Eliminate expensive payroll errors from your accounting practice
Processing payroll is something every accounting firm has to deal with. But when deadlines loom and forms pile up, it’s easy to make mistakes.
Too many mistakes.
Thankfully, there’s a better way. Let’s talk about how technology can help improve accuracy.
In this post:
- Why Accuracy is Important
- The Price of Being Wrong
- Automatic Prevention of Frequent Errors
- Features that Improve Accuracy
- Pick the Right Software
Why Accuracy is Important
Keeping payroll accurate is important for a few reasons:
Accountants sometimes manage payroll for numerous clients. That means tracking year-to-date tax calculations, withholding deductions, and filing deadlines for dozens (or even hundreds) of employees at once.
Avoiding payroll mistakes requires intense focus to details. Add in complex tax code changes at the state and federal level and you’ve got the potential for disaster.
The best payroll software for accountants can take much of this burden off your shoulders. Instead of relying on memory and bank of spreadsheets, let payroll software manage payroll accurately – freeing up more time for you to do what you love.
Think about how payroll errors happen today:
Operators manually enter payroll information into spreadsheets. They remember critical tax deadlines and try to avoid mistakes.
Payroll software eliminates much of this guesswork. It automatically applies the right tax rates, tracks deadlines internally, and completes payroll with minimal human intervention.
The Price of Being Wrong
Making mistakes on payroll is bad for business – literally.
According to IRS data, 40% of small businesses pay penalties due to payroll filing errors. That equates to roughly $845 per business annually.
However, the IRS is only one client you may miss penalties from.
Few things are more frustrating than paying a fee that you shouldn’t have to pay. Whether it’s the IRS or one of your accounting clients, payroll mistakes are bad news.
Companies that utilize payroll software experience 31% fewer errors when preparing payroll than their competitors who stuck with manual methods.
For accounting firms, mistakes are amplified.
Make one mistake on payroll for 1 client. Now imagine making that mistake 50 times. Software helps eliminate errors before they happen.
Automatic Prevention of Frequent Errors
So what payroll errors are we talking about?
The most common mistakes occur when keying in data. Whether it’s transposing a number, miscalculating overtime wages, or neglecting to update a tax rate, manual data entry is prone to mistakes.
Payroll Software helps prevent mistakes by:
- Updating tax rates as they change
- Removing math from the equation
- Tracking filing deadlines
- Automatically importing data from time tracking systems
- Creating audit trails to verify accuracy
See how checking these items off automatically improves accuracy? Payroll software acts as a safety net for accounting firms.
It catches mistakes you may not catch during rush season. And it does this every single payroll cycle without complaining.
Features that Improve Accuracy
Not all payroll services are created equal.
When evaluating payroll services for accuracy benefits, pay close attention to the features that matter most to accounting firms.
Automatic Tax Calculations
Tax rates change often. Between Federal, State, and local taxes you have to manage rates throughout the year.
Tracking these changes manually is near impossible when servicing multiple clients in different states.
Quality payroll software automatically updates tax rates. It imports the latest tax tables and applies them during payroll runs without you having to lift a finger.
Error Detection Alerts
Don’t rely on memory to track important deadlines and calculations. Smart payroll software detects potential problems and alerts you immediately.
Whether it’s an unusual calculation, an upcoming deadline, or incomplete data, the software will notify you before payroll is processed.
Stay compliant by knowing ahead of time when something doesn’t look right.
Compliance Tracking
Payroll compliance isn’t just about filing taxes correctly. There are many deadlines, forms, and rules to keep track of.
The penalty for missing one federal filing can be hundreds (if not thousands) of dollars. Software can track ALL of your compliance deadlines.
You’ll receive reminders before they’re due, automated forms will be created on-time, and your records will be maintained for future audits.
Integration
Data entry errors occur when information is transferred between systems.
Time punches from a time tracking system need to be keyed into payroll software. Without integration, that information is prone to human error.
Look for payroll software that integrates directly with your accounting software, time tracking system, and HR solutions.
All of your data should seamlessly flow between systems without worrying about making data entry errors.
Pick the Right Software
Every accounting firm has different needs.
When looking for payroll software, consider:
- How many Clients will you service?
- How many Employees does each client have?
- Will you manage multi-state payroll?
- Do you need integration with existing software?
- What reporting features do you require?
- What support and training do they offer?
The right software should fit into your workflow seamlessly. It shouldn’t make things more complicated. As your business grows, the software should grow with you.
Speak with sales representatives to learn more about the software. Find out how easy it is to integrate, what training is provided, and what customers say about the product.
Wrapping Things Up
Running an accurate payroll service is one way accounting firms can set themselves apart.
Manual payroll is stressful. It opens your practice up to unnecessary risk and sucks away hours of your time that you could be spending with clients.
By allowing payroll software to automate your payroll process, you can forget about:
- Doing complex calculations
- Wondering if tax rates are up-to-date
- Late fees from the IRS
- Data entry mistakes
Remember, your time is valuable. Don’t waste it entering payroll information into spreadsheets when software can do it for you.
Not only will you improve accuracy, but you’ll regain valuable time to focus on what you love about being an accountant.
Accuracy is just one advantage of modern payroll software.
