Do Payroll with an Accountant or 3PL Payroll Company in 4 Easy Steps

Payroll is an essential part of operations for small businesses with employees. The complex employment laws & multiple tax rules can affect various business areas. Moreover, with the growing business, you need to hire new employees, which makes the payroll process even more complex. 

Employee engagement becomes fragile, and they need more tolerance for pay cheque mistakes. Moreover, 49% of workers will begin a new job search after two paycheck errors. So you can only afford an accurate and reliable payroll system.  

That’s where an accountant or a third-party payroll company comes into the picture. 

Process of Outsourcing Payroll with an Accountant/ Third Party Payroll 

Step 1: Hire a qualified Payroll Specialist or Company

 You can outsource your payroll to a payroll service provider firm instead of an individual CPA. Their role will include accurate time sheets. Payroll deductions, tax entry, meeting all IRS regulations, and processing paychecks on time. 

Ensure the accountant has a sharp aptitude, data entry, and advanced excel skills. Besides this, they must understand payroll, accounting, and human resource information systems. While if you outsource to a payroll provider, the firm must bring its software and technical expertise. Learn about the firms’ service package, their competitive edge, how they will deal with private information, etc. 

Step 2– Have all the Necessary Documents

Once you have hired an accountant or outsourced payroll to a company, you must give them all the forms and documents. The paperwork or information required comprises: 

Information of Employee

Ensure all employee tax withholding and their personal information are accurate so that correct W-2s and 1099- MISCs can be sent at the end of the year. Moreover, provide all details related to worker classification, hired dates, and wage garnishment orders. 

Information of Company

If applicable, you also need to offer the payroll specialist your FEIN and state tax ID. It is essential to file taxes for your company. Besides this, let them be aware of any specific state or federal tax regulations your company must adhere to. 

Form I- 9

Complete the employment eligibility verification and authorization form before or on the first day of a new hire. 

Form W-4 

Using the personal information, ‘the Federal Employee Withholding Certificate’ finds out how much federal income tax to withhold from each paycheck.

State Withholding Form

Suppose your business is set up in any part of the US other than Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, or Wyoming. In that case, your employees may require to submit a state withholding certificate. 

Note that you may need to update these documents manually if employee circumstances change. 

If you are outsourcing payroll, according to IRS, you need to report third-party payroll providers using FORM 8655. After this, the payroll provider can legally pay your employees. Moreover, they can prepare and deliver Form W-2, file Forms 940 & 941, and pay the federal government the money you owe. 

Step 3: Trust your accountant & Third-Party Provider

From here onwards, your accountant or payroll provider will manage the payroll. They will calculate employees’ gross payroll and make the necessary adjustments. Besides this, they also deal with payroll-related taxes and deductions. 

Step 4: Verify the reliability of all information

Once the accountant or payroll provider takes charge of the payroll system, you can focus on other essential business operations. Still, periodic check-in would be wise if you have hired a new accountant or outsourced to a new form. Only you, as an employer, are liable for any wage loss penalties. So always verify that the information given to the accountant or payroll provider is correct. 

Conclusion

Schedule a meeting with SKB Accounting now if you want to roll up your sleeves to focus on the primary operations of your business while we take charge of your payroll. We offer a customized payroll system for you, including comprehensive, after-the-fact, and online payroll services.