Payroll Impact on Grant Management

July 7, 2021

Proper payroll accountability and reporting is a critical component of grant management. Yet, many nonprofits do not utilize a payroll service and are subject to manual tracking and reporting. A payroll service can significantly reduce grant management administrative time for nonprofits.

What is a payroll service provider?

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A payroll service provider is a company that automatically processes payroll calculations, payroll tax statements, year-end taxes, and more. Many employers prefer to use payroll service providers to help ensure their employees and taxes are paid accurately and on time. In addition, a provider can help employers meet filing deadlines, deposit requirements and streamline business operations.

A full-service payroll provider goes beyond the basics of payroll calculations handling deposits and withdrawals, withholding and paying garnishments, and new-hire reporting. It will also file federal, state, and local taxes. In addition, most full-service payroll providers integrate time and attendance and benefits administration.

What is grant management?

Managing grants from inception to reporting requires skill, time, and experience. Once a nonprofit receives the funding, some controls must be adhered to. For example, the budget is specific for what is allowed or not allowed and managing direct and indirect costs. Payroll is a direct cost, and time must be tracked. There must be an accounting of expenditures, such as keeping receipts and tracking and submitting payroll records. Financial reports are required in conjunction with program goals.

Are payroll requirements different for nonprofits?

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Not necessarily. Nonprofits are subject to the same payroll taxes and withholdings as for-profit entities. However, if the nonprofit receives a grant or grants, the employee time dedicated to each grant must be tracked, and a payroll service can offer that solution.

What impact does payroll have on grant management?

Tracking employee time is a stringent requirement of grant management. Tracking employee time ensures accountability for up to 100% of the employee’s time. For example, if there are five grants managed by the nonprofit, employee time must be tracked to account for expenses associated with the grant. In addition, utilizing a payroll service with an online portal affords the manager or director easy reporting and compliance.

The employee would sign into the portal and track their time for Grant #1, Grant #2, etc. The sum of the employee’s time cannot exceed 100%, and there are possible legal repercussions to inaccurate or unethical payroll time ticketing and tracking.

What services can a nonprofit benefit from by using a payroll service?

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For most profits and nonprofits, payroll falls under the umbrella of human resources. Since payroll encompasses Paid Time Off (PTO) monitoring, the possibility of payroll garnishments and 401K deductions, the human resources contact in your nonprofit might likely utilize a service to ease the burden of these administrative tasks.

Suppose you do not have a human resources department or contact. In that case, payroll services such as the offering from Capital CFO will provide human resources services as part of the enhanced payroll service. However, if you need a little more than payroll services, our enhanced program covers you and your business for payroll, tax, and human resources:

  • Payroll data entry
  • Direct Deposit
  • Payroll Delivery
  • Robust Reporting
  • General Ledger Interface
  • W-2s and 1099s
  • Tax Filing
  • Employee Portal Access
  • HR Helpdesk
  • State and Federal Forms and Resources
  • Employee Handbook development
  • Job Description development
  • Bylaws (board approved)

Recruitment and hiring are essential to creating a successful nonprofit. Engaging with a single-source provider of payroll, recruitment, and human resources services ensures your agency is compliant with all federal, state, and local laws.

Is it difficult to hire a payroll service?

It is very easy to hire a payroll service. At Capital CFO, we get to know you, your nonprofit and listen to your payroll, human resources, or bookkeeping challenges. Our methods take the uncertainty out of these processes so that you can simply do what you do best. Schedule a time to talk with one of our managers and see how Capital CFO can provide you with payroll and nonprofit consulting services.

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