At first glance payroll processing seems quite uncomplicated and easy, but that is only until you actually get involved. Payroll processing is serious business and can get messy, which is precisely why most business owners prefer to outsource it. Besides, what better way to lose employees than irregular and incorrect payments; who wants that?
So it is perfectly normal for companies to outsource their payroll and related tax responsibilities to third party service providers. Now these service providers know how to do payroll processing. They can streamline your business operations collecting and depositing your payroll taxes on time and also file payroll tax returns with the federal and state departments for you. Today most business owners don’t have the time to interact and follow up with payroll processing companies once the job has been given out. Unfortunately, most service providers know this and some unscrupulous payroll processing service providers use this knowledge to their advantage. Here are some signs you should watch out for to know if your payroll processing service provider is taking advantage of you.
- If payroll tax monies are being withdrawn from your account and put into the payroll company’s account much before the taxes are due.
- If you get a letter from the IRS stating taxes haven’t been paid when you believe they have been paid.
- If your emails, calls or queries to the payroll company are ignored or you get the standard “We will get back to you” response.
In the event of any suspicious activity, take action. Contact the IRS for details of your payments when in doubt. Keep track of the tax due dates for your company; be involved. Cancel your contract with the company if you find they haven’t been honest and, this is important, spread the word. Don’t let any other unsuspecting business owner be duped by a fraudulent company that claims to know how to do payroll processing.
However it will be wise to avoid this scenario all together, which is why we recommend thorough research and interaction with peers before you take any decision. Don’t let yourself be fooled. Be smart.