| Outsourcing particular business tasks can enable you | | | | • Providing direct deposit |
| to free up resources and energy to focus on your | | | | • Processing W-2 forms |
| core competencies. Payroll is an important function and | | | | • Processing 401k and mutual fund plans |
| in all likelihood it makes sense to outsource payroll | | | | • Addressing tax needs for your company and |
| administration rather than hire resources in-house and | | | | providing tax preparation |
| dedicate them solely to the function. Payroll companies | | | | How to choose a Payroll Service? |
| help you organize your payroll, adhere to policies and | | | | Ask for quotes from several companies before |
| procedures, and get employees paid on time. | | | | making a final decision. An easy way to request |
| To stay on top of your tax obligations is reason | | | | quotes from multiple providers is to go to a B2B |
| enough for your company to consider using a payroll | | | | networking portal like TradeSeam. Keep the following |
| provider. Payroll administration warrants attention to | | | | in mind as you decide on the provider. |
| detail and even the smallest indiscretion can attract | | | | • Can they provide accurate payroll service without |
| heavy penalties from the tax authority of your country. | | | | any mistakes in employee’s pay or providing tax |
| In the US, the IRS has a history of levying heavy fines | | | | information to the government? Ask for history of |
| on small businesses for even the smallest | | | | efficiency. |
| transgression. Recently released statistics show that | | | | • An occasional mistake is acceptable but how |
| one out of every three small businesses is penalized in | | | | quickly can they correct it. If the payroll service |
| some way for not complying with tax laws. | | | | provider is overstretched, they may not have the |
| Why should you outsource payroll processing? | | | | resources to quickly provide the remedy. |
| If you company is large enough, you may choose to | | | | • Is the payroll providers system and software |
| conduct payroll functions in-house but be prepared to | | | | compatible with your own operating systems? Would it |
| hire at least a couple of employees dedicated to this | | | | be possible to transfer data to and from your business |
| function. You will also have to allocate resources to | | | | easily? |
| continuously train your payroll staff in use of | | | | • Are the references flawless? Excellent customer |
| accounting software and to keep up with the | | | | service to business owners and its employees is |
| frequently shifting state and federal tax laws. Also if | | | | important. |
| you are a growing company that is continuously adding | | | | • How many clients is the payroll provider serving? |
| new employees, teams and locations, managing payroll | | | | Large number of clients may indicate a successful |
| is going to be quite a challenge. Do you really want to | | | | service but attrition in the past few months may |
| get distracted from the core-functions of your | | | | indicate deteriorating quality. Does the provider have |
| business by administering payroll yourself? | | | | adequate resources to serve your business? |
| Payroll service providers are experts in what they do | | | | • Is the pricing competitive? Some companies may |
| and have economies of scale since they administer | | | | bait you with low basic fees and charge heavily for |
| payroll for many other companies. More than likely, | | | | extras. Ask for an all inclusive package to compare |
| they will deliver payroll services to your company | | | | prices. |
| cheaper and more efficiently that what you can do | | | | Once you decide on a payroll provider, scrutinize the |
| yourself. | | | | contract very carefully for any hidden fees or charges |
| What Services Do Payroll Companies Provide? | | | | that may kick in after a few months of service. |
| Payroll companies provide various services. The | | | | Check the first few pay checks very carefully for any |
| following are the most common: | | | | mistakes. It is better to uncover the issues early |
| • Calculating pay checks for each employee | | | | enough before they get compounded and more |
| • Addressing tax obligations on a local, state, and | | | | difficult to fix. |
| federal level | | | | Hiring a payroll provider is an important decision for |
| • Printing and delivering checks | | | | your business. It is tough to easily switch a payroll |
| • Providing management reports | | | | provider if you make the wrong decision. Make sure |
| • Tracking employee benefits information | | | | you adequately research all possibilities before making |
| • Automatic check signatures | | | | a final decision. |