DIY Payroll…Go Buy Some Stamps

Did you get into business to write letters and beg for forgiveness? No, not unless you’re working the customer service desk at Comcast. You got into business to provide a valuable service/product, become profitable, and provide for your employees and your family.

Payroll is one of the most important aspects of your business. Even if you’re the only person getting paid, it’s crucial that the work be done accurately and that you make those pesky tax deposits in exactly the right manner, for the right amount, at the right time. If those tax deposits aren’t handled properly, IRS puts you on their Christmas card list and off we go!

We work with many clients who began processing their own payroll, submitting their own payroll tax deposits, and things started out fine. Then one day, they forgot to make that federal tax deposit. The notices started rolling in, and one day the certified letter came with the threat to freeze the business bank accounts and seize the amount that was due. That day, the business decided they needed help. The thing is, at that point, it’s almost too late to get help. IRS is ready to come take your children and your pets. Stuff got real.

Entrepreneurs are "do-everything" people, and consequently they seek out a payroll solution so they can continue to, you know, do everything. Just like those terrible ads that attempt to sell DIY accounting services, there are equally terrible DIY payroll ads. Payroll is promised to be "easy" and "quick." It's a hollow promise, people. Payroll, in my opinion, isn't a DIY activity. I liken payroll to dentistry and electrical repair...don't try those things at home.

I have two quick examples of why you should never do your own payroll:

Several years ago, I asked one of our long-time clients if he wanted to turn over his payroll to us. He begged off, mostly to save some money. After about three months, he sent me an IRS notice. I responded at an additional charge to him, and sent him some suggestions to keep this from happening again. Three months later, we got another notice...and six months after that, we got two more. Guess what we were asked to do? You got it...he begged us to take over the payroll, and there hasn't been a notice since then.

I had to call IRS the other day for a client. I was on hold off and on for 2.5 hours and I spoke to 9 different agents. I know how irritated I was, but imagine as a business owner if you had gone through that. Would it have ruined your entire day and caused you to be completely unproductive and miss a deadline? Could you have been doing something to make your clients happy instead of talking to Doris in Philadelphia who was ready for her lunch break and really didn’t care about your tax problems? Probably.

We never say that clients aren’t smart enough to handle their payroll. If that was all they had to do, they’d do fine. But, it’s not. It’s one very important, time-intensive, deadline-driven, mess-this-up-once-and-you’re-doomed-to-a-life-of-writing-letters-to-Doris aspect of the business. Things spiral out of control when it takes you an entire day of holding on the line with IRS to argue about a tax notice and come away with no resolution. Consider allowing a major leaguer to take on this task for you, because the minor leagues won’t cut it when it comes to payroll.