April 8, 2019
Third-Party Payroll Management; How to Avoid a Disaster
You manage a private business that has never experienced a payroll crisis. You have yet to experience an issue with overpaying or underpaying your employees, dealing with late fines and violations or improperly submitting your payroll taxes. Why, then, should you consider outsourcing your payroll management to a third-party company?
Because you never know when a payroll disaster might strike.
Often times, companies rush to a third-party payroll management company during an emergency: their payroll manager abruptly quit; they’re being fined for a tax oversight; they’re going through a merger which created a disastrous domino effect of payroll crises. While Wise Consulting does have an efficient and dedicated SWAT team to guide you through any payroll crisis, your business may have already suffered a mistake that could be costing thousands of dollars and immeasurable stress, a dilemma that could have been entirely prevented if you were already outsourcing to a third-party payroll company.
The Experts at Wise Have Seen it All
The experts at Wise have been through every scenario. Here is one that sticks out to Lorry Twisdale, head of Wise Consulting’s Managed Payroll department: She worked with a client recently who required the manpower of Wise Consulting’s SWAT team due to payroll discrepancies during an acquisition. This client, a large company with 700-800 employees, did not outsource their payroll management and was subsequently met with significant issues and confusion surrounding filing their payroll taxes appropriately. This led to tax discrepancies and a claim was filed against the company for tax misinformation, an issue that could have been prevented if the client had outsourced to a third-party payroll company to manage their payroll during an acquisition.
Ultimately, the SWAT team at Wise Consulting had to untangle tax problems that occurred before the acquisition took place, and it took the task force more than 300 hours to completely unravel the issues and return everything to normal again. The client later expressed that there was no way they could have fixed everything on their own, and that the combined expertise of the entire task force at Wise Consulting helped mitigate a disaster that they would have never been able to fix.
Another recent payroll crisis that required the expertise of Wise Consulting was an event in which a business owner had been fined for not calculating a new regulatory pay for non-discretionary bonuses. This resulted in Wise Consulting having to quickly manage the issue before it got back to the Department of Labor. With the help of the team at Wise, a major payroll crisis was resolved before it led to even worse circumstances.
Payroll Mistakes are Common with Internal Departments
What do these two scenarios have in common? What’s the big takeaway? Discrepancies, misinformation and misfilings are all too common in companies with their own payroll department.
Take it from Ms. Twisdale: “when a company has their own payroll department, it is usually made up of one person who has to wear all of the hats. They have to be an auditor, payroll processor, tax consultant… it’s very difficult. By outsourcing, you remove that risk. You get primary and backup help and access to a leader, manager, tax consultant and more right away.” Ms. Twisdale continued by discussing how payroll dilemmas impact business dependability as well. “Not only do issues with payroll impact your clients and employees,” she explained, “but it impacts your business credibility as well.” Payroll mistakes ultimately hurt the integrity of your business and the ability of your management to reliably compensate their employees and handle important tax responsibilities on time and appropriately.
It’s clear that internal payroll departments come with risks for a variety of reasons. You have to deal with employee turnover, leave of absence and vacations, when these risks could be entirely eliminated by making the switch to a third-party company for payroll management. Next time you’re questioning whether or not you should switch to a third-party system, ask yourself these questions: are you completely knowledgeable of every intricacy of payroll tax and regulations? Do you have emergency backup plans A, B and C? Does your company implement a segregation of duties? Switch to a third-party system before a payroll disaster occurs, and put your trust in the hands of an experienced team who knows the drill and have seen it before.
Don’t blindly go through the motions of an aspect of business as imperative as payroll management. Instead, put your trust in the knowledge and systems offered by the payroll experts at Wise Consulting. Contact us today for more information.