Questions to Ask When Looking for a Payroll Service Provider

A payroll service provider can take over a number of functions of your accounting and human resources departments, and are a good value on many levels. Payroll is one of the more complex business tasks, partially because laws change frequently. Staying on top of current federal, state, and local laws is time consuming especially for a small business. By outsourcing payroll, you can free your business managers for other tasks.

A good payroll service can save a business precious time. Credit: by stockimages via FreeDigitalPhotos.net
A good payroll service can save a business precious time.
Credit: by stockimages via FreeDigitalPhotos.net

Here are some questions you can ask in order to be sure you cover all aspects of the search for a payroll service provider.

What services are offered, and what is included in basic payroll?

Businesses can purchase minimum payroll service products such as generating paychecks and filing tax payments and reports. However, be sure important services that you need are included. Popular payroll service providers may include generating annual W-2 forms for employees, but not 1099 forms for independent contractors.

What protections do they offer?

Mistakes are bound to happen when a payroll service processes thousands of paychecks per week. But the IRS holds the taxpayer responsible for the taxes, fees and penalties, regardless of who makes the error. So it’s good to know up front how much protection a payroll service offers for any errors or omissions.

What security system is in place?

In this day and age of computer hacking, it’s important to be clear on a payroll service’s attitude toward Internet security. Almost everyone has payroll entered electronically these days, so it’s a safe bet the payroll service you’re interviewing does as well.

How do they ensure the safety of your employees’ data as well as the sensitive financial information from your company such as bank account numbers? While you may not understand the nuts and bolts of their system, you will get a sense as to their commitment to the customer in this important area.

How are checks delivered, and is there a charge?

It may seem obvious that checks are delivered by courier if you come from a large city like New York, but that may not be the case in smaller towns. If so, be sure the delivery method gets the checks to you in time for payday, and without surprise delivery charges.

Just keeping up on the Tax Code is reason enough to use a payroll service. Credit: by renjith krishnan via FreeDigitalPhotos.net
Just keeping up on the Tax Code is reason enough to use a payroll service.
Credit: by renjith krishnan via FreeDigitalPhotos.net

How is customer service handled?

In a process as complex as payroll, you need to be able to correct mistakes, resolve employee issues, and make changes quickly and easily. Larger payroll service providers will assign an account executive who knows you and your particular concerns. Personal experience with your account will ensure quick resolution of issues and solutions that are perfect for your needs.

If the payroll service doesn’t have a particular person assigned to your customer service needs, how is it handled? If service is via a website, is it available 24/7, and are there additional charges for communicating with a real human?

How do you stay up to speed on employment tax law changes?

While reading online circulars from the IRS and state and local employment agencies may be enough for simple changes, companies that pride themselves on quality go a step further to stay abreast of the field. Do they attend seminars and trainings? If so, how often are they updated and from whom?

Take these questions into the interview meeting with a payroll service as it’s easy to leave something vital out of the discussion.  And when dealing with financial matters that impact your valued employees, you don’t want to have any surprises down the road.

 

Sarah Boisvert is a business writer who has extensive experience in marketing, public relations, and sales. She also covers topics in manufacturing such as 3D Printing and digital fabrication.

Leave a Reply

Your email address will not be published. Required fields are marked *