Accounting Standard Best Practices for Payroll WebinarPresented by Consultant, Corporate Trainer Mr. Craig M. Taggart 8.13.2015

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Instructor Profile: Craig Taggart has almost a decade of experience in the fields of mergers and acquisitions

and business financing. Mr. Taggart works strategically with his clients to achieve the highest value for their business within the capital markets. His experience with BCC Capital Partners in the M&A industry has greatly contributed to his understanding of transaction structure, strategic

placement of buyers, and the attainment of maximum market value for his clients. He has represented and sold many businesses in a number of different industries and has significant experience working with companies in: continuing education, transportation, software and professional services. Mr. Taggart is currently working in the clean energy sector that covers multiple initiatives within M&A and corporate development.

He is a certified merger and acquisition advisor, accredited valuation analyst as well as an active member of Alliance of Mergers and Acquisition, and The National Association of Certified Valuators and Analysts (NACVA). Mr. Taggart has been a certified fraud examiner since 2011 and has owned an investigative franchise business, which focused on fraud based cases involving insurance, asset searches, surveillance, witness statements

He earned his MBA from the San Diego State University specializing in financial management. Mr. Taggart graduated from the California State University Northridge with a bachelor’s degree majoring in organizational psychology.

Areas Covered in the Webinar: Payroll Compliance Considerations

Payroll Compliance Considerations The Internal Revenue Service (IRS) International Financial Reporting Standards (IFRS) The Fair Labor Standards Act (FLSA)

Withholding, Depositing and Reporting of Wages and Taxes Salaries, Wages, and Overtime Pay Payroll Taxes, Cost, and Benefits Paid by Employers Payroll Business Process Risks and Challenges

Learning Objectives: The processing of an employee’s paycheck from gross to

net must be done in a strict yet varying regulatory environment. This webinar focuses on the account standard best practices for the payroll process with valuable information that will help your company avoid compliance issues and potential fines.

Why Should You Attend: Education is power! There are not many other industries, that this

concept could not be truer. Some of the process such as determining gross pay is regulated by either the federal Department of Labor (DOL) or the state’s equivalent depending on which one favors the employee, while others such as when an employee must be paid is governed strictly on the state level. While still other processes such as determining taxable gross wages is controlled by the Internal Revenue Service (IRS). The employer is responsible for determining the correct regulation to follow for each process and ensure the proper accounting standards are in place. Reporting and depositing payroll taxes to the appropriate agency in an accurate and timely manner is vital to your company. Late or inaccurate deposits may result in penalties and interest charges. These complex payroll tax requirements may seem intimidating but by learning a few simple concepts, you will gain an understanding of the best practices accounting standards for the payment process.

Who Will Benefit: Bank and financial institution auditors Controllers and corporate managers Forensic and management accountants, accounts payable

and financial analysts Governance, risk management and compliance officers Internal and external auditors, CPAs and CAs Human Resource Executives (HR) Payroll Executives

Background The processing of an employee’s paycheck from gross to net must be

done in a strict yet varying regulatory environment. This webinar focuses on the account standard best practices for the payroll process with valuable information that will help your company avoid compliance issues and potential fines. Accounting payroll procedures help senior managers ensure that staff-compensation amounts included in financial statements are accurate and complete and conform to generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS). IFRS and U.S. GAAP require accountants to include payroll data as expense items in the statement of profit and loss. A controller must be aware of the regulations which must be followed to ensure compliance that will prevent audits resulting in penalties, fines and interest, varying because the process is controlled by several entities on both the federal and state levels.

Payroll Compliance Considerations

Many state-implemented e-filing and e-payment mandates are lowering the electronic tax deposit threshold, thereby catching smaller businesses and imposing more administrative burdens. The pitfalls for employers seeking to comply with ever-increasing state electronic tax filing and remittance mandates are further illustrated by the varying rules that apply beyond employment tax and unemployment, such as those governing child support remittances. What’s more, as electronic technologies have evolved, states have responded by developing entirely separate reporting systems and requirements. This widespread fragmentation is expected to continue for some time, making compliance an ongoing challenge for employers. In addition to cost, staffing, and infrastructure, the ability to keep up with evolving government requirements is a key consideration in determining whether to keep payroll processing and tax filing in-house. Implementation of legislative changes is equally complex, especially as states steadily add more information to existing employer reporting obligations. The process of identifying these changes and modifying systems and workflows is becoming increasingly burdensome for employers that handle payroll processing in house.

International Financial Reporting Standards (IFRS) source Wikipedia

This was designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. They are a consequence of growing international shareholding and trade and are particularly important for companies that have dealings in several countries. They are progressively replacing the many different national accounting standards. The rules to be followed by accountants to maintain books of accounts which is comparable, understandable, reliable and relevant as per the users internal or external.

IFRS, with the exception of IAS 29 Financial Reporting in Hyperinflationary Economies and IFRIC 7 Applying the Restatement Approach under IAS 29, are authorized in terms of the historical cost paradigm. IAS 29 and IFRIC 7 are authorized in terms of the units of constant purchasing power paradigm

The Fair Labor Standards Act of 1938 source Wikipedia abbreviated as FLSA; also referred to as the Wages and Hours Bill[2]) is a federal

statute of the United States. The FLSA introduced the forty-hour work week,[3][4] established a national minimum wage,[5] guaranteed "time-and-a-half" for overtime in certain jobs,[6] and prohibited most employment of minors in "oppressive child labor", a term that is defined in the statute.[7] It applies to employees engaged in interstate commerce or employed by an enterprise engaged in commerce or in the production of goods for commerce,[8] unless the employer can claim an exemption from coverage.

