Healthcare Business Books Cleanup Pay set up, not run

What setup means here

Setup is the unglamorous half. The clinic has already chosen a company to pay people. That company holds the pay run, the deposits of withheld tax, and the wage reports. Our side is the books: wages in the right period, employer taxes in the right period, and a balance sheet that agrees to what that company says was paid. The payroll company stays the payroll company. We do not print checks. We do not file the wage report in their place.

A new hire still belongs to that company. State new-hire steps, where they exist, are that company's work or the clinic's, under the instructions for the state where the person works. We do not reprint one state's new-hire form on a page that any clinic in the country might read. What we will say is that wages recorded in the books have to match wages that company actually paid, in the same month.

Employees, and people who are not

An employee is paid through that company. A clinician or a typist paid outside it is an information-return question, and the form follows the facts, as the form page describes. Calling everyone a contractor because the software made it easy is not a setup. It is a classification the clinic would have to defend. We will not recode a workforce to make a month close faster.

Owner pay, when the clinic is a corporation that pays the owner wages, belongs in the same payroll company, at an amount the clinic can explain. We do not invent that amount on a sales call. If the books show the owner taking cash with no wage and no draw clearly named, the month stays open until the clinic says which it was.

What done looks like

A month is ready on the pay side when three things agree. The payroll company's report for the month. The wages and taxes in the books for that month. The cash that left the bank to fund them. A fourth thing, the shelf and the visits, can be perfect and the month can still be open if those three do not tie.

If you are choosing a payroll company for the first time, say so. We can talk about what the books will need from whichever company you pick. We will not pick it for you on a web page, and we will not run the first payday.

Keep going.