In Growth Mode? Consider These Things Before Choosing an ACH Processor

By Brandon Orr, Regional Manager

In today’s world of payroll, choosing the right ACH processor can be a time consuming and tedious task. If your company is in growth mode, here are 3 questions to ask your sales representative before making a decision:

1.      Do you have dollar volume limitations? - Many banks and third party ACH processors have certain guidelines in place to help mitigate risk. One of the most common stipulations a bank or other third party processors will impose is a daily dollar volume limitation. Whereby, the Service Bureau has a cap on the dollars that can be processed on a daily basis. As you are in growth mode, whether by acquisition or traditional sales, the dollar volume you will process as a result of bringing on new business will increase as well - resulting in hitting a daily threshold.

2.     How well do you know my industry? - Many payroll service bureaus seek out ACH processors who are the least expensive. From time to time you will need assistance or have questions regarding the processing of your transactions. As the processing of ACH transactions is a vital part of the services a payroll company provides, you should have a partner that has experts on board that can answer any and all questions you may have. To avoid being transferred from department to department, ask up front, how well do you know the payroll industry? Do you have a department or team of people that are solely dedicated to assisting your ACH clients when there is an issue or question?

3.      Are you bonded and insured? - We can all agree that the payroll industry is an extremely competitive market. Not only must service bureaus strive to maintain their competitive edge in the marketplace by staying up to date with the latest technology, but they must also give end user clients a sense of security. A bond will do just that. Partnering with an ACH processor that has a crime bond should be a requirement as you complete your due diligence process. A crime bond will protect client funds in the event the third party processor creates some sort of felonious activity while the client funds are in their possession. With a crime bond, you can promote and market that you’re bonded. This will help to drive more business and place the service bureau on an even playing field amongst much larger payroll companies. Keep in mind that ACH transactions processed by banking institutions are not insured through the FDIC.

      What other questions would you add to this list?

IRS/Tax Agency Communication

Communicating with the Internal Service Revenue (IRS) seems impossible, given the fact that they are responsible for tax collection from all individuals and businesses in the United States.  When it comes to communicating with the IRS, it is important that you go through the proper channels to receive the most relevant information possible.

Businesses that outsource their payroll tax processing to a full-service provider, don’t have to worry because their payroll tax processor holds Power of Attorney (POA) and can deal directly with the IRS on their behalf.  However, businesses with a more flexible payroll service or those who process their payroll taxes in-house hold the responsibility to communicate with the IRS should an error occur with their taxes.

Here are a few tips to make communicating with IRS a more painless task:

• Have your Information Ready. Make sure you have all of the pertinent information (POA, Inquiry notice, FEIN) before you contact the IRS, they will make you call back if you can't locate the information, which no one wants. 
• Don't Delay. When it comes to handling matters with the IRS, respond quickly.  The sooner you address an inquiry the less you will have to pay in penalties and interest.
• Clear your Calendar. Since the IRS deals with all US businesses and citizens it can take up to or over an hour to reach the appropriate party.  Having a stress ball handy may not be a bad idea…
• The Later the Better. PTM Compliance Specialist, Vivian Leidelmeijer, one of PTM’s main correspondents with the IRS, shared an insight she has learned over her years of communicating with the IRS.  She stated that if you call the IRS later in the afternoon, there is generally a shorter waiting time and the employees are more eager to help you quickly.  This may be due to the fact that they want to get home by the end of the day, but either way, it’s effective!

If you have any further questions regarding IRS communication, year-end taxes, etc., Cachet and PTM would be happy to answer any questions.  Post questions on Facebook or Twitter, or email us at info@cachetbanq.com.  There are limitless ways to have your questions answered, and Cachet Banq, Inc. and Payroll Tax Management are here to help!