Selecting the Right Payroll Vendor
Congratulations! You've decided to outsource payroll services for your business to a third party vendor. Typically, that means your business has grown to a point where it has become too time consuming to handle payroll in house. Outsourcing to an outside provider will not only make it easier for your employees to get paid, it will also simplify tax filings and other related matters for you and your business. And it can potentially save you money.
But first, you have to choose a payroll provider that's right for your business. Here are some factors you should consider as you make the choice.
- How do you submit payroll information to the provider? In this Internet age, most payroll vendors allow you to submit payroll information through a secure online link. If a provider's process is much more complicated than that, you may want to consider selecting another.
- How will the company handle payroll tax filings on your behalf? The payroll provider should be responsible for making sure tax deposits get to the right place in a timely manner. They should also file necessary forms with the Internal Revenue Service when they are due.
- What does payroll processing cost? While cost is important, don't necessarily choose the least expensive vendor. Because that vendor might not provide a service your business really needs.
- How easy is it for you and your accountant to access payroll information when you need to? Make sure your vendor allows you to access information when it's necessary and to run the reports you need to manage your business properly. Your accountant should also have access to similar information, including the payroll information he or she needs to file corporate tax returns annually.
- What is the provider's track record for accuracy? It's critical to select a vendor with a proven track record of accuracy in processing payroll. Your contract with the vendor should spell out who is responsible if something goes wrong. The vendor should also provide you with references – preferably in the same or a similar business – so you can make sure the vendor will be able to provide the level of service your company needs.
- Can you trust the payroll provider with your employee's payroll and personal information? You will be sharing an employee's most personal information, including Social Security numbers, with your payroll vendor. Make sure the vendor is trustworthy and takes steps to protect this information.
- What kind of customer support and training does the vendor provide? You and your in-house employees need to be trained to use the new system and have someone they can reach quickly when a problem occurs.
- What services does the vendor provide in addition to making sure employees get their paychecks as scheduled? Make sure the vendor can provide the services your company needs such as tax filings and payment, and making sure other monies, such as benefit plan contributions, get to the right place in a timely manner. Even if you don't need all of these services now, you may need them in the future as your business grows.
- Is payroll service available globally? More and more companies today have employees located outside the United States. If your company is one of them, make certain your payroll vendor will be able to pay ALL of your employees.
Choosing the payroll processer that meets your company's needs requires a clear understanding of what your company needs are, both today and in the years ahead. But if you select the right vendor, payroll processing should become more reliable, less expensive and all around easier for your business. That should be the objective any time you choose an outside vendor.