Payroll Service Tips
According to Inc. Magazine, the Internal Revenue Service (IRS) penalizes one in three businesses for mistakes in payroll taxes. Payroll mistakes also cause problems between employers and workers. The wise business owner uses experienced payroll professionals to handle this complex, crucial, and time-consuming process. But, not every business can afford to hire a full-time payroll specialist. So, they contract with payroll service providers. These are independent businesses that handle the payroll process for a company. The employer submits employee information, hours worked, pay rates, benefit plan and other information to the payroll service to process payroll and pay taxes on a regular basis. Funds are automatically transferred from the business to the payroll service to cover employee pay, taxes, benefit costs and service fees.
Other People Are Reading
-
Provider Selection
-
Finding the right payroll service is essential. Some businesses, such as restaurants where workers receive tips, need payroll services with extensive experience in handling the pay and tax issues associated with tips. In addition, businesses with union contracts or employees in several states have more complex payroll and tax issues that require specialists in these areas.
The best way to start a search for the right service is to ask for recommendations from owners of similar businesses. Recommendations from business associates are more likely to be reliable. Business associates are also more likely to offer both the positive and negative aspects of the service. In addition, checking the Better Business Bureau and the Dun & Bradstreet ratings and grievance reports are good ways to evaluate service providers.
Services and Fees
-
Make a list of the payroll services the business will need throughout the year. Then, compare this list to the list of services offered by the provider. Frequently, payroll services bundle essential payroll services with services that might not be necessary, such as human resources services. These additional services significantly increase the cost of the service.
Payroll service fees are based on the number of employees and the services provided. But, it is essential to ask if the regular fees are charged by the month or by the pay period. Also, ask about add-on fees. Some payroll services charge extra for preparing W-2 forms, online time tracking, or direct deposits.
-
Access and Ease of Use
-
Many payroll services offer secure online web access to their systems. This allows employers to enter employee information and view pay period and year-to-date reports. These online systems allow employees to view their payroll history and accumulated benefits. The system should be easy to use and should be password-protected, as well.
Other Important Issues
-
A variety of other issues must be addressed in selecting a payroll service provider. Does the service have the capacity to support a growing business? How does the payroll system integrate with the business' accounting system? What reports will be provided and how often? Can special reports be created?
Additionally, prompt, responsive customer service is essential. Is there a dedicated experienced account representative or will service be through a call center? What is the turnaround time for processing regular, bonus and pay correction checks? Will the payroll service pay the IRS penalties that result from tax errors?
-
References
- Photo Credit money in hand image by Bruce MacQueen from Fotolia.com
