Top 5 Reasons to Outsource Payroll Services to Your CPA Firm
If payroll is something you still do in-house, it may be time to reconsider. But is it better to outsource payroll to a payroll provider or a CPA firm? While both may seem to have their unique advantages, a CPA can give you the attention, efficiency, and expertise you need, helping you grow your business. Here’s why.
1. Focus on What You Do Best
Payroll can be an administrative burden. It is task-heavy, requires substantial recordkeeping, and it’s time-consuming. If you make a mistake, be prepared to deal with perturbed employees, tax authority notices, and penalty letters. Outsourcing payroll frees up your time, allowing you to do what you do best—focus on growing your business.
2. Help Prevent Fraud
Think of all the sensitive information exchanged when processing a payroll—social security numbers, bank account numbers, addresses, and birthdates. That makes you a target for identity thieves.
Partnering with a CPA firm makes a lot sense because CPAs are held to high standard—they legally owe their clients a duty to protect any confidential information. Failing to adhere to best industry practices exposes CPAs to sanctioning by their governing board and legal liability.
3. Special Benefits for the Entrepreneur
If you rely on one person to complete payroll and a different person to prepare your income tax returns, you may:
- Owe a significant amount on your personal income tax return
- Incur underpayment penalties
- Maybe even have to make an installment agreement with the IRS
This often happens when one hand doesn’t know what the other hand is doing.
When you outsource payroll to your CPA firm, they can suggest adjustments to your tax withholdings based on business results! When your CPA handles your payroll, bookkeeping, and tax needs, it allows you to streamline your payments and say goodbye to large surprise tax bills!
4. Complicated Situations
As your business grows, your needs change, and things can get complicated quickly. Maybe you are considering adding employee benefits, such as a retirement plan or healthcare. You may have questions regarding how changes in the healthcare law affects your responsibilities as an employer. Do you have remote employees, or those who live and work in different states? Successfully navigating these types of issues, as they apply to your specific situation, requires understanding of tax issues beyond the expertise of most payroll providers. Luckily, your CPA Firm is the perfect fit for these more advanced scenarios.
5. Outsourcing Payroll is More Affordable Than You Think
The payroll services industry is very competitive, and recent technological improvements have helped providers streamline their processes. Both of these factors have held prices down.
CPA firms are even more competitive through their efficiency, with access to technology that enables them to integrate their payroll and bookkeeping software with their tax software.
Look for firms that will offer you a flat monthly fee for all your needs, in lieu of an hourly rate. Also keep in mind that while unaccredited, low-cost providers may appear to be a better value, they can certainly cost you more in the end as a result of accuracy-related errors and failing to recognize opportunities specific to your situation.