The FLSA was originally drafted in 1932 by Senator Hugo Black, who was later appointed to the Supreme Court in 1937. However, Black's proposal to require employers to adopt a thirty-hour workweek met stiff resistance.[9] In 1938 a revised version of Black's proposal was passed that adopted an eight-hour day and a forty-hour workweek and allowed workers to earn wage for an extra four hours of overtime as well.[9] According to the act, workers must be paid minimum wage and overtime pay must be one-and-a-half times regular pay. Children under eighteen cannot do certain dangerous jobs, and children under the age of sixteen cannot work during school hours. The FLSA affected 700,000 workers, and President Franklin Roosevelt called it the most important piece of New Deal legislation since the Social Security Act of 1935

Withholding, Depositing and Reporting of Wages and Taxes All employers are required to obtain a federal Employer Identification Number (EIN)

from the IRS. EINs serve as account numbers employers must use when making tax deposits, filing tax returns, and when contacting or dealing in any way with the IRS or the Social Security Administration (SSA). New employers must apply for an EIN no later than seven business days after the first payment of wages. See Employer Identification Numbers.

All employers that make tax deposits with the IRS are assigned a deposit schedule based on the amount of taxes being paid. Tax deposit frequencies can range from once a year to the next business day after a payday. Penalties and interest accrue on amounts deposited late or not deposited at all. See Payroll Tax Deposit Frequencies.

All federal payroll tax deposits must be made using the Electronic Federal Tax Payment System (EFTPS). Employers that do not wish to use EFTPS may make their deposits using a third party, such as a payroll provider or CPA, or through their bank. See Electronic Federal Tax Payment System.

Employers are subject to stiff penalties for failing to deposit the full amount of employment taxes due on time. Penalties may be waived for reasonable cause. See Penalties for Late Tax Deposits.

All employers that withhold federal income and employment taxes from employees' pay must file Form 941, Employer's Quarterly Federal Tax Return. The form is used to report the total amount of taxable wages paid and the total amount of federal income, and employment (Social Security and Medicare taxes) withheld in each calendar quarter. Form 941 must generally be filed by the last day of the month that follows the end of the calendar quarter.

Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund, is used to correct errors made on a previously filed Form 941. If an employer wants to make corrections or adjustments to Form 941 for three different quarters, it must file a separate Form 941-X for each quarter. The due date for filing Form 941-X depends on the quarter in which the error is discovered and whether employment taxes were underreported or overreported.

Employers must make deposits and file reports for amounts withheld during the year from nonpayroll items using Form 945, Annual Return of Withheld Federal Income Tax. These items include pensions, annuities, backup withholding, and gambling winnings.

In addition to penalties for late deposit of taxes, the IRS imposes penalties for late filing of employment tax returns, such as Forms 941 or 944, and for not paying the tax that is due with the return. Other penalties may also apply..

Form W-2, Wage and Tax Statement, is used by employers to report the amount of all compensation paid to employees and all federal, state, and local income and employment taxes withheld from employees' compensation in a calendar year. There are six different copies of Form W-2 and each must be provided to the right party by a certain due date.

Ten Global Payroll Challenges and How to Overcome Them Challenge #1. Ensuring compliance Challenge #2. Optimizing local payroll operations

Challenge #3. Getting the right balance between optimized global processes and local flexibility

Challenge #4. Getting accurate, real-time reporting Challenge #5. Keeping down technology acquisition and

maintenance costs

Challenge #6. Ensuring employee confidentiality Challenge #7. Getting the right KPIs Challenge #8. Ensuring buy-in from the C-suite Challenge #9. Prioritizing geographical transition Challenge #10. Getting the right structure: how many centers and why?

Why Businesses Need to Take Payroll Global As organizations expand their reach and operations globally, many of the

processes necessary to running a successful business become more complicated. One of those processes is payroll. Few things are more important to a business than paying employees on time, in the right amount, and in a way that complies with national, regional and local laws and regulations.

For a global organization, developing a similarly global payroll process is often a challenge. In fact, it is a challenge most companies have not yet overcome, according to a survey of 161 global companies conducted by Ernst & Young.

More than half of these companies (54%) continue to use their existing payroll model simply because that is what they have always done. A much smaller group maintains its current process because of concerns about cost (15%), a lack of confidence in available alternatives (7%), and out of concern over risk and control (6%).

Although 12% of responding companies have found a vendor able to handle their fully outsourced global payroll process, the vast majority of companies have a mix of in-house and outsourced payroll (60%) and a process that is handled completely in-house (28%). The researchers attribute this lack of a full outsourcing to a few issues in the marketplace:

a lack of confidence that payroll providers can deliver end-to-end solutions,

lack of operational footprints in all of the geographies in which the company operates, and

a too-low level of maturity in the payroll outsourcing market.

As a result of this fragmentation in payroll requirements, processes and solutions, companies with global operations use various payroll outsourcing models based on the needs of the local operations and the capabilities of available vendors. About one-third of global companies allow local employees to manage payroll and treat the subsidiary as a separate entity. Another third manage payroll on a regional basis with communication and coordination within the region rather than between locations. Among the remaining third, 19% maintain centralized control over international payroll operations with little autonomy at the local level and 16% manage their entire enterprise, including payroll, as a single global entity.

Thank you for your attendance for this comprehensive webinar covering Accounting Standard Best Practices for Payroll

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