June 19, 2013. Dennis Beard spoke at EnterpriseWorks' EIR Workshop. The topic was issues of payroll.

1. EIR
WORKSHOP
6.19.13
PAYROLL AND
PAYROLL ACCOUNTING
DENNIS BEARD

2.  Offers Professional Advisory Services in:
 Business strategy
 Capital formation
 Transitional executive leadership
 Organization development
 Specializes in high technology enterprises
 Manages Serra Capital I, LP – Investment
Fund with 24 companies in portfolio
WHO IS SERRA VENTURES?
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3. I. Payroll Basics
II. Calculations
III. Complicating Factors
IV. Payments
V. Reporting
VI. Penalties and Interest
VII. Solutions
VIII.In-House Payroll Process
IX. Popular Software Solutions
X. Outside Payroll Service
XI. Popular Outside Payroll Services
XII. CPA/Accounting Firms
AGENDA
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4.  Gross Pay
 Various amounts withheld to get to net pay
 Other payments – Employer paid
PAYROLL - BASICS
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5. CALCULATIONS
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Weekly Totals Basis for Calculation
Hours 38
Rate 22.50$
Gross Pay 855.00$
Less: "Pre-tax" withholdings
Health Insurance 40.00 Depends on Plan
401K Retirement 42.75 Employee election
Net of Pre-tax withholdings 772.25
Less:
Federal Income Tax Withheld 154.45 Based on Table
Social Security Tax 47.88 6.20%
Medicare Tax 11.20 1.45%
Illinois Income Tax Withheld 38.61 5%
Total Withheld 252.14
Net Pay 602.86$
Employer Liabilities:
Social Security Tax 47.88 6.20%
Medicare Tax 11.20 1.45%
Illinois Unemployment 34.20 experience rated
Federal Unemployement 6.84 0.80%
Employer portion of Health 100.00 Depends on Plan
Employer match of 401K 42.75 Depends on Plan
Total Employer Liabilities 242.87$

6.  Gross Pay
 Less
 Federal Income Tax Withheld
 Social Security
 Medicare
 State Income Tax Withheld
 Employee payments for benefits
1. Health Insurance
2. 401k/retirement
CALCULATIONS
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7.  Employer matching and other costs
 Social Security
 Medicare
 State Unemployment
 Federal Unemployment
CALCULATIONS, CONTINUED
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8.  Salary vs. Hourly
 Overtime
 Multi-state presence
COMPLICATING FACTORS
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9.  Federal
 Illinois Department of Revenue
 Illinois Department of Employment Security
 Benefits
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PAYMENTS

10.  Federal – 940/941
 Illinois – IL940, IDES
 Other states
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REPORTING

11.  Late payment
 Late filing/failure to file
 Personal liability of officers and directors
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PENALTIES AND INTEREST

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“If you are using your payroll taxes due as
working capital, you are probably out of
business and you don’t know it yet.”
 Late payment of your payroll tax liabilities will be some of the most
expensive money you can use.

13.  In-house Processing
 Outside Payroll Services
 Accounting Firms
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SOLUTIONS

14.  Software + in-house expertise
 Offers flexibility, privacy, may be cost
effective
 Part of your existing accounting package
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IN-HOUSE PAYROLL PROCESS

15.  Quickbooks – various versions from $100 to
$600
 Peachtree – around $250 to $250 per year
 AccountEdge – about $300
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POPULAR SOFTWARE
SOLUTIONS

16.  Mostly limited to data input
 Not much, if any expertise needed
 Can be cost effective vs. in-house
 Can handle complications such as multi- state
effectively
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OUTSIDE PAYROLL SERVICE

17.  Intuit Online Payroll
 ONPAY
 Paychex
 SurePayroll
 ProPayroll
 ADP
 Bank of America
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POPULAR OUTSIDE
PAYROLL SERVICES

18.  Similar to process of Outside Payroll Service
 Little knowledge of payroll needed
 Can be cost effective depending on complexity and
services used
 May be somewhat more flexible than the outside
services
 Often provides best customer service
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CPA/ACCOUNTING FIRMS

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QUESTIONS?

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CONTACT INFORMATION
DENNIS BEARD
217.819.5202
dennis@serraventures.co
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