What's a small business owner to do when confronted with the costs of payroll outsourcing versus the time and resources it takes to process payroll himself? Using an outside payroll company can be the right choice, as long as you keep the following guidelines in mind.
How To Choose A Payroll Company
Choosing a payroll company is similar to most other outsourcing decisions: trust, competence, and reputation will be key factors in your decision. Beyond these basics, here are a few specific things you should look for in a payroll company:
Businesses that have employees or offices across several different states should look at national providers. Bigger companies like ADP, PayChex, and Paycycle have experience serving growing and multi-state businesses.
Look for a company that offers to pay any penalties or fees that result from calculation errors or late filings. Ask specifically what the requirements are in order to get the fee paid -- remember, your business is still responsible for taxes and other payments, even if the mistake isn't your fault.
Online Access and User Interface:
The way you transmit payroll information can make all the difference in your experience. Have a sales rep take you through a sample transmission, browse around using the provider software program, and even ask for a free trial. The easier the program is to use, the better.
Will the company provide a representative dedicated to your business, or will you need to call a helpdesk representative you don't know if you have questions? Customer service can be a deal breaker when it comes to payroll services, because figuring out problems on your own can take up too much of your valuable time.
Businesses in certain industries -- restaurants, for example, where employee wage amounts are very specifically regulated from state to state -- those that are required to offer certain employee benefits, or those without the time or knowledge to process payroll themselves can all benefit tremendously from using a payroll service. Payroll firms vary in terms of cost, service offerings, and the scope of businesses they serve, but if you do your homework, using such a service can be a real help to your business.
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