3 Steps to Creating a Payroll Plan Using QuickBooks® Online Payroll

by Heather Satterley

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When meeting with a new client for the first time, one of the most important topics is how they handle their payroll. Payroll is complicated; it is our job as trusted advisors to help clients stay in compliance and identify the most efficient way to handle payroll for their company.

Oftentimes, clients think they understand the law and their obligations, but actually do not, which results in financial penalties. Other new clients I’ve encountered are unpredictable and forget filing deadlines or miss required payments.

That’s where QuickBooks® Online (QBO) Payroll has helped me and my clients. QBO Payroll allows me the flexibility to create a payroll system that gives my client control over their payroll, while allowing me to monitor compliance and entries in to the general ledger. While Intuit offers other great payroll solutions, including Intuit® Online Payroll for Accounting Professionals and Intuit Full Service Payroll, one of the main reasons I recommend QBO Payroll is that it’s right within QBO, so everything is in one place and really easy for me and my clients to access and use.

Here are three steps to create a plan for managing payroll through QBO Payroll that will save you and your clients time.

Step 1: Assess what payroll responsibilities your client can handle

As the trusted advisor, it’s important to look at several factors to determine your client’s comfort level.

Important questions to ask:

  1. Does the client have cash flow issues and postpone making required payments?
  2. Is the client too busy and forget?
  3. Does your client possess the skills necessary to process their payroll and To their own returns?

Be honest with your client when making your assessment. I had one client who insisted that she knew how to handle payroll, but did not make timely payments. She was great at handling the human resources aspect of payroll, such as collecting required forms and running the weekly payroll, but would forget to schedule her required payments. By the time I would come out to close the quarter, she had already made late payments and was assessed penalties. It wasn’t until we added up all the payroll penalties and interest payments that she owed that I was able to convince her that she needed help.

Step 2: Decide how you will be involved in the payroll

Once you determined what your client can handle, decide where you should step in. QBO Payroll gives you flexibility in payroll processing. Plus, because it is built into QBO, you and your client have access to it wherever you have an Internet connection. This provides easy access and easy collaboration. I can log in to QuickBooks Online Accountant each month and click on the Employees tab and “To do” to make sure that my client has completed all necessary tasks by the required dates. With QBO Payroll, I set up the reminder schedule and filing preferences, all the client has to do is follow the “To do” list.

Payroll processing is split into four distinct functions

1. Employee and payroll set up and maintenance.

    • Collecting required information and forms from new hires and managing employee benefits.
    • Data entry and set up.

2. Payroll processing (creating paychecks)

3. Making required payments (taxes, contributions & other obligations)

4. Filing payroll tax returns.

 

You can segregate duties between you and your client based on their comfort level. Built in tools within QBO Payroll make this easy for both of you. Some possible ways to divide up responsibilities:

Situation Client Practitioner
Client only can print checks Prints checks All Tasks except printing
Client is busy but wants to run payroll for employees. Misses payments and does not want to file taxes. Collects required information and manages employee benefits.Creates and prints paychecks Adds/modifies employeesSchedules tax paymentsPrepares and files tax returns
Client has good understanding of employment and tax law, is timely and organized – does not want to file taxes. Collects required information and manages employee benefits.Adds/modifies employeesSchedules tax payments Reviews entries & paymentsPrepares and files tax returns
Client has good understanding of employment and tax law, is timely and organized and is comfortable filing taxes. All Tasks Reviews entries and returns

I find that my clients fall into all four of these configurations and that is what makes QBO Payroll so nifty! First of all, it’s very easy to set up and navigate. And, because it is web-based, I can easily “jump in” and help clients no matter what level of guidance they need. I don’t have to wait to schedule a visit to their office or use remote desktop applications that tie up their computer while I work. We can both continue to be productive and that saves us both time. It also sends my clients automated emails to remind them to run a payroll or that tax payments and filings are due. I can check to make sure they have made the required deposits by going to the Taxes and Forms page and clicking on “view tax payments you have made.”

Step 3:  Train the client on the procedures to complete their portion of the payroll plan

I usually spend at least two sessions with my client reviewing the procedures that I developed and making sure they know what they need to do and how to do it. That way, if the client seems uncomfortable or things aren’t going as planned, I can adjust the plan as necessary.

By following this 3-step plan, my clients are clear on what’s expected of them and it’s much easier for them to stay on track. Plus, since I’m able to go in and check their payroll and their books as well as take care of any of the responsibilities that I take on, I’m confident that the payroll is being done correctly and accurately.

One of the biggest benefits that I like is that QBO Payroll eases the pain of recording payroll entries by integrating the payroll function into the company’s general ledger. With outside or manual payroll services, it’s a challenge to correctly record the payroll entries on the books. When a payroll is run or a tax liability is paid in QBO, the entries are automatically recorded in the general ledger and posted to the correct account. This saves me tons of time when I reconcile payroll at period end. The Tax and Wage Summary report, found by clicking on the Reports menu and selecting payroll, helps me double check calculations and tie payroll amounts to the trial balance.

Super cool extras that Intuit has built into QBO Payroll that I really like:

  1. Downloadable forms necessary to register a business to do payroll such as the SS-4, state registration forms, and new hire reporting are in the Taxes and Forms menu on the Employer Set Up page.
  2. The payroll setup interface is well designed and easy to navigate. It is organized like a checklist of items needed to completed in order to run payroll.
  3. The ability to have multiple payroll schedules allows you to set up additional reminders. For example, one client has hourly employees that are paid weekly and commissioned sales reps that are paid monthly. QBO Payroll will send an additional reminder email to let the client know that they have an additional scheduled payroll to process.
  4. Add-ons such as pay-as-you go workers compensation insurance and free direct deposit.
  5. The ability to track multiple work locations in different states.
  6. Compliance reminders via email and within the Payroll Center in QBO Payroll inform the client of tax and employment law changes that may affect them so they can stay up to date.

Using QBO Payroll has helped me streamline my clients’ payroll. It allows me to collaborate efficiently with my clients and set up systems and controls that help me monitor and resolve compliance issues quickly and easily.

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