Switching payroll providers requires careful consideration. Here’s what to look for in a new partner:
**Key Considerations:**
* Service
* Technology
* Professionalism
* Cost
* Location
**Service:** Can the provider meet your specific needs? Don’t rely solely on their claims. Request references from businesses similar to yours in size and industry. Smaller providers might not be a perfect match, but focus on *how* they deliver service. Contact the references provided and ask *them* for further references. This can reveal valuable insights. Remember that no provider can satisfy everyone all the time.
**Technology:** Is the provider using current payroll technology? Large providers often struggle to rapidly update systems due to their size. Very small providers might lack the resources for the latest tech. Aim for leading-edge, not bleeding-edge, solutions. Consider paperless payroll, online access, payroll debit cards, and employee self-service portals. Also, consider technology specific to your particular industry.
**Professionalism:** How long has the company been operating? Avoid fly-by-night operations that might mishandle your tax deposits. Look for established companies with a good reputation. Do they process EFTPS (Electronic Federal Tax Payment System) payments for a large number of clients, demonstrating experience and reliability?
Does the provider have qualified payroll professionals and CPAs on staff? Dealing with the IRS is often unavoidable. A CPA on staff can handle IRS issues efficiently. Without one, you’ll either handle it yourself or pay your CPA, who may lack specialized payroll tax knowledge, potentially increasing costs.
**Cost:** How important is cost compared to other factors? If all other aspects are equal, cost becomes the deciding factor. However, the cheapest option can be costly if it involves outdated technology, frequent errors, dissatisfied employees, and expensive CPA fees to correct IRS issues. Consider the total cost, not just the initial price.
**Location:** Location used to be a key factor due to check and report deliveries, phone calls, and banking relationships. Today, with email, electronic transfers and cloud solutions, location is largely irrelevant. Paperless payroll eliminates location concerns entirely.
Consider these factors carefully when selecting a new payroll provider to ensure a smooth and efficient payroll process.