Handling Payroll Audit Functions – In-House or Outsourced?

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Payroll or compliance audit refers to the function of identifying a company’s payroll processes. It determines compliance issues related to employment laws, detects human errors, validates withholding taxes, and checks possible payroll fraud.

 

Need for Audits

Business organizations must conduct payroll audit on a regular basis. This is an effective way of preventing minor problems to get more complicated. Thus, HR and Payroll managers must be on the lookout for these concerns:

  • Clock in of wrong working hours
  • Non-removal of dismissed employees
  • Errors in manual data feed and computation
  • Close deadline for inputs caused by lengthy processing time
  • Redundant and obsolete employee laws

 

A straight-forward payroll audit will not only pinpoint problems but also help HR in strategizing other essential functions like budget preparation and review of accounts. Incidentally, here are the primary reasons for conducting this payroll review.

  • Verify if the information in the payroll system is accurate and updated. The audit helps fix manual errors as well as check pay rates of employees against their contracts. In fact, reliable providers of payroll audit services use automated software with cutting-edge features like the data validation mechanism and anomaly detector.
  • An audit identifies non-conforming practices and pinpoint areas requiring improvement. In other words, the process ensures adherence to employment laws and policies that frequently change.
  • Auditing payroll examines if expenses recorded in the accounting books match the audit results. It compares the money listed on the balance sheets with the sum withdrawn from the bank account.
  • It specifies any inconsistency or items that have been overlooked in the remittance of taxes and guarantees prompt payments. The expert provider of payroll services provides complete analytics. This assists the company in enhancing business practices.

 

Outsourcing Solution

Outsourcing payroll audit services provides the following benefits:

  • Employers can focus on their main business activities that generate revenues. HR functions belong to the non-core category so allocating manpower, time, and resources to it is not a smart decision. Employing a third-party provider to handle payroll matters means directing efforts to essential areas like sales, marketing, and customer service.
  • Management does not have to worry about payroll lapses such as late and inaccurate of employment taxes reporting to the Internal Revenue Service (IRS). These errors can lead not only to penalties but legal sanctions. Federal and state laws frequently change without prior notice. Employers are not always able to monitor these and keep up with these developments. On the other hand, outsourcing payroll audit services to professional providers are always on top of policies, standards, and legislation. They have the qualified staff to always ensure compliance.
  • Outsourcing saves the company money in terms of purchase of computers and software, hiring full-time staff, and training these employees on payroll management and processing. Besides, third-party providers are updated on modifications of tax laws and accounting deadlines.
  • External firms that conduct payroll audit implement security protocols to protect confidential information against cyber threats. Preventing company data from being compromised is vital since online attacks can result in identity theft. Majority of payroll providers utilize cloud-based software that encrypt data and fitted with automatic scanning capability.

 

PCS Prostaff – Solutions Provider

PCS Prostaff has been in the business of providing solutions for different business organizations in California and adjacent states during the last 20 years. You can always visit our website to see our competencies and know more services that we offer. Or call us at this number – (866) 413-4103 during business hours to set an appointment.

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