18663 Ventura Blvd, Suite 227Tarzana, CA 91356
FREE CONSULTATION818-436-2775
18663 Ventura Blvd, Suite 227Tarzana, CA 91356
FREE CONSULTATION818-436-2775
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Personal, Affordable Payroll Services, Bookkeeping, and Tax Processing for Small Business throughout Los Angeles County.

What to Expect from your Payroll Accounting Firm

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Many businesses, large and small, are taking advantage of independent firms to handle their accounting for payroll. Business owners imagine that these firms will do essentially what they themselves may have been doing during the early stages of the business. On the other hand, they may have hired a firm partly to take advantage of industry-standard accounting practices. Here is what companies may expect from their accounting firms.

Error Free Time and Attendance

Businesses deal with accounting issues concerning accounts receivable (customers), accounts payable (suppliers), and payroll (employees). Often, they find the latter group generates the strongest reactions to errors. In a manual timecard system, mistakes can occur at several stages in the process, from the way the time cards are filled out, through the reading and recording of the time cards, to the actual paycheck delivery. This process takes an accountant about 7 minutes per time card per pay period. It includes the following.

-Preparing time cards
-Processing completed time cards
-Computing and verifying time card totals
-Computing aggregate totals across shifts and departments
-Reconstructing lost or damaged cards

The American Payroll Association (APA) estimates a 1% to 8% error rate in this process. On a $10,000 payroll, this could result in an erroneous wage error of several hundred dollars. It can also take several hours to track each error and reissue a paycheck, resulting in additional costs. This underlies the importance of taking advantage of the lower errors afforded by a professional accounting for payroll firm.

Types of Errors

Employees, particularly those who track their periodic wages, are very sensitive to any potential errors. These can include accounting errors, problems with taxes or deductions, or missing overtime pay. Even differences beyond the company’s control such as changes in medical benefits or tax rates can affect a paycheck and cause an employee complaint. During this time, the employee is upset, and is using either personal or company time to resolve the issue. Companies must deal with this important issue.

Choose the Right Payroll Accounting Firm

Many business owners choose an accounting for payroll firm based on which they can trust to offer peace of mind. They choose to contract in order to delegate, and they want problems to be dealt with efficiently and transparently. For these reasons, a firm should carefully choose the proper accounting firm to handle their payroll.