Handling payroll can be challenging for any type of business. The company policies change and the tax laws get frequently modified. Besides, employees also change along with their payroll distribution. One-minute error in payroll distribution can cause serious penalties to the company from the IRS. Such slip ups account for billions in fines every year, even if the errors are unintentional. It can be detrimental to the credibility and reputation of your business, especially among employees.
It is necessary to stay updated about payroll laws to ensure firm accuracy. For this reason, employers outsource their payroll management. Payroll service providers like Peter Diamond have been helping their clients with solutions like payroll management, financial statement preparation, annual tax planning, administrative services, and even IRS intervention for the last 14 years.
Outsourcing saves your valuable money, time, and not to forget the extreme stress. Your time will be spent in pursuing your core business needs without any concern about keeping yourself updated with annual regulatory changes. Keeping up with constantly changing state & federal taxes, payroll processing, and quarterly reports is a full-time task. Working with an experienced provider in this field is a great investment.
How will you find the ideal payroll partner?
- Do you want a big publicly traded firm or some local shop across the street?
- Are you fine with a traditional brick & mortar company or is it better to partner with an online firm?
This sector is evolving just like your business. As days pass, you get introduced to new options in the payroll sector. Every provider offers similar services, but the package, costs, and security differ. Management is a sensitive matter, so choosing a highly reputable and professional service provider is a necessity.
You are not aware of the working or performance of every payroll firm, but know your business and its needs.
- What are your payroll processing needs? If you are traveling a lot, then you may need an online service. You may even prefer giving information directly to the professionals.
- How much does it cost for in-house payroll management? The total amount has to include staff cost and consistent training.
- Do you need unique services? The basic payroll management services include payroll & tax calculation for every employee, management reports, check printing & delivery, and annual & quarterly tax form preparations. There are several other services available, if necessary.
Main factors that you will need to consider while hiring payroll management firm includes:
1. Experience
Has the expert been in the business for long? It indicates that the outsourcing firm is stable. There are cheat payroll services that have scammed businesses leaving them to answer the IRS and their employees.
2. Expertise
- Does the firm specialize in payroll management?
- Does it dedicate time towards payroll management or is it an optional feature besides their primary focus?
Experience in payroll management makes the professional cover all your business needs including traditional and online payroll processing, employee screening, background checks, and time & attendance solutions. It is also a great thing if the potential service provider has worked in your niche. You can gain confidence that the chosen professional is prepared to handle your industry’s unique challenges.
3. Reliability
Payroll and tax management data is sensitive, so you need to look for a credible service provider. An established firm supported with a strong history, solid reputation, and satisfied customer testimonials can be your first choice. Therefore, ask for recommendations and even read online reviews.
Finance comptrollers and controllers eagerly share their references among the business community, especially when their relationship with their outsourced payroll service provider is great.
4. Accountability
Every year many businesses experience penalties due to bookkeeping errors because they are related to tax. You need to be totally immersed in payroll management to avoid such glitches and penalties. Despite efforts errors eventually occur. The firm needs to identify who is accountable for tax penalties due to delay or non-filing of tax returns. Ask what kind of responsibility will they willingly accept in case of errors?
5. Services
As you will need to regularly communicate with the professionals, you expect personalized customer service. Ensure that the provider offers daily support and not just on payroll processing days. There are many queries besides the payroll processing days that need instant attention. You desire to partner with someone who really knows your industry and its challenges.
6. Flexibility
You need to provide information to the outsourcing team. Ask if the provider offers some flexible options like post it online, send print reports, or a data file. Sometimes you are unable to transmit the information at a scheduled time, so find out how flexible they are in such situations.
7. Security
With GDPR introduction, data security has to be the number one priority for every business. Employee and customer data protection is crucial. So ask the provider how your data gets encrypted? Who will have access to sensitive data? What type of insurance policy the service provider has? What kind of employee screening process do they follow?
A little error in managing employee data security and privacy can place your business in troubled waters due to security breach. Ensure that the potential payroll management firm has a team trained in GDPR awareness & compliance.
8. Fees
You need an affordable service. A few services are operating on a monthly basis without any long-term contract. Some need annual commitment. It will depend on how your payroll runs.
- A flat fee means you get charged every month
- Pay-per-period means you get charged every time payroll gets processed
There are multiple pricing packages for different service levels. For example, a basic plan means only payroll management. The advanced plan includes printing W-2 forms and paying taxes on behalf of the employees. The services you chose will define the price. When you compare prices, remember cheaper is not better! Therefore, choose wisely. Go with your instincts!
Thorough research and consideration of the above factors will ensure that you hire an ideal payroll management firm. You expect your payroll process to be a flawless segment, so choose one that is capable of delivering what you need!
