What to look for when choosing a payroll provider

Payroll is critical to your business, so selecting the right payroll provider for your needs is no easy decision. The payroll process involves several complex moving parts, including computing hours, deductions and paying taxes, submitting payroll tax forms, and collecting funds for retirement and insurance, to name a few. 

Many small businesses rely on antiquated payroll solutions to organize and track data.Payroll for small businesses is also often manually managed across several spreadsheets before being combined to calculate payroll. This method leaves room for errors and is not the best use of your valuable time. 

Investing in a payroll provider that offers multiple features that are easily integrated into your current system increases efficiency and accuracy. This helps to ensure that your payroll process is streamlined and that you are paying your workforce appropriately. 

The right payroll software should give you peace of mind, meet tax and labor law compliance, and provide greater control over company finances.

So, how do you determine which payroll service best fits the unique needs of your small business? Let’s take a look at everything you need to know in order to choose a payroll provider. 

What is a small business payroll provider?

A payroll provider essentially takes the guesswork out of calculating payroll. Payroll service providers should typically handle everything from scheduling, time tracking, team communication, deposits and withdrawals, to new-hires and payroll reporting. They should also handle tax filings and distribute 1099s and W-2s as part of their payroll services. An effective payroll service provider automates, streamlines and reduces errors, giving your team more time to focus on more pressing matters.

Benefits of payroll services for small businesses

An online payroll service uses software to automate processes and offers solutions for common payroll challenges. The benefits of using a payroll provider include:

  • Regulatory compliance
  • Fewer payroll errors
  • Flexibility with integrations
  • Reduced labor costs
  • Valuable business insights from time-tracking and attendance data
  • Automatic updates for changes in pay, overtime, and employee bonuses
  • Benefit fund deductions and disbursements
  • Employee access to payroll, schedule, and retirement plan data

Effective software solutions easily integrate with other business tools, like point-of-sale systems and human resources platforms. Integration across multiple departments enhances transparency and enhances job performance.

9 things you should look for in a payroll service provider

Not all service providers are created equal. Some offer a few services where others offer many. As a small business owner, time is money, and being sure that a reliable, full-service payroll provider is taking care of your payroll process, will give you peace of mind. 

When choosing your payroll provider, think about which service encompasses all of your organization’s unique business needs. Considering the following payroll features will help you find the right platform for your organization. 

1. Integrations

Select a provider that can seamlessly integrate with the business systems you already have in place. Some payroll tools simply aren’t designed to integrate and adapt. Consider whether you need the flexibility and adaptability of a fully-integrating payroll system. 

Tip: Homebase payroll connects with our scheduling and time tracking tools. This means we do the hard work for you when it comes time to run payroll, saving you time and stress. 

This type of payroll software also ensures that you and your team always have access to up-to-date and accurate information and saves time on redundant manual data entry. 

2. Full-service tax filings

Your payroll provider should be an expert on federal, state, and local tax compliance, and handle all filings and disbursements. This ensures everything is on time and that you remain compliant with all regulations. 

3. Capability to handle varying payment and deduction types

Every small business structures its payroll differently. Some employees collect hourly wages, while others are salaried. Your payroll provider should be able to handle all types of pay structures.

They should also be able to process bonuses, commissions, expense reimbursements, and deductions. 80% of the U.S. workforce has their paychecks directly deposited. Make sure your payroll service can process both checks and direct deposits.

4. Scalability

As your company grows, your business needs will change. Partner with a payroll provider that is flexible and can grow with you, offering human resources and benefit functionalities.

5. Simplified employee onboarding

The employee onboarding and termination process can be tedious and time-consuming. Partner with a payroll provider and HR company whose software simplifies and streamlines this process. Data should automatically sync with your other business tools, saving time and reducing errors.

6. Employee self-service

Your employees should have access to important payroll information. From time tracking to earnings and W-2s, employees should be able to access this data with the click of a button.

7. Security

Your team members are trusting you with very sensitive personal information. A security breach could compromise their financial stability and have lasting repercussions.

It is critical that you partner with a payroll provider that considers security a top priority. Ask about the security measures they have in place and confirm that they follow globally recognized best practices.

8. Customer service

Inevitably, questions will come up along the way. Partner with an organization that offers both initial and ongoing support. Ask these questions to help determine the level of support the payroll service provides:

  • Will I have a dedicated support manager or team?
  • What certifications do support personnel have?
  • Can the support team answer complex questions regarding compliance or employee benefits?
  • How can I reach them? (telephone, email, or chat)
  • What hours are they available?
  • What is the average response time for a customer service request?

9. Transparent pricing

Avoid costly surprises by asking detailed questions about what their plans include. Many companies promise full service plans, yet fail to mention their hidden fees or required contracts. Partner with a company that offers full transparency. They should be able to help you determine your costs both now, and as your organization grows.

Your small business payroll provider should be able to adapt to your unique business needs, both now and in the future. If you find yourself trying to adapt to their capabilities, they are not the company for you. Homebase payroll offers intuitive, user-friendly tools and unmatched customer support. Partner with us today to start taking advantage of the many benefits Homebase has to offer.

Payroll provider FAQs

What is a payroll provider?

A payroll  provider is a company and software system that automates and streamlines your payroll process for you. Payroll service providers should typically handle everything from scheduling, time tracking, team communication, deposits and withdrawals, to new-hires and payroll reporting. They should also handle tax filings and distribute 1099s and W-2s as part of their payroll services. 

What is the payroll process?

The payroll process involves everything from gathering the data and employee information necessary for running payroll to paying employees via direct deposit or check. This includes computing employee hours, calculating deductions & taxes, submitting payroll tax forms, and collecting funds for retirement and insurance. 

Are there different types of payroll services?

Yes. There are full-service payroll providers that offer a broad spectrum of services and features like HR, point of sale integrations, scheduling, time tracking, tax filing, customer service and more. There are also payroll providers that offer a limited selection of services. 

Can a new payroll software integrate with my current system? 

Yes. Integration with current payroll systems is an important feature of any payroll system. Some payroll systems can not only integrate with old or current systems but also automate some of your processes to streamline your payroll. This saves you and your business time and money.

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