Payroll can be time-consuming, complex, and costly for businesses. Business owners must select the right payroll service provider to ensure accurate, timely, and compliant processing of employee paychecks.
Look for a provider that offers customer support options like email, phone, and live chat. Some also offer self-service software that allows employees to access their data, like completing I-9 forms or updating their contact information.
Ease of Use
In addition to processing payroll and filing tax returns, a good payroll service provider should offer additional features. For example, a PSP should integrate with your accounting software, time and attendance system, workers’ compensation program, and other programs requiring payroll data. This eliminates the need to transfer data between systems manually and reduces errors. Many providers also offer employee self-service, allowing employees to update their withholdings, review pay stubs and change personal data without needing a manager or HR representative.
In addition, a payroll service provider can help ensure that deductions/withholdings are accurate, overtime payments are calculated correctly, and compliance with state and federal regulations is met. This frees human resources to focus on other issues and foster business growth. However, it’s important to remember that you retain legal culpability for compliance errors and should be aware of this when evaluating potential PSPs. Ask prospective providers for customer references that you can contact to gain direct feedback about their services and responsiveness. Choosing a PSP that offers a scalable package that can grow with your business as it grows is also a good idea.
Reporting
While most business software categories have some reporting functionality, payroll software platforms can provide deeper insight. Look for reports that detail company spending versus budget, employee tax summaries, worker’s compensation, and paid time off calculations. These reports help managers and accounting teams make informed decisions, which may result in cost savings.
Payroll service providers also can integrate their programs with your existing systems, such as accounting and human resources. These integrations save valuable time as data can automatically be transferred between programs, reducing errors.
Ask your prospective payroll provider how they ensure their services are error-free and how they handle quarterly and year-end tax filings. Additionally, a good provider will take care of the distribution of employee W2s and contractor 1099s. Finally, find out how quickly and easily you can contact customer support if you have any questions. Ask about their support model and whether they’re available via phone, email, or chat.
Security
Security is one of the most important issues facing payroll departments. Protecting employee information, avoiding regulatory infractions, and upholding your company’s reputation is critical.
A reputable PSP will have robust security measures like cloud security and backup servers. They will also make it easy for you to set view permissions, so you can limit who has access to sensitive data. They will also use data encryption to protect the integrity of your payroll data.
It would help if you also looked for a reputable PSP that offers cybersecurity training for employees. They will teach your staff about best practices for securing payroll data and identifying phishing and other social engineering attacks. This will help to reduce the number of people who could fall prey to a breach and make it more difficult for hackers to steal information. Also, it will ensure that your employees can recognize and report any suspicious activity to the proper authorities.
Compliance
When it comes to payroll, compliance is key. Correct or timely filings can result in fines and penalties. Choosing a provider that can handle the regulatory requirements of your industry is essential to avoid mishaps.
Look for a service with top-tier security measures to protect your payroll data from potential breaches. This includes encryption, password restrictions, and backup stations.
Also, consider how secure your employees’ logins are. Look for providers that limit access to employee data by requiring passwords of a minimum length, upper and lowercase letters, digits, and symbols. Plus, all passwords should be updated regularly to ensure the safety of your employees’ personal information.
Finally, a quality payroll service should keep up with changes in tax regulations and laws to stay compliant. Look for a provider that offers automated payroll tax calculations and tax deductions and can provide detailed reporting to help you stay compliant with state and federal regulations. It’s also helpful to choose a service that offers remote time and attendance tracking software to record employee time from anywhere, including on the job site or in a truck or equipment trailer.
Flexibility
Payroll services can range from bare-bones paycheck products to full-blown employee benefits programs. The options can feel overwhelming, but choosing a provider that meets your company’s needs is essential.
A good payroll service will handle your details, including calculating wages, preparing tax statements, and filing year-end taxes. It will also keep your business compliant with employment laws, ensuring that your employees are paid accurately and on time.
Many PSPs offer direct deposit or check services for their clients, and they will coordinate with financial institutions to facilitate the process. They can even print and mail physical checks if needed.
Compensation management goes beyond basic payroll processing and includes worker’s comp, bonuses, and adjustments for changes in minimum wage or cost of living. PSPs can help you manage these features and give your employees peace of mind. Most also provide a self-service portal where employees can access their data and update their withholdings without going through HR or managers. This important feature can save your employees a lot of time and hassle.
