4 Things to Consider When Choosing a Payroll Service Provider
Tuesday September 22nd, 2015
Bookkeeping can be one of the most tedious tasks of running a business. Payroll taxes are ranked as a top financial and administrative burden for business owners according to the 2014 National Small Business Association tax survey.
Outsourcing payroll will help to alleviate some of your burdens as a business owner and leave you with some more time to focus on other aspects of your business. Rhonda Abrams, president of the business service site The Planning Shop, says, “One of my rules is if you have one employee, get a payroll service. The penalties for screwing up are so much more expensive than the cost of payroll.”
Payroll processing includes making tax payments, wage adjustments, paying bonuses, salaries, and commissions, along with a number of potential deductions. Making mistakes with these numbers can be very costly in terms of both finances and time.
The IRS estimates that 40% of small businesses pay an average penalty of $845 for filing payroll taxes late or incorrectly. A good payroll service will take care of all of the tax regulations so that you do not have to worry about any dreaded penalties.
When your small business has a good payroll service, much of the bookkeeping responsibilities will be lifted. However, as much as a payroll service does take care of, your company is still responsible for sensitive information that is immensely important. For this reason, it is critical that you pick the right service for your business.
Below are four things to consider when searching for a payroll service provider.
When working with sensitive information, security needs to be one of your main concerns.
A good payroll service provider ought to have the ability to offer easy access to your payroll data without compromising essential security. Important payroll data ought to be available on secured servers and have a physical backup station in case of an emergency.
Be sure that the payroll service providers that you are considering guarantee the security of their services. You can be confident in a provider that grants limited authorization to employee data, protects network access points with redundant firewalls and enforces high-strength passwords.
SSAE 16 Type II Compliance
Look for payroll service providers that are compliant with the SSAE 16 attestation standard.
You can be confident that providers that have been issued an SSAE 16 Type II report have a professional standard, are secure and legitimate. This compliance means that the provider has undergone a rigorous auditing process and validates their payroll data protection as well as underscores their dedication to continuous security improvement.
Business owners also have to consider the managerial responsibilities associated with benefits administration and human resources.
The responsibilities can pose a challenge for business owners when trying to integrate the business’ essential functions with payroll in order to avoid violating any legal regulations.
Look for a payroll service that will provide your business with expert advice and solutions, from hiring new employees to filing unemployment claims.
Your employees are your business’ largest expense and biggest asset. Make sure that the providers that you are considering offer workforce solutions that help you manage your employees.
Workforce solution package
When looking at a payroll service provider’s workforce solution package, make sure it includes:
- Live HR support services
- Unemployment claims management
- Workers’ compensation insurance
- Time and Labor Management solutions
- Retirement planning options
3. Payroll Taxes
Taxes are a reality of life. The payroll service provider that you choose ought to be able to process the typical state and federal level tax deductions and filings.
Be sure to ask any providers that are based outside of your business’ state if they have the capability to handle the different regulations for taxes in your area. Also be sure to mention to the provider if you have any employees that are working out of state.
Consider the payroll services’ tax processing management. Be sure that you will be able to view deductions in a customized report. Know what actions they take if mistakes are made. Knowing these small details will help you in deciding whether the provider you are looking at is capable of properly handling your taxes.
Customer service is an important thing to consider when looking for a payroll service provider. Little is more frustrating than dealing with poor customer service when you have questions or an issue that needs to be resolved.
Find out what support is provided and what steps are taken in resolving issues and answering questions.
Ask whether your business will be matched with a specific payroll specialist that you will continually be working with or if you will be working with a different person each time. It is up to you which service type you would prefer, but by knowing the answer, you will be able to decide whether a provider is a good fit for your business or not.
Keep in mind that if you will be working with a different specialist each time, you will always need to keep your account information available.
A good payroll service should provide:
- Live, real-person support via email, phone and chat
- Detailed online FAQs
- Detailed online tutorials
- 24/7 customer service
Some other items you will want to consider when choosing a payroll service provider are:
- Pricing - Be sure that you are aware of all the pricing details so that you aren’t surprised by hidden fees. Don’t be afraid of asking about discounts, some providers will offer preferred pricing for customers that ask.
- Ratings - Check out any reviews on the providers that you are considering so that you can get an idea of other customers’ experiences.
- Scalability - Choose a provider that will be able to effectively manage growth and expansion.
There are many different payroll service providers available. Be sure that you consider the before-mentioned considerations when looking for a provider. Knowing these details about a provider will help you make a wise, well-informed decision that can help ease the burden of your business.