Tips to choose the right payroll service provider for your business
- Know what you want:
There are a lot of options out there, so before you start shopping around, decide how much of the payroll process you actually want to hand over. Do you just need software or an online program that will help you do your payroll yourself, or do you want a payroll processing company to do all the work for you? Do you just want payroll taken care of, or do you also want a service that will take care of your taxes?
- Do your homework:
Many payroll processing companies have very helpful websites that provide information on the different services they offer. Some even have video overviews, demonstrations, or areas that will allow you to run a sample payroll. Take advantage of these resources. Compare different companies, and if you still have questions, call or e-mail them. - Make sure you know what you’re paying for, and that you’re getting what you pay for:
Find out exactly what features and services come with the plan you buy. For example, will checks be delivered to you, or are you responsible for printing or writing them out yourself? Also, don’t just assume that a payroll processing company will take care of your taxes for you. And if they do, don’t just assume that means they take care of all taxes, including federal, state, and local taxes. Also take note that while some services provide things like direct deposit and tax preparation for free, others charge extra.
- Check your files and records periodically:
Even if the payroll processing company you choose says it will take care of your taxes and promises to cover any penalties, review your records every once in a while to make sure everything is being taken care of as planned. The IRS website stresses that “The employer is ultimately responsible for the deposit and payment of federal tax liabilities. Even though the third-party is making the deposits, the employer is the responsible party.” It’s also a good idea to make sure your employees are being paid correctly and on time. - Buyer Beware:
Some payroll processing companies that offer to do your taxes for you impound your taxes, which means they hold that money as long as possible and make interest off of it until they have to hand it over to the IRS. Find out if your payroll processing company does this, and if so, make sure it doesn’t negatively impact you or your business in any way. - Make sure it works for you:
No matter what company you choose or how large or small they are, do they work for you? Can you quickly and easily submit data, review information, obtain your employees’ checks, etc.? If you need help, are you comfortable with the customer service? Will this company ultimately save you time and money?