“Without proper knowledge of payroll procedure and access to a sound payroll program, it is easy to make mistakes.” Business owners know this to be true. Start adding in the risk of protecting wage information, in-house processing, and maintaining control and security over payroll data, there are too many variables for many employers to consider this an easy-to-manage manual process.
For example, timely payments of wages, taxes and providing access to W-2s can be a major burden in the back office. Often, issues arise in keeping accurate track of overtime, managing constantly changing payroll regulations, remote workers, various employee classifications, and administering unemployment claims. Errors in any of these areas could have a detrimental impact to an employer in terms of compliance and bolstering employee retention.
PEO payroll services lighten the load of managing these tasks for businesses. For example, when businesses partner with a PEO, the PEO is responsible for payment of payroll, FICA, FUTA, and SUTA. In fact, some PEOs offer a certification proving the company’s taxes were paid/filed on time. Request this functionality at the time of solidifying your relationship with the PEO, as it is imperative to outline this potential discrepancy between the business and the State.
Next, the employer or business owner should ask, “How do I submit my payroll information to my PEO?” Given the global need for fast paced, wireless technology, a good PEO should provide accessible software with which employees and employers can communicate. Matters such as time and attendance, paid time off (PTO), tracking holiday pay, sick days, and submitting payroll are key functions that should be included in the user-facing platform. Employees will also need access a detailed view their statements and be able to print W-2 information on-demand. Some PEO’s also provide the option for you to mail in your payroll information if you prefer to handle it manually.
While some businesses may opt to manage payroll functions in-house, it will quickly become clear that there is more to payroll processing than just signing checks on payday. If a business chooses to outsource their payroll tasks, it will be important to ensure the PEO is more cost effective, has quality security in place to ensure the protection of wage and employee information, and is able to maintain control over last-minute updates or changes.
Here are some questions to raise during your fact-finding meeting/session with your PEO of choice:
- What is your process for filing and notifying clients of successful W-2 filing?
- Are there any limitations or processes in place if there are payroll errors or corrections that need to be made same-day?
- Can you explain the security measures in-place to ensure our employee information and wage details are secure?
- What is the cost of filing state and local taxes for multiple states?