Payroll services often handle taxes, deductions and garnishments for employers. Some also offer features like employee portals, POS integration and detailed payroll reports for business leaders.
Look for a payroll service provider that automatically files federal, state and local tax documents. This reduces risk and insulates your company from costly penalties.
Security
A good payroll service provider takes security seriously. Because their clients have so much sensitive employee data in their hands, they go the extra mile to protect against cyberattacks and data breaches.
Ask a potential provider about their security protocols and if they have any additional features like audit trails. Also, look for a mobile app that lets employees view and access their paychecks from any device.
Payroll providers such as ADP do much more than process and distribute employee paychecks. They help you make accurate deductions/withholdings, handle remittances, tax deposits, filings, garnishments, and compliance management. They can even integrate with other financial and data systems you already use.
Automation
Many services provide automated verification that ensures correct wage calculations, payroll deductions, and tax payments. They also notify employers about changes in employment and tax laws that might impact their business.
Look for a provider with PTO management built into the system to handle employee vacation days, sick days and other leave. They should also offer a flexible time and attendance tracking system that allows employees to clock in from any internet-enabled device. And they should have job costing capabilities that will enable departmental, division and location tracking of labor to aid in billing, invoicing, and internal reporting.
Finally, ensure the service has the reporting tools you need, like a breakdown of employee overtime to help you adjust work schedules and a CFO-friendly labor cost report. They should also store all data in the cloud to keep access to reports easy and fast.
Integrations
Often, the data from payroll systems must flow into other programs like time-tracking software and accounting systems. A good payroll service allows these programs to work seamlessly together, avoiding tedious double-entry.
Many leading payroll providers offer a range of full-service offerings that include tax deposits and filings, employee self-service, HR services, and even workforce management software. Make sure the company you choose has experience serving clients in your industry and understands the unique complexities of your business.
If your company frequently needs to contact the payroll service for help, look for a support system that provides dedicated points of contact with 24/7/365 availability. Also, determine whether the provider offers a money-back guarantee for downtime or errors. You want to avoid getting stuck with a broken process that stunts your team’s growth and hurts your organization’s culture.
Reporting
In addition to payroll processing, a full-service payroll provider should also be able to help you meet local, state, and federal tax compliance requirements. This includes filing taxes, handling deposits and withdrawals, withholding and wage garnishment, and new hire reporting.
Look for a payroll service provider that provides reporting, such as labor costs broken down by department, location and job code. It should be able to import data into your business intelligence software or existing accounting programs so you can analyze the data and make informed decisions about your company’s financial health.
Many payroll providers charge a monthly fee and require a yearly contract, so ask about pricing options and fees. Also, consider whether they have additional services, like worker’s compensation insurance and HR consulting.
Self-Service
Besides helping you meet your tax obligations and keep employees happy, the best payroll companies offer features such as direct deposit, online time tracking systems and reporting. Many providers also handle overtime payments, benefits administration, garnishments and PTO management.
Look for a payroll system that is easy to use and includes a mobile app. It is also important to determine whether the provider has a customer service team and how often they’re available.
Ideally, your chosen company will allow you to add services as your business grows. This will save you from paying for services you don’t need and give you the flexibility to make payroll changes without affecting your bottom line. This way, you can focus on running your business instead of worrying about compliance.
Tax Support
A good payroll service provider will have a dedicated team to help you with all your tax questions. Ask if they provide:
- Local tax payments (which can be complicated and confusing).
- Filing of quarterly and year-end forms.
- Distribution of W2s and 1099s for contractors.
Many small businesses turn to a payroll processing solution provider to take over the time-consuming tasks of running payroll, such as calculating deductions/withholdings, tracking overtime, filing tax deposits and returns, and distributing paychecks. The right provider will automate these functions, freeing human resources to focus on important business needs that foster employee growth and company success. By contrast, a broken payroll process will trap administrative staff in a cycle of time-wasting tasks and stunt the productivity of employees.
Analytics
While payroll is often seen as a back-office function, it should be front and center in the most forward-thinking businesses. The right provider can offer advanced functionality for process automation and employee self-service, as well as support the strategic growth of your business.
Ask potential providers what analytics they can provide, especially if your business needs to meet specific compliance obligations (like deducting Social Security and filing tax payments). Understanding the difference between out-of-the-box reports and customizable datasets is also important.
Finally, look for a payroll service that can integrate with your other systems. This will save you a lot of time and prevent double-entry errors. A strong integration component can significantly impact the efficiency of your payroll process.