How do I check who holds the bank access and client authorizations at a payroll company?
Ask for a register of every bank connection, signing authority and client authorization the firm relies on, showing the person, the date and what it permits. Check whether each is held by the company or by an individual, and what must be signed again when ownership changes.
Money moves through a payroll firm, so access is the first thing to map. Ask for a list of every bank relationship it uses: client accounts it can instruct, its own trust or clearing accounts, and any shared online banking. Next to each, write down who can approve payments and who can only prepare them.
Then check the paperwork behind the access. Clients usually sign something that lets the firm act for them. Ask to see a sample, how they are stored and how many are out of date or missing. Some may be in the seller’s name rather than the company’s. Ask your lawyer what must be re-signed once ownership changes, and what would stop working on closing day.
Look at the controls too. Is there a second approver on larger payments? Are former employees removed quickly? Can one person both set up a payee and release a payment? Ask the firm’s bank how it handles a change of owner. A tidy register that you can test by sampling a few clients is worth much more than a verbal assurance.
Key takeaways
- Ask for a written register of access and authorizations.
- Check whether each permission is held by the company or a person.
- Sample clients to confirm their paperwork is current, signed and stored where you can find it.
- Look for a second approver on larger payments and a quick way to remove former staff.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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