It used to be that small business owners were forced to weigh themselves down with manual payroll processing that wasted precious time and resources. When computer software was introduced for payroll, things got a lot easier. Things got easier still when specialized payroll companies started emerging in the 1970s.
If you are using a payroll service provider, you’re not alone. There are millions of other businesses just like yours. The question is, how much do you know about your payroll company? Are you satisfied with the level of service they offer and are you confident they are doing the best job possible?
Below is a list of questions to ask your payroll provider. You can get a good idea of just how well they are doing by paying close attention to the answers.
How do you handle new employee reporting?
New employeeshave to be entered into the payroll company’s computer system and reported to federal and state taxing authorities within a set amount of time. The procedures for doing this are relatively straightforward, so there is never an excuse for employees to go unreported. Your payroll company should be able to explain the process in detail.
What is your process for reporting payroll taxes?
Payroll taxes have to be withheld from pay and reported on a set schedule. Employee deductions are made with every pay period, and the employer is expected to have enough money in the tax account to make scheduled payments. A good payroll company has this all planned out.
What security protocols do you have in place?
The benefits of online payroll should be obvious in this day and age. Still, the one downside of online payroll is security. Your payroll provider should have systems in place to guarantee the protection of all employee information at all times. It is a good idea to require your payroll company to provide you with copies of any and all security audits they conduct.
Where is your data center located?
Payroll services generally store data on remote data centers that can be located just about anywhere. You might want to know where their data center is just in case geography is important to the way you do business. In most cases, it will be irrelevant, but it may not be in your business – especially if you operate on a global scale where international rules for data storage may apply.
What kind of access do employees have to information?
In the modern era, it is expected that employees and contractors will have direct access to their own payroll information online. Ask your payroll provider if such access exists. If so, it should be available through some sort ofcentralized portal giving each employee or contractor access through a unique account.
Who provides your payroll software?
Online payroll companies can get the software they offer to clients in any number of ways. They can develop it themselves, they can purchase off-the-shelf solutions, or they can hire software development firms to create customized applications. Depending on the nature of your business, you may need a highly customizable software package to handle your payroll.
There are certainly additional questions you can ask your payroll provider to gauge how they are doing. The ones we have listed here are really just the start. At any rate, don’t just assume the company handling your payroll is doing the best job they possibly can. They may not be. The only way you can know for sure is to develop a solid working relationship that allows you to ask questions and get straightforward answers.