In a recent Coffee Chat in the Accountant’s Coffee House, we discussed whether or not it was important to ensure that our vendors and service providers have the proper controls in place.
The resounding opinion was YES, it is important!
We talk a lot about the importance of controls related to our clients and even within our own firms, but almost never discuss the controls in place at the vendors we rely on to provide products and services.
Let’s talk about payroll service providers…
Many of us rely on an outside service to prepare our paychecks, pay payroll taxes, and file returns. This relationship creates some pretty significant areas of concern:
- Are paychecks calculated accurately?
- Are the correct tax rates being used?
- Are taxes being paid on time and to the proper jurisdiction?
- Are returns filed accurately and on time?
- How is sensitive data handled and transferred?
Have you ever stopped to ask whether or not your payroll provider has controls in place to ensure that these things are handled properly? If you answered YES, way to go! Many organizations just assume controls are in place because of the nature of the business they are dealing with. In other words, because Gusto is a large payroll service provider people assume they must have all of the proper controls in place. Well, you know what happens when you assume?
What about QBO?
Did you ever wonder or think to ask how Intuit stores QBO data? What backup procedures do they have in place to ensure that your data isn’t lost? What if they get hacked? So many questions we should be asking, but probably assume everything will be OK because Intuit is such a large company.
Let me tell you, auditors care greatly about this topic. Just browse AU Section 324 Service Organizations and see for yourself.
It’s time we all become a little more vigilant in vetting the organizations we do business with.
To Your Success,
P.S. If you would like to dig deeper into this topic you have a few options:
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