Floating up a lazy river sounds great. The float that comes with payroll tax payments – not so much.
Let’s talk about float
In financial terms, the float is money within the banking system that is briefly counted twice due to time gaps in registering a deposit or withdrawal. These time gaps are usually due to the delay in processing paper checks. A bank credits a customer’s account at the time of deposit. However, it takes some time to receive a check from the payer’s bank and record it. Until the check clears the account it is drawn on, the amount it is written for “exists” in two different places, appearing in the accounts of both the recipient’s and payer’s banks.
What about float and payroll taxes?
Most payroll providers, both
What is the advantage of a pre-funded payroll tax account? Some organizations appreciate not having to keep track of due dates or bother with making payments. But a disadvantage is losing control of some of their cash flow since those funds are no longer available to them. There could be a gap of days or weeks until the taxes are due – the float. And they are not earning interest on that money while it is “floating.”
Also, working with a payroll provider that requires a pre-funded payroll tax account will add extra steps and time to the process of paying payroll taxes. Additional steps mean more work.
Outsourcing your payroll to a provider makes you dependent on them to hold your funds and pay your taxes on time. What happens if they have significant errors, outages, or schedule delays?
Of course, you’d choose a reputable payroll provider, one with an excellent record regarding errors or delays. Still, while outsourcing is convenient, you relinquish control of a significant process to another company.
So, you may wonder if there is a better way to pay your payroll taxes accurately and on time. There is.
The Greenshades solution️
Greenshades is a cloud-based insourced payroll provider that has no float. That means there is no need for a pre-funded payroll tax account. We help you run a payroll and alert you when your payroll taxes are due. We don’t hold onto your funds. We understand how essential it is for you to control your cash flow. When you receive notice of an upcoming payment deadline, you can easily schedule the payment yourself, paying the government directly without a pre-funded account.
At Greenshades, we supply you with the tools and resources to run payroll effectively and efficiently. The best payroll process allows you to control your money and your schedule: no more float, no more unusable funds, and no more reliance on outsourced payroll providers. Seeing and managing your payroll taxes is the best way to prevent errors. Greenshades saves you time, resources, and money by putting the power of payroll and compliance back in your hands. ️
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We are in the business of making other businesses successful. We work to empower SMBs and their employees. We are Greenshades.
From Payroll and Benefits to HR and Tax Compliance, Greenshades has you covered. To learn more about our no-float payroll tax process, schedule a free demo.