If your business has employees, your business needs payroll services. There are many payroll processing providers in the market, and though it may seem like they are all alike, they are not. So, knowing which company to hire is essential. Wait, don’t accountants run payroll? You are correct; accountants run payroll. They get the hours, bank account details, as well as the tax, benefits, legal, and other withholding data loaded into the system and then they hit the golden button that starts the payroll run. But everything in the background that causes the funds to move from your business’s bank account to your employees’ bank accounts is the work of a payroll processing provider. Who you hire to process your business’s payroll matters. Today, we will examine five significant things to consider when picking a payroll processor. These five things are not the only things a business needs to consider; however, this list is the best starting point we recommend to our clients.
Frequency of Running Payroll
As mentioned earlier, every payroll processor’s service features differ. The frequency of runs is one major difference. When shopping for a payroll processor, consider one that allows multiple monthly payroll runs. If you pick a processor that only allows one run cycle a week or every two weeks, you may get stranded when something happens, and you need to run more than 1 or 2 runs in a given week. While most processors will let you add additional run cycles, it may come at a cost.
Filing of Payroll Taxes
One headache even accountants do not like is quarterly and annual filings of Federal and State payroll taxes. The type of forms your business needs to file, the frequency of when to file, and which states you need to file with can get confusing and complicated very quickly. Missing deadlines or filing mistakes can lead to unnecessary penalties. I have clients who have decided to do the filings independently to avoid paying an “Add-on” fee that most processors charge. Two things I tell my clients are that whatever they save is not worth the headache you will give yourself, especially if you make mistakes, which is easy to do. The second thing I tell clients is that not every processor tags tax filing as an “Add-on” or “Upgrade” service. Some service providers in the market offer the same service price tag whether a business files its own taxes or the processor does it for the company. Do your research, ask your accountant, or call our office, and we will be happy to help you find a suitable processor for your business.
Customer Service
This may seem obvious, but we have seen clients jump on with a processor without asking how they handle client accounts. Look for a processor who offers a dedicated contact for your account. Having someone who, anytime you have an issue and make the call, that individual is the person who answers on the other end of the phone is a huge deal, and your accountant will thank you for it. A dedicated contact understands your account, its history, its setup, and what works or does not work for your business. Therefore, the person can save you time and get right down to how to resolve your issue. If you are torn between two processors, the quality of customer service should be highly considered.
Pricing Plans
Review, review, and review the processor’s different pricing plans. Are you paying for a service feature you need? Does it make sense to pay for the service features of a given pricing plan versus a different pricing plan? Does the “Add-ons” price make sense for the service you will get? Are there other quality processors offering the same plan features at a better price? Remember, a cheaper plan does not always mean a better deal. Conversely, an expensive plan does not always mean a higher-quality plan. Also, free starter plans are not always questionable. If you are offered a free platform that meets all your business needs, take it. Free does not immediately mean cheap or broken. Review, review, review, and compare plans.
Testing Platforms and Trial Periods
I am a stickler on testing platforms and trial periods when I subscribe to any software, not just payroll processors. If a processor is not offering a free plan, they need to provide you with a testing platform or a trial period (of at least 30 days, not 7 days). Use the testing platform and trial period to see if the processor’s product fits your business well. Get your accountant to test the product. Throw different scenarios at the product and see if it passes the test. Do not settle. Test, test, test, and test.
DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting, or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.
