How to choose a payroll company

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By Bernadette Starzee
Dolan Media Newswires

Very few things would wreak as much havoc in your workplace as your employees failing to receive their paychecks on time.

Because your workers expect payroll to happen consistently and accurately – no matter what emergency your company, the region or the country may be facing – you must carefully select a payroll provider that will not let you and your employees down.

Because it is labor-intensive and complicated to do it in-house, many companies outsource their payroll function. As such, if you’re looking for a payroll provider, you can seek referrals from counterparts at many different companies. Get the names of several well-regarded payroll providers so you can compare services and prices.

Payroll service providers will typically charge you a certain amount per paycheck, depending on which services you receive. Beyond printing, signing, sealing, delivering and providing direct deposit of paychecks, vendors typically offer payroll tax services, including calculations, filings and payments; W-2 and other forms for workers and various management reports for employers. In addition, payroll providers may offer a wide range of human resources services, from benefits administration to employee handbooks and policy manuals.

Sit down with a few payroll service providers to ask which services they offer and what’s included in the cost. Ask how and when your company must submit data for each payroll, and request a demonstration of the system so you can see if it’s user-friendly. Can you and your employees access payroll data from multiple devices?

Because security is of the utmost importance when it comes to payroll, ask about the systems that are in place to protect your employees’ sensitive data. What backup systems does the provider have in place in case of power outages and other problems?

With regard to taxes, find out if the vendor guarantees the accuracy of its calculations and backs up the guarantee by paying any tax penalties in case of an error.

The payroll field includes a mix of large national providers and smaller regional providers. In either case, ask if there is a dedicated account manager or liaison that you can contact for all matters concerning your payroll. Be sure to meet with this individual to see if you would feel comfortable working with him or her. How accessible is the account manager, should you have a problem that requires immediate attention? Find out what kind of technical support is available, in case you have problems with the system on your end.

Look for a provider that has the expertise to meet your company’s payroll needs. Find out how long the firm has been in business, and whether it routinely services companies with payrolls that are similar to yours. For instance, restaurants should look for a provider with a well-established practice catering to the unique payroll needs of that industry. If you have employees in multiple states, find out if the payroll company has the expertise to handle multi-state tax filing. If most of the vendor’s clients are much smaller or larger than your company, it’s probably not the best fit.

Ask the payroll service provider for a few client references and call them. These clients can give you a good idea of what it’s like to work with the provider. Ask how accessible the vendor is, how often problems arise and how they are handled when they do. If the clients had to do it all over again, would they choose the same provider?