Choosing the right payroll provider can help elevate your business operations.
By understanding your needs, researching providers, and asking the right questions, you can find a payroll service that simplifies your processes, and saves you time and money.
This guide helps answer the questions how to pick a payroll service and what to look for in a payroll company. The guide also offers information and tips on how to choose a payroll provider and how to choose payroll software.
Read on for what you need to know about how to find a payroll provider.
What Is a Payroll Provider?
A payroll provider helps small business owners and household employers process payroll, reducing their administrative burden and freeing them to focus on other important issues.
Some payroll providers may also offer additional functions like:
- Managing health insurance
- Administering retirement plans
- Handling workers' compensation, and
- Providing access to HR support.
Some providers even offer employee self-service portals, which can enhance transparency and further reduce administrative tasks.
Learn more about the best payroll solutions for you.
Signs You Need a Payroll Service
It may be time to consider a third-party payroll service if you’re spending more time toiling over timesheets and calculations than strategizing ways to grow your business.
If you recognize your business in one or more of the following, it may be time to switch from DIY to a payroll service.
- Payroll Calculation Errors. Mistakes can lead to overpayments, underpayments, and inaccurate tax withholdings, contributing to dissatisfied employees, business reputation issues, potential legal concerns, and costly financial penalties.
- Delayed or Late Payment Distribution. Employees expect paychecks to arrive on time and accurately represent wages earned. Payroll errors could impact employee satisfaction.
- Diverting Time from the Core Business. Time spent on payroll management takes time away from activities that improve customer satisfaction, drive competitive differentiation and help grow your business.
- Financial Reporting. Payroll errors can complicate financial reporting, potentially impacting your ability to make informed business decisions.
- Expertise Concerns. Payroll involves complex calculations. Outsourcing payroll helps reduce the burden on you and your internal team.
Key Features to Look for in a Payroll Service
But what is the best payroll service for small businesses?
It depends.
The right payroll service is the one that best meets your needs.
Whether using in-house employees or delegating payroll processing to a third-party / outside company, consider the following features when choosing a payroll system:
- Automate payroll processingyear-end, withholdings, and wage garnishment.
- File state, local, and federal taxes.
- Prepare year-end reportsswitch, including W-2 and 1099 documents.
- Document and report new hires.
- Generate reports for company use.
- Automate deductions for 401(k) contributions or insurance premiums.
- Provide online access to employee records and payroll documents.
- Create and print checks for manual signature or electronic signature release.
- Facilitate direct deposit and payroll deductions.
- Integrate with accounting software like QuickBooks, Xero and more.
- Cloud-based access and mobile accessibility.
How to Choose a Payroll Provider
Finding the right payroll provider involves matching your business needs with the options offered by a payroll services provider. Read on for a step-by-step guide.
Step 1: In-House or Outsource?
- Do you plan to run payroll on your own, or use a third-party provider?
Step 2: Business Needs.
- Do you need help with payroll and tax filings, or are you also looking for a service that also offers employee benefits management?
- What is the size of your workforce and complexity of your payroll processes?
- Does your industry require specific support?
- What are your near- and long-term growth potential? Will the platform scale with my business?
- Do you need assistance with multi-state payroll?
- Is their platform secure?
Step 3: Platform Functionality.
- Is the platform easy to use?
- Does the provider offer onboarding assistance, and a variety of customer support options?
- Is intuitive navigation, responsive design, and ease of access to essential features important to you?
- What customization options does the platform offer?
- What cybersecurity protocols does the provider offer? Will my data be safe?
- Can I integrate the payroll system with my existing tools and resources?
- Can the payroll platform assist with important tasks like:
- Reporting new hires to state employment security and child support departments?
- Provide access to the government's E-Verify system for employment authorization?
- Monitoring state and local minimum wage changes?
- Adhering to health insurance requirements?
- Staying up to date on new compliance requirements and regulatory changes?
Step 4: Onboarding.
- How easy does the provider make it to get started?
- Does the provider offer a team dedicated to getting my account set up and helping me run my first payroll?
- Will the provider offer an overview of the payroll process, including how they help you comply with payroll taxes and regulations?
Step 5: Consider Budget.
- Know what you can afford or what you’re willing to pay.
- Request quotes from multiple providers and compare the services they offer.
- Assess setup fees, monthly charges, and additional costs for extra services.
- Be sure to consider the value of the services provided.
- While cost is an important factor, it's essential to balance it with the value provided.
Step 6: Research Providers.
- Check online resources such as review sites, forums, and industry publications to gather information about potential providers.
- Reach out to fellow business owners and industry peers for recommendations.
- Ask if the provider has experience in your industry and with a similarly sized business.
- Compare service offerings across providers, assessing how they align against your business needs.
Step 7: Explore Contract Terms.
Be sure to understand contract terms, including any hidden fees and the cancellation policy.
Mistakes to Avoid When Choosing Payroll Software
Choosing the wrong payroll provider can lead to costly mistakes. Avoid these common pitfalls:
- Ignoring Integration. Make sure the payroll software integrates with your existing systems to streamline operations, real-time data synchronization, reduce manual data entry, and prevent data silos.
- Missing the Fine Print. Thoroughly read the service agreement—the details matter.
- Focusing Solely on Price. Prioritize value over cost. While cost is an important factor, it’s important to balance cost with quality. A slightly higher investment in a reliable provider can lead to better outcomes and long-term savings.
- Failing to Factor the Value of Service. Response time is critical when dealing with payroll issues. Look for a provider known for prompt responses. Also check if the provider offers support through multiple channels, including phone, live chat, automated chat, self-help resources and more.
- Missing the Big Picture. Evaluate the overall value of the services provided. A provider offering more comprehensive solutions may offer better value than a cheaper alternative.
Conclusion: How SurePayroll Can Help
Outsourcing payroll can lead to significant time savings and reduce the risk of errors that could result in costly penalties. Handing over payroll tasks to experts can help free up a small business owner to focus on business growth.
Switching payroll to a third-party provider can also contribute to employee satisfaction by helping ensure accurate and timely payments.
Plus, choosing the right payroll service allows for better scalability as your business grows.
By understanding your needs, researching providers, and asking the right questions, you can find the right payroll service for your business.
Trusted by small businesses and households for more than 25 years, you can count on SurePayroll® By Paychex to provide you with simple, no-nonsense payroll—with no long-term commitment. The easy-to-use SurePayroll platform helps you accurately pay your employees and file your taxes on time, every time.
Learn more today.
