cougar Mountain Software. “We believe the entire accounting department as well as external bookkeepers, auditors, and CPAs should be familiar with the accounting software which is being used…This involvement minimizes the exposure risk for CPAs and other parties.”
“A major obstacle can be the time gap between the payroll specialist (CPA) and the client fulfilling their respective roles,” said Mohammed Ghani, president of CheckMark. “It is important that both the client and the CPA have access to all information either through a web portal or a cloud application.”
Gathering data and maintaining the ability to share data among all software a CPA uses is an essential. A CPA can integrate every piece of software into a practice with all other currently used tools in mind.
“One key potential problem with payroll processing software is with information gathering and management,” said Chandra Bhansali, co-founder and CEO of AccountantsWorld. “Whether it’s obtaining timesheets with hours from employees, locating the correct unemployment rate for each new year from employers, or getting information about third-party payments, these are all significant challenges. CPAs need software that provides visibility into the information they need – for example, enabling them to easily review payroll information for a client’s look-back period to determine whether to change the client’s federal tax deposit frequency – and that helps them to collect information on a timely basis with automatic reminders, and easily-generated custom or batch emails.”
“Since the CPA’s major concern is often preparing his client’s financial statements, his Payroll software must also include write-up integration and/or provide built-in General Ledger summation reports for quick export to the write-up system according to client’s specific chart of accounts,” said Ken Garen, president and co-founder of UBCC.
“One of the most common problems CPAs have with payroll processing software is the seamless integration of their payroll solutions into accounting software,” said Ralph Matlack, director of product management, small business payroll at Intuit. “Not all payroll solutions can perform data sync with accounting software, which can cause manual data entry errors or require more client action.”
“Using inadequate payroll software can now become a problem where it wasn’t before,” said Ray Fazel, president of Paymate Software. “The businesses that do need this kind of detail (and not all do) require a robust system that is flexible and easily capable of integration with accounting, time & attendance, scheduling and other software. The solution to the problem is seemingly simple, but often harder to execute: switch payroll software, or upgrade to the next level of the same software that can handle the required payroll/accounting complexities. Making the switch can be hard, but definitely worth it.”
A CPA must keep the IRS in mind with every step taken. This means knowing tax law and ACA compliance to ensure complete compliance for all clients.
“Learning the compliance rules of a particular industry may be so difficult that the CPA may decide to turn away payroll work rather than invest in learning those rules for only one client,” said Tom Douglass, president of Advanced Micro Solutions. “For this reason, many CPAs decline to perform payroll services for restaurants while other CPAs specialize in that service. Similar situations arise in other industries, such as agriculture or construction.”
“Changes to payroll laws, regulations, rates and forms are ongoing and rapid,” said Jim Paille, director of compliance, myPay solutions at Thomson Reuters. “It is essential to team with a technology vendor that can keep up with the ongoing payroll tax compliance changes that take place on federal, state and local jurisdiction levels.”
“The company needs to make certain all information needed by the CPA is accurate and timely, ensuring that employees can be paid on-time with the deductions and benefits calculated, and all reports and taxes can be filed and paid so no penalties are accrued,” said Ken Hilton, president of Red Wing Software. “Therefore, more important than the software used, is ensuring that a written process is established and followed to the letter by all involved at both ends of the relationship.”
“One of the biggest risks for a CPA offering payroll services to their clients is compliance. It is important to ensure the payroll processing software they use can help them comply with current federal, state and local regulations,” said Anthony Horton, vice president and general manager – specialty products at ADP. “To mitigate the risk that exists in in this environment it is imperative that CPAs partner with a company who has the expertise and ability to assist them in adapting to these regulatory changes quickly… CPAs should also look for an organization that will file their clients’ payroll taxes and has a team of payroll professionals readily available to offer help.”
By taking this advice a CPA may become a fountain of wisdom and perhaps even perfect at payroll. It’s one thing every employee insists on.
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