Fourlane’s biggest monthly expenditure is payroll. That’s pretty typical for many companies, especially those that don’t keep inventory. For us, it’s crucial to keep our payroll accurate and up to date, and I’m sure it is for you, too. If you outsource your payroll, an audit from an outside vendor provides checks and balances to ensure that your vendor is providing accurate service and meeting your goals.
Here are 3 reasons we do an internal payroll audit and recommend our clients perform one, too:
1. Accuracy. With so much of our monthly revenue on the line, we need to ensure our payroll is accurate and up to date. For example, a recent client audit found incorrect agency rates. Without an audit, that error would have continued and could have cost the company thousands of dollars.
2. Compliance. Payroll is monitored by state and Federal tax entities. Federal laws require all employers to maintain accurate records to verify they are making the correct contributions. Ensuring your FICA, withholding, state or local taxes, and unemployment taxes (in some states) calculate properly is important to avoid penalties. Our payroll audits frequently turn up errors in AFLAC deductions and Health Savings Account setup, for example, that could end up costing the company a lot of money.
3. Accounting. Errors in accounting, incorrect recordkeeping and inefficiencies can thoroughly mess up your bottom line. Incorrect QuickBooks setup is a big culprit in many of the common errors we see when performing payroll audits. Checking your QuickBooks setup will save you trouble, now and in the future. Incorrect mapping of payroll expense accounts and liabilities accounts in QuickBooks is a typical error we see. Recently, a client was making double payments on his liabilities inside of QuickBooks. Ouch!
Fourlane’s Luciana Fortune-Bass is certified in payroll audits by the National Association of Certified Public Bookkeepers, and performs all of our client audits. She provides clients with a comprehensive breakdown of payroll errors, recommendations for correcting the errors and a list of penalties the client will incur if the errors are not fixed.
Payroll audits are just a part of best business practices. Contact us today to schedule one.