We are honored to have a guest blog post from Payroll Ace, Lisa Galletti, with some great tips on how to choose a payroll service. Don’t worry if you select a payroll company that does not have an integration to QuickBooks or QuickBooks Online you can use out Transaction Pro Importer to import the payroll data into QuickBooks. Read the Payroll Ace’s tips below.
What comes to mind when you think of payroll? Do you instantly feel frustrated and overwhelmed by the monotony and complexity of it? Payroll is pretty invisible to most employees UNTIL they don’t get paid or their pay is incorrect, then it becomes very visible very quickly!
If you’re tired of laboring your way through payroll by hand, it might be time to pass the tedious task off to an automated online service. Switching to a cloud-based payroll solution can reduce costs, minimize mistakes and free you up to focus on growing your business.
Some questions to consider when choosing a payroll provider
1. What’s the pricing structure?
The majority of online payroll providers charge a base monthly subscription fee. On top of the monthly fee, you can also expect to pay a per employee fee, either by payroll or by month. Transparent pricing is important, especially to small businesses with a tight cash flow. Ask to have the pricing structure fully explained up front, including any supplemental or “extra” fees for adding new employees, utilizing direct deposit or running additional payrolls beyond the scheduled payroll runs. Also, you might want to inquire about the likelihood of future pricing changes. As an example, one provider gives an “introductory” price of $XX for the first twelve months and then the monthly charge nearly doubles after that introductory period.
Keep in mind that cheaper is not always better in the complex world of payroll. You often get exactly what you pay for, which may be software and technical support but NOT an advisor whose expertise is in managing all aspects of payroll. BIG difference!
2. What specific payroll services do you provide?
In order to have a better idea of “fit” with your business you need to identify your specific payroll requirements and search for a vendor that delivers everything YOU need. Estimate the number of full and part time employees you have and will be hiring. Decide if you want the provider to take care of various state and federal tax obligations and determine what level of service you can afford. Define your specific needs and confirm that the service fits your requirements. Be certain that it will serve your employees’ needs as well.
Make sure you’re clear about your objectives and avoid being talked into unnecessary services. Most payroll providers do more than just calculate taxes and write paychecks. They may handle 401(k) plan deductions, health care insurance and dependent care accounts. Others can go a step further and offer integrated HR services, workers compensation and PTO/absence tracking. Ask about fees associated with these additional services and weigh out the cost vs. benefit to your business and your employees.
3. What about customer support?
You should expect live, real-person support via email, phone and chat The client dashboard should include a help center with access to detailed online FAQs and tutorials. Make sure to ask WHEN support is available. Is it 24/7 or limited to specific days and hours? Is there a time zone difference? Is support available on holidays? Better to find this out before you need that assistance at 5:30 pm on a Friday just before a major holiday!
However, if you’re calling for support on a regular basis that may indicate the product isn’t doing its job. Check out reviews of the various payroll providers, they will often give you first-hand accounts of how “issues” are handled.
4. How secure is your service?
Payroll information is sensitive and private. You’ll want to verify that vendors keep that data safe using the highest encryption standards available. Most leverage the same security technology that online banking services use. All of your account information, including passwords, social security numbers and personally identifiable information should also be protected by firewalls and two-factor authentication. Additionally, it should be backed up to multiple secure locations throughout the day, every day, to ensure your information is available no matter what. Be sure to choose a provider with a stellar track record of security.
5. Can they integrate with your existing accounting software?
Most payroll companies can easily work with most accounting programs though some may not. It’s best to ask how your software will work with their system. This makes for a seamless transition and for your continued ability to access payroll data quickly.
6. Can employees access their payroll information?
Many payroll companies allow for and encourage access for employees. They usually give employees and contractors personal portals where they can access their pay stubs and other relevant information as well as making edits to their own personal employee information like a change in contact information or updating a W4. Find out if this information is available (and for how long) to all of your current and former employees especially if you eventually switch to a different provider.
7. How do they handle payroll taxes?
Having a payroll provider take care of any tax withholdings and filings for your business can be a lifesaver. Full service providers should handle your payroll tax compliance needs accurately and on time. Those should include federal and state income and unemployment tax and state unemployment insurance. Be sure to ask if there are additional charges or fees for filing in multiple states and for local or other types of taxes specific to your area or industry.
The vendor should also process your year-end W-2s for employees and 1099 forms for contractors. Another good question to ask is who will be responsible if an error does occur especially with the filing and payment of payroll taxes.
Outsourcing your payroll to an online provider can save you time, alleviate stress and free you up to focus on more strategic activities like acquiring new customers and planning for the future of your business. Payroll is definitely not a one-size-fits-all service and there are many facets to consider before making your final pick. Be thorough in your investigation of providers, take your time and find the right fit for your business. Your employees will thank you!
Lisa Galletti is the Payroll Ace/owner of LMG Payroll Services. She lives with her husband and son in rural northern California. After two decades as a payroll specialist she still loves “all things payroll” and feels it’s the most important part of accounting! In her spare-time she is also chief pony wrangler for her small herd of miniature show horses which she competes with at driving shows throughout the year. She can be reached at firstname.lastname@example.org