Changing payroll providers can be a daunting task, but sometimes it’s a necessary step for your business. Here are five compelling reasons why you might consider making the switch:
**1. Unsatisfactory Service:** Payroll is inherently a service-oriented industry. If you consistently feel that your business isn’t receiving the attention and quality you deserve, it’s a red flag. Are promises being broken? Are issues resolved promptly and effectively? For example, if an overdraft occurs and isn’t rectified within two business days, you’re likely experiencing subpar service.
**2. Excessive Costs:** Are you overpaying for your current payroll services? Obtain quotes from other providers to benchmark your costs. While your current provider might negotiate, be wary of initial ‘discounted’ rates that gradually increase over time. Scrutinize quotes for hidden fees associated with hiring, terminations, reports, W2s, and other essential services. Ensure pricing is transparent and guaranteed for a specific period.
**3. Frequent Errors:** While occasional errors are unavoidable, a consistently high error rate is unacceptable. Errors cost you time, money, and employee morale. Your provider should prioritize fixing errors swiftly and without assigning blame. They should also proactively contact you about potentially unusual data rather than processing it blindly. Employees expect payroll to be accurate; a reliable provider understands this expectation and strives for near-perfect execution.
**4. Lack of IRS Support:** When facing IRS inquiries or notices, your payroll provider should offer expert assistance, not simply direct you to your CPA. A capable provider should possess expertise in penalty abatement and have CPAs on staff who can address IRS and state tax issues effectively. They should guide you through resolving discrepancies and negotiating with the IRS.
**5. Impersonal Service:** Are you constantly speaking with different representatives or navigating endless phone menus? Does your provider outsource support to locations where clear communication is a challenge? Being “lost in the shuffle” indicates a lack of personalized service and can significantly hinder problem resolution. You deserve direct access to knowledgeable professionals who understand your business needs.
If these issues resonate with your experience, exploring alternative payroll providers is worthwhile. Consider what to look for in a new provider and what to expect during the transition process. (See Chapters Two and Three for more information.)