Payroll Tax Complexities Put Businesses at Risk

DALLAS, TEXAS - 3/6/00 - Businesses large and small are often at risk when making a seemingly-routine payment: payroll taxes.

"Payroll taxes are governed by thousands of complex, ever-changing regulations," says Fran Bartlett, president of Federal Liaison Services, Inc. (FLS), a leading employer compliance firm. "Behind the regulations are 7,000 different federal, state and local taxing agencies that require an endless stream of deposits, returns and reports."

More than complex, payroll tax compliance can be costly. Federal penalties for late or incomplete payments can be as high as 10% of payroll taxes. "And with changing regulations, the chance of error increases," Bartlett says. "But automating compliance has never been easier." She recommends several strategies for managing complexity and cost:

• Keep your options open. Payroll tax compliance is evolving as rapidly as the technology that drives it. "Payroll managers want flexibility, to shift as needed to the compliance method that works best for them: stand-alone software, an outsourcing vendor, or an application service provider on the Internet," Bartlett says.
• Think speed, savings, security. New software uses the power of the Internet to handle payroll data from any personal computer. The line between insourcing and outsourcing is disappearing. A browser gives you payroll tax data and reports on line, any time of the day or night, at low cost. The best software solutions work easily with the latest security options to protect your data.
• Use only one database. With Web-native software, there's no need to change your data. Companies can use the same database, whether the software runs at the vendor's site or yours. "You can even mix and match, maintaining part of the compliance process in-house, with the vendor handling the rest," Bartlett says.
• Hang onto your money longer. The most flexible payroll tax packages and outsourcing solutions do not impound tax funds, so companies can better manage their cash, paying tax agencies on the date due, not before. "Choose an outsourcing vendor that charges by the number of transactions processed," Bartlett says. "Vendors shouldn't be making their money by earning interest on the customer's funds. After all, it's your money."

More mid-sized businesses are turning to payroll tax software as an affordable solution to the complexities of compliance, Bartlett says. "A company with a few hundred employees can easily automate its compliance, using the same basic software that also handles $40 billion in payroll taxes for the U.S. Treasury's FEDTAX II system," she says.

Founded in 1989, FLS is the only company offering both payroll tax compliance software and outsourcing services. Companies can use the same database for either option. The Dallas company developed the U.S. Treasury's FEDTAX II System, used by more than 300 federal agencies to process $40 billion in annual payroll tax payments. FEDTAX II is the basis for FLS' new eDP.COMpliance®, the first Web-native payroll tax system available as stand-alone software, as an outsourcing service, or online, with FLS as an Application Service Provider (ASP).

About Federal Liaison Services, Inc. (FLS)

Federal Liaison Services, Inc. is the leader in employer compliance software and services. FLS automates the tasks of payroll tax payments and filings, wage garnishment processing, and W-2 and 1099 processing. Clients include more than 400 companies ranked in the Fortune 1000, as well as several major agencies of the federal government.

Visit FLS online at www.flsinc.com or call 972/239-8881; fax 972/239-9540. The company's headquarters are located at 12001 N. Central Expressway, Suite 700, Dallas, TX 75243-3715.