Transaction reporting for contributions in brokerage accounts

I'm used to contribution deposits reflecting the type of contribution (ie 401k vs employer)

This one cpa is depositing the sum of 401k and safe harbor into the plan's brokerage accounts with the sole label of "payroll deduction" (as I learned when questioning the 402g limit excess).

I'm curious how serious that is?

What is most important are what the employer payroll and accounting records show are deferrals and employer contributions, and what the employee's tax records (including W-2, K-1, ...) show.  That will be the documentation support the proper source of the deposit.  Mislabeling the deposit in the brokerage is poor records management and a potential source of confusion, but by itself should not be fatal.

It is possible for a single brokerage account to hold salary deferrals and employer contributions as long as there is a separate accounting maintained between the contribution sources.  The separate accounting could be done by a TPA and does not have to be done by the brokerage house.

From the time 401(k) came into existence, if any contribution sources were co-mingled with salary deferrals and not accounted for separately, then everything in that account was subject to the 401(k) rules (including vesting, in-service withdrawals, ...)

Encourage the client to practice good hygiene and make separate deposits into the brokerage accounts for each contribution source to create a clear audit trail.  If you need to provide a sub-accounting by within the brokerage account by source, be sure to charge an appropriate fee for the extra effort.

I do one of two things, I put the plan into the recordkeeping system, create a "managed account" investment and track the sources in the system.  Manual entry of contributions and time-weight the contributions for the earnings allocation.  Or I create an excel spreadsheet to manually maintain the sources and prorate the earnings.  I generally use excel if it is a solo plan.  I am not as precise as a recordkeeping system allocating gain / loss when I use excel.  I advise the broker / client that a second brokerage account must be set-up when Roth contributions are involved.  I do want those segregated into their own brokerage account.  Next year when catch-up contributions must be Roth for many owners with W-2 compensation, there may be a lot of new brokerage accounts opening.  I do charge additional for brokerage account reconciliation.

I agree with the previous posters.  However, I think that if the plan is allowing Roth deferrals, those should not be commingled in the same brokerage account as the pre-tax deferrals and employer contributions.  This is going to cause issues in the future when distributions are processed and the brokerage house has to produce 1099-Rs.  There is a very good likelihood that the tax reporting will be  incorrect.  At least if all the Roth money is kept in a separate account, there might be a better chance of the tax reporting on the Roth being correct. 

You could request a deposit correction?