The reporting of tax liabilities to multiple state and federal agencies is one of the most onerous and scary requirements of having employees.
Over 25% of businesses experience a penalty for errors, late filings, or other mistakes filing employment tax, averaging over $700 each year.
(Source: IRS data book 2010)
Large companies may make deposits and file reports several times a week. That’s hundreds of filings in multiple states each year. Automating this process provides significant savings.
No matter what size the company, compliance to eFiling requirements, ever-changing forms, and meeting new guidelines legislated into existence during the year is difficult, and opens you to significant fines and penalties for non-compliance.
Moving to eFiling
Any change in the way your business operates should be made for the purpose of improving efficiencies, lowering expenses, limiting liabilities, or to keep up with changing requirements in regulations or marketplace.
Changing payroll reporting and payments to eFiling meets many, if not all, of these reasons. The simple interface and comprehensive nature of many of the forms and payments solutions available, provide efficiencies to virtually any other reporting and payment options. Automated error-checking functions eliminate virtually all rejections, as well as eliminating the liabilities associated with potential fines and penalties. One of the biggest changes in the business regulation environment is the stated goal of the IRS and SSA to make all communications and business practices to be conducted electronically.
Since many states take their lead from the federal standards, it will not be long before virtually all state and federal payments will be required to be sent electronically.
Moving to electronic payments is inevitable. The question is how to go about changing over from your current process to electronic delivery.
With over 170 state and federal taxing agencies and myriad different processes, formats, forms, and deadlines, many businesses have just thrown up their hands and outsourced reporting to payroll services and paid very significant fees to do so. In many cases they simply felt they had no choice. The threat of non-compliance is just too scary.
Other companies have hired additional staff and decided to use agency websites to process payments and reports. Again the business is faced with going to several different sites, none of which have the same process. Those businesses are faced with unique logins for each site, separate tracking methods for each site, and multiple contacts to try to resolve any issues that may occur while transcribing in payroll data or attempting to export/download multiple files for the various sites.
Find a solution that is integrated in your payroll module and does not require transcribing information, creating exported files, or transcribing to a website. The solution should provide automated payroll reports that are filled in automatically with your payroll data and can be eFiled with just a few clicks. The interface should be intuitive and simple to understand. A replica of the actual form displayed onscreen and the review process very simple. The steps required to eFile should be few and well defined.
The solution should support all of the federal and state agencies you file with and include unemployment, wage withholding, and new hire reports and payments.
There should be a single login to eFile and view all filing histories. Any filing should be time-stamped and dated to provide an audit trail.
There should be a calendar system that provides reminders for filing deadlines that could be received via email, desktop alerts, or even text messages to your cellular devices.
Compliance guarantees should be part of the service. All negotiations with state and federal agencies concerning filings should be conducted by representatives of the service. Any fines or penalties incurred because of service errors should be paid by the service.
Finally it needs to be affordable. An annual subscription that includes all of your filings for twelve months should be based on how many employees you have and should be less than outsourcing to a payroll service.