Moving Your Payroll In House… It Might Be Time

I’m watching a growing trend, and I’m loving it!  Clients are moving their payroll back in house and back under their control, and the reasons are quite interesting.

Payroll services make mistakes, and I’ll bet that’s not news to you. We’ve seen wrong hours, wrong rates, wrong dues deductions; we’ve seen wrong state unemployment rates followed by a large ‘catch up’ amount to get back on track; we’ve seen quarterly state report filings that don’t match the activity on the weekly registers; then there’s the client who uses the payroll service’s workers comp insurance, and they accidentally took out thousands of additional dollars, unannounced and in error!  Good thing it didn’t cause an overdraft, but it certainly impacted their available cash and took a while to clear up.

Did you know that you are responsible for the accuracy and timely filing of all payroll-related information, regardless of whether you use a payroll service or not?  It is rare that I find a client who is checking these reports and payments weekly for accuracy.  I know your bookkeepers are matching the net check amount, and making some kind of entry for the tax payments, but it’s very rare when I find one that is checking the accuracy of the information.  When we bring a new client on to Sage 100 Contractor, and they use a payroll service, they often have no idea what their state unemployment rate is, for example.

We’ve helped quite a few clients make the change back to in-house payroll, and a growing number of them in recent months.  There are some very specific benefits to taking back control of your payroll.

1. They’re saving a LOT of data entry time since they don’t have to match back to the payroll service, especially when there are mistakes this week, and corrections next week, sometimes crossing months or quarters.
2. Their cash flow is greatly improved! Rather than paying all the taxes at the time the checks are cut, and providing those funds at least one day ahead of time, they pay the taxes when they’re actually due. This one change results in additional days, sometimes weeks, and in the case of state unemployment, even months of holding on to your cash longer!
3. They’re saving money! No more Payroll Fees, for one. AND, less time by office staff to match information. AND, saving interest expense on their Line of Credit because they hold on to their cash longer!
4. The Job Cost and Cash information is more timely! Nothing like a deadline to make sure the information is entered on time. One of the most common frustrations I hear from business owners that have payroll services is that the payroll details – job costs, cash on hand – are never accurate because the payroll hasn’t been entered yet (one or more weeks behind). If you bring it in house, payroll becomes a priority to get out on time, so Job Cost information and cash are timely.
5. Tax rates, Union Benefits and Deductions are up-to-date! That means internal union reports are more accurate and tie out with payroll details when audits come up. Also, that means the fully burdened amounts are correct so your job costs are more accurate. And, this info can be shared with the Estimators so they’re using the right amounts in their bidding process.

Payroll processing is not rocket science – yes, you have to be diligent, know the rules, and accuracy is very important, but abdicating to the payroll service doesn’t ensure that all will be well or even accurate.  Take back control of your information and your cash flow! Consider moving payroll back in house.

Intrigued?  Here’s how to find us – 630-850-9039, CustomerSupport@www.syscon-inc.com – CMW