5 tips on how to choose a payroll services company

Why should you outsource?

The IRS penalizes one in three business owners for payroll errors. The New Jersey Department of Revenue has a similar penalty ratio for business owners. The number 1 reason you outsource your payroll to a professional payroll processing company is to comply with the IRS and the State of New Jersey.

Even if you’re not making mistakes in your internal payroll management, you’re still wasting your most valuable asset, TIME. Time is the second reason you should outsource your payroll company. Your time equals money for your business and even if you delegate the responsibility to a member of your staff, there are a few extra things to worry about. Your time doing payroll is money lost for your business. Not only do you have to pay your salary or rate of pay, but you also have to pay employer tax, workers’ compensation, and employee benefit expenses.

At worst, you have opened yourself up to possible fraud. Internal payroll fraud is more common in small businesses because there is not a high level of security with bank accounts, access to checks, signature stamps, social security numbers, addresses and other personal information. All of this gives you my third reason, which is to have peace of mind knowing that your employees are paid and taxes are filed accurately and on time.

So how do we choose a payroll services company?

When choosing a payroll company, there are 5 things you need to know.

1. Financial Protection – Ask your payroll company to provide proof that they are insured and bonded. You want to know if your payroll company makes a mistake, that they are responsible for correcting their mistakes.

2. Backup and disaster recovery strategy: Ask your payroll company what their backup plan is if some type of disaster occurs (example: fire, flood, computer virus, and power and phone failures). Where is your information backed up and stored? How quickly can they be back up and running if a disaster strikes?

3. Customer Service: The person who handles your payroll is more important than the person who sells it to you. Ask who will handle your payroll. Remember that a salesperson’s job is to sell to you, and they are very well trained to do so! You should ask to speak to the specialist you will be working with to see if they like them and to find out their level of experience in the industry. Ask for references from clients you are currently working with. Find out if your temporary or permanent specialist? Some of the largest payroll companies are data processors and call centers. Ask yourself if that is the kind of service you want. You should feel comfortable and confident that if a problem occurs, your specialist can fix it quickly.

4. Pricing – The payroll industry has changed dramatically over the years, from letter to package pricing. Most payroll companies bundle all their services together to offer you a rate per pay period based on how many employees you have and how often they pay. There are additional charges for delivery, year-end processing, and W2 forms as well. Since the payroll industry has become very competitive, be sure to ask your salesperson if a discount applies and when it runs out.

Some of the largest national payroll providers and franchises have introductory rates, special offers and free months. Buy Beware! These specials end and the discounts disappear and annual increases occur. Remember you are being sold by a highly trained salesperson who gets paid if you handle your payroll, not if you stay. Ask them to put it in writing and by email to protect you, and if you really want to get creative, ask them to have their direct manager or boss approve the proposal as well.

5. Employee and Employer Benefits System Integration: Most payroll companies can offer additional services such as online employee access, pay-as-you-go workers compensation, 401k, HR solutions, health insurance, and payroll solutions. of time and attendance. When choosing your payroll provider, make sure you choose a company that can grow with your business.

Follow these 5 simple steps when choosing your payroll company and you will save your company time and money!