This is the fourth in a series looking at the five critical reports every business needs, but most businesses can’t get from their payroll service. This time we’ll talk about 401(k) reports.
While defined contribution retirement plans are highly customizable, they all have some basic information in common. Your 401(k) administrator is going to need the same basic information regardless of how your plan is configured:
- Employee name
- Social security number
- Employer match
One might think that this is the kind of reporting which can be easily standardized, but the devil is in the details. Each administrator likes to put their own twist on the reports, and that turns the idea of standardization on its head for payroll providers. Any particular administrator might have report criteria as specific as:
- Field length
- File format
The variables are just enough that your servicer made the business decision to have you, the customer, write whatever report your 401(k) administrator requires. And configure it into a format that they accept. Or pay them extra to take the time. Your pick.
On the other hand, 401(k) reports, including the ability to export into a wide variety of formats, is standard in Sage Abra software, the in-house payroll solution we recommend and customize for our clients. Of course the report will almost certainly need tweaking, but in many cases that can also be done in-house, at no added cost. With an available library of templates, it’s likely that if any customization is needed, it won’t be much. And because you’re in control, you will have access to all the fields in the database — that’s something a payroll service just can’t do, because it exposes them to open their database that much.
Some of our clients don’t wish to have anything to do with report writing, and prefer to partner with us or another Crystal specialist to customize their 401(k) reports. We’ve found that they’re still more satisfied with the control they have over the process. To be fair, we’re using Crystal, the number one reporting package for finance, not one of the code-heavy report writers most services make available; that gives us a big advantage when it comes to delivering what the customer wants. We also offer classes, so if you want to exercise that much more control over the process, you can do that.
In fact, file exports are often a bigger challenge than the other specs of the report. That’s where a Sage Abra system really stands out, because unlike your servicer’s system, your in-house payroll is based on an open database. It’s your data, you have full access to it, and you can get it out in any format you need. Excel, CSV, tab delimited, Word . . . any format that you or the receiving administrator needs.
If your payroll service limits your reports to specific formats, that is again a business decision — only by limiting your choices can they manage their own server costs. It’s understandable when you stop and imagine the variety of different requests they get from all their different clients. That’s one of the greatest powers of taking control of your payroll — you can configure the system to your specifications, instead of forcing your company into a generic model that doesn’t fit very well.
If being responsive to your receiving administrator is becoming a liability, contact us to find out how your 401(k) reporting can become an asset.