6 Criteria for Evaluating a Payroll Service
There are an array of issues to consider when choosing a payroll provider. Even though processing payroll doesn’t “add” value to the business, it can certainly create many problems if not done properly. An accurate and on time payroll are obviously the most important features but there are other key factors to consider when making this decision.
Key Factors for choosing a payroll vendor
Whether you are starting a new business that has never used a payroll service or considering a change in providers, you must consider all aspects. The first thing that you should do is create list of features that are “must haves” and “nice to haves”. If the vendor has functionality that you would have no use for, chances are you will be overpaying and the system will create user confusion. Once you evaluate and the basics have been met, look for additional features that you could implement into your current process that would save time and create more efficiency. I’ve created a list of the top 6 things to consider when partnering with a vendor.
1. Service. Make sure you understand who and how you will be serviced after you begin processing. In most cases, customer service inquires are considered urgent, so it’s important to understand how accessible the provider is in order to set proper expectations for your employees. Will your checks be processed locally or delivered via mail? Who do contact if you have a problem? Is this a call center? How quickly can you expect your calls to be answered and/or returned? What are the hours of operations? Are online inquires supported?
2. Tax Filing. One of the key reasons that companies choose to outsource is to shift liability for employer tax filing. Does the vendor file in all 50 states? How are tax inquires handled? How quickly are tax issues resolved? How are tax tables updated via the software? Is this tax software internal or the product/service of a third party?
3. Accessibility. Is the payroll tool software or web-based? If it is on the web, what is the uptime guarantee? Are you able to view gross to net totals prior to processing? Are reports available instantly after processing? If it is software based, is the tool only available on the PC that it is loaded on or can it be placed on a network server? Will upgrades to the system lock you out or will they be done behind the scenes? Will you pay fees for additional licenses?
4. Reporting. What reports are considered standard? Are you able to duplicate all the reports that you use today and then some? Can you create your own reports via a report writer or do you have to contact service if you have a special request? Are the reports delivered via the web or only in paper format? Can you export reports into Excel and PDF? Can multiple users create and run their own reports?
5. Interface Capability. Is there import and export capability to all necessary systems such as accounting and time and attendance? Who is responsible for creating the interfaces? Does the vendor charge extra for this?
6. Cost. You certainly get what you pay for but you certainly don’t want to overpay for features you don’t use. A bundled pricing model may not be the best solution simply because it is convenient. Make sure to ask for ancillary costs upfront such as new hire reporting, adding new states for taxes, W2’s ect.
With the increasing number of payroll providers, it is important to choose a partner that has a scalable
tool that can grow with your business. The decision you made to outsource was to be more efficient, so you must ensure that the vendors is flexible enough to accommodate your unique needs.
For more information, contact Centripetal Consulting Group to help in the decision making process:
Contact Us:
Amy Grimmer
agrimmer@gocentripetal.com
(214) 824-4439
