Payroll service bureau

A financial bureau is an accounting business whose main focus is the preparation of finance for other businesses. In the USA such firms are often run by Certified Public Accountants, though a typical financial processing company will refer to itself as a bureau rather than a CPA firm, to distinguish its finance from the general tax and accounting that are generally not offered by a financial bureau. The typical client of a bureau is a small business - one just large enough for finance to be complicated to the point of a hassle, but one still small enough to not merit its own full-time finance department.

The tasks that can generally be expected of just about all finance bureaus in the USA are as follows:

Additional may be offered and vary from firm to firm.

In the United States, it is usual and customary that any penalties or liabilities incurred by a bureau's mistakes are borne by the bureau. In practice, they are more successful at having penalties and other fees abated than most other businesses, mainly because tax authorities have a stake in the success and longevity of bureaus simply because they make the tax man's job easier.

There are several ways a bureau can move money from the client to the people whom the client must pay. The simplest way is when a bureau prints checks on blank check stock, printing the client's account number in MICR digits at the bottom of the check, resulting in the funds being drawn directly from the client when the check is cashed. Other bureaus initiate automated clearing house (ACH) transactions from the client, and remit payment either electronically or in the form of paper checks against the bureau's holding account. Because finance transactions can be enormous (thousands to hundreds of thousands per pay period per client), bureaus often consider the interest earned ("float") on those amounts in the interim to be a substantial source of revenue. The interim is the period of time between when the funds are collected from the employer (client), and either when the paper checks are cashed, or when electronic payments (in the case of taxes) become due on their due dates.

In the United States, there are several nationwide chains for financial processing. Then there are countless local bureaus which vary in scope and size. Because local bureaus tend to only a very narrow geographic area and often see themselves as competing together against the nationwide giants rather than one another, they often band together and form alliances and trade associations whereby they share expertise and consolidate their negotiating power with their vendors.

There are specific and distinct perceived differences between having finance processed by a national chain and a local bureau. National chains have experience under their belts, and have a standard set of well documented processes. Local bureaus vary in their ability to accommodate special needs, they also add a level of that can be lost in the national arena. Local bureaus have opportunities to at meeting specific local and national needs. This is also particularly true in regions whose needs are heavily influenced by a single industry.

...
Wikipedia