 In this presentation we will discuss employer responsibilities and processes related to payroll. One of the things that the employer will need to do and will need to do whether they are a corporation or a partnership or even a sole proprietor is to get an employer identification number from the IRS that done with the form SS4. So this is going to be a just a reporting type of document that we will need to have we'll need to use this employer identification number when we process our tax documentation and of course any type of a regulation body is going to know us from a number and in terms of processing payroll for the federal payroll we need to have a separate number that being the employer identification number now this number is going to be important because it's it's it's more standardized in terms of just employment meaning any type of organization can get the an EIN number even if we're a sole proprietor a partnership the or a corporation so the corporation as we know is a separate legal entity and it's going to have its own its own corporate number when reporting income taxes but the the formats of a of a company such as a partnership typically have different types of reporting requirements in terms of the number when reporting income taxes and a sole proprietor possibly could be in a situation where they're using a social security number so we have a different type of format for reporting and a number basis to the IRS for income taxes so the the employer identification number can be used then to give the IRS more of a standardized process when we're talking about payroll no matter the type of entity that we will be using the employer identification number can also be useful for sole proprietors if they want to process 1099 type forms and not have to use their social security number in certain types of documentation as well so even if we don't have any employees in essence if we're a sole proprietor we're kind of our own employee in some ways and we may want to have some other number representing our business other than social security number and that could be these the employer identification number the process for for applying for the SS for fairly straightforward you can do it online an online application as well or go to irs.gov irs.gov and if you go to forms and go to the SS for you'll find the application form and you can just go through the steps for the application form it's a one-page form pretty quick form to fill out and get going notice some of the key components will be the type of entity here where we have the sole proprietor the partnership the corporation so we have all the all the different types of entities that we can have here applying for employer identification number using the same form that's part of the purpose here and then we've got also the the reason for applying if it is it a new business or did we have new hires possibly that are that are taking place meaning we're starting to have employees and therefore need an employer identification number once we have that then we're going to report that on our federal forms that being the 940 the 941 payroll processes could change and differ when we're talking about large companies and small companies obviously the larger company is the more complexities we have the more legislative requirements we typically have we oftentimes have to meet more legal requirements and we need more internal controls to safeguard ourselves as our our company grows one problem with large companies is is we obviously have more employees we have more time to track we want to have some system that can possibly be more electronic and serve as having more accountability even if we don't have the direct supervision as easily to track more people so we're going to have probably some electronic type of devices to clock in and clock out within larger companies devices that employees can can use to log in and log out those methods are going to need some type of of good security system and including security secure login so that we can make sure and safeguard against the proper logging and logging out we can safeguard against we might have some type of requirements to make sure that the person logging in is the actual individuals whether people can't log in for one individual and start start their time clocks we might have some individual identification methods we could try to limit the log ins by a location as well so make sure that it's not an online login we can try to limit the login to a specific location we might have the time clocks that have to be punched in at you know a specific location when we're talking about people in different locations we could clearly have some type of online type process as well for people to log in over the web to have the login access and report their time and then supervisors be able to collect that time over a web based system as we do that we want to make sure we run into problems with cybersecurity to make sure that all of our information is secure as we're as we're processing the payroll information we want to have more complexity in terms of the database system to limit the types of people that have access to different things to be able to separate duties between individuals who are logging in and approving time and recording time in the payroll process therefore to have that separation of duties we will typically have multiple types of divisions within payroll as the payroll department gets larger as we have different payroll we're going to have different divisions and different segmentations that you will have access to within the payroll system to allow for the separation of duty to allow to reduce the likelihood of fraud or theft now in order to deal with this type of complexity payroll will often be outsourced so payroll is becoming more and more something that many companies will specialize on companies like adp or paychecks these are just going to be a few uh type of companies that will specialize typically in just payroll and they'll provide a lot of these types of resources now there's a lot of pros and cons to outsourcing or ensourcing or doing your doing your payroll within the house or outside one of the pros of outsourcing to a third party like adp or paychecks is that they specialize in payroll and therefore they have the knowledge needed in order to process payroll and typically have hopefully the ability to keep up to date with new laws and regulations as well as dealing with places in different parts of the company country different parts of the world some things we need to be careful of of course is that because we have adp and paychecks processing we still need to put it into our accounting records in some way or another and so what that could differ the way we do that could differ depending on what we want to set up how we how we're going to set this thing up so in some way or another the outside individual is going to have to get that information input we're going to have to integrate that into our system so that our financial statements represent and reflect what has been recorded by payroll and paychecks the other problem of course is that it is bringing in an outside source that we are becoming dependent on we're dependent on payroll and paychecks in order to process a key component rather than having the full control over that processing in house good job