Posted in Payroll | by: Erin Colbert

5 Things to Help Your Business Choose a Payroll Provider

Many owners discover all too soon that the reality of running a business isn’t always what they imagined when they were chasing their dreams of business ownership. This is because so many aspects of “running a business” can be outside of their comfort zone. Managing your payroll is one such example.

Unless you’re passionate about payroll and have extensive experience with payroll tax laws, running payroll can be stressful, intimidating, and time-consuming. Add to this the fact that those inexperienced with payroll processing could be placing their businesses at risk for penalties and fines from the IRS, you can understand why payroll is often one of the first business operations practice to get outsourced.

How involved do you want to be in your company’s payroll?

Before you start looking for a payroll provider, you have to decide how involved you want to be in the process. Do you want to outsource the entire payroll process to an accountant, CPA, or bookkeeper, or do you want to input the data personally and run your own payroll? Both options are available with most payroll providers, so understanding what you want and how involved you want to be will help you get started in your search for the best payroll plan for your business.

You can break this into 3 primary relationships:

  1. Completely outsourced payroll: Working with a CPA or bookkeeper, your service provider manages all aspects of running your payroll, from data entry of hours worked, to calculating taxes withheld and processing the payroll, to ensuring compliance and filing tax forms with the state and local governments.
  2. Hybrid outsourced payroll: In this scenario, as a business owner you take on some of the responsibilities of running payroll like logging into payroll software to report hours worked, while your bookkeeper runs payroll, and your CPA ensures tax compliance.
  3. In-house payroll: In this case, you are responsible for all aspects of payroll and tax compliance. Business owners who run payroll themselves either use payroll software or manually calculate withholdings (typically using spreadsheets). While you will still need to consult a CPA to ensure overall business tax compliance, they aren’t directly involved with each payroll.


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What to look for in a payroll provider

Of course, like any other type of business partnership, choosing a payroll provider needs to be taken seriously as not all providers are the same. The following represent some important considerations to keep in mind when choosing a payroll provider for your small business.

1. Convenience

Running payroll should not be a hassle. It should be a smooth process that’s easy to do and one that can be accomplished on any computer or mobile device. You shouldn’t be confined to your office or required to phone in hours manually every time you want to run payroll. Having the ability and the technology to be able to run payroll from anywhere in minutes is something that business owners need to make a priority when choosing a provider.

2. Set Up

Changing from a paper-based payroll system over to a more advanced paperless system should not require an extensive learning curve or heavy-handed, time-consuming training sessions. The transition should be seamless, quick, and easy. The software should be simple, straightforward, and well, delightful to use.

3. Cost

For many small business owners, the payroll provider they choose is often based on one thing – cost. But, when they get their monthly invoice, the amount owed can be significantly more than what they expected to pay. Unfortunately, hidden fees are common in this industry, but luckily not all providers “follow the norm.” A payroll provider’s services and pricing structure should be completely transparent so you know exactly what your invoice is going to be based on how many employees you have and the services you select.

4. Service Options

Some payroll providers only offer certain payroll services, but full-service providers offer a whole host of services designed to make your job easier. These services include running payroll and payroll reports, direct deposit availability, reporting and filing employment-related taxes, making automated tax payments, handling employee reimbursements, vacation and sick day tracking and reporting, and more.

5. Partners & Integration

You want to stay away from payroll providers who are unwilling to partner and integrate with other HR and accounting software systems. When a payroll provider’s system is easily integrated with other types of accounting software platforms, you are afforded greater flexibility, more control, and better results. Similarly, it is also important for the payroll provider to partner with workers’ comp and benefits providers that understand small business needs in order to provide the most complete payroll package possible.

You can get it all (and more)!

We’re passionate about providing small businesses with an alternative to spreadsheets and conventional, expensive, and manual payroll providers like ADP and Paychex. Your business is modern and innovative, so shouldn’t your payroll system be the same? Sign up and get your first month of payroll free. Or, contact us and we’d be happy to introduce you to a modern service provider who can help you out.