What to look for in a payroll service provider

Payroll services are independent businesses that assist or assume all responsibilities of payroll, or paying employees, on behalf of another business. Not all businesses use such a service, and some businesses may prefer to do their own payroll, which is a viable option.

For businesses that choose to outsource their payroll, the question becomes: Which payroll service provider is the right choice? What should you look for in a provider? These questions may not be as difficult to answer as they seem.

Quality inspection

A payroll system for small businesses — and the payroll services they use — share some common features and benefits. Look for these qualities in a payroll services provider.

Cost

Plain and simple, payroll services need to be affordable. Your business needs, the complexity of your payroll structure and your budget are all factors when choosing a provider. Naturally, the more affordable the better, but not at the cost of quality.

Another aspect of affordability is the contract setup and payment schedule between a business and the service provider. Some providers operate on long-term contracts lasting a year or more, while other services go with more casual month-to-month agreements. Consider how these agreements coincide with the revenue cycle of your business to ensure that using the service won’t cause a financial hardship.

Reputation

A good reputation can be a sign of good results, and it isn’t just about the peace of mind knowing a provider will follow through. Look at reviews or talk with business colleagues in your industry to gain a better understanding of what payroll providers are available, and compare their reputations and customer experiences.

Businesses are unique, and their financial situations reflect that, including challenges related to payroll. Working with an experienced, reputable payroll service can help ensure that any potential issues will be appropriately and efficiently addressed.

Capability

The provider must be able to meet the needs of the business, from the size to the nuances of its payroll structure. One way to ensure provider is a good fit is to ask these questions upfront:

• Do you offer multiple payment options?
• Do you offer multiple wage rates? Garnishment payments?
• Do you have features for PTO management or workers’ compensation administration?
• Do you supply detailed payroll reports? How often?

Ease

All these great qualities may not matter if the interface for administrators is not user-friendly and accessing features proves difficult. After all, part of reason of outsourcing payroll services is to relieve extra work and stress from the business. If the service isn’t easy to use, what’s the point?

You'll also want to find out whether the payroll services can be integrated into your existing business programs. Businesses with programs that track or record attendance, timesheets or accounting will want a provider whose service can sync well without causing problems.

Get curious about services

Don’t be afraid to ask questions when trying to decide on the right payroll service provider. Here are a few additional questions to consider asking when finding the right provider for you:

• What security measures do you take to protect data?
• How do you implement your services at scale?
• What forms of support do you offer clients and their employees?
• How stable is your service?
• What measures are in place for clients unable to access their service?

No shame in switching

Sometimes a business may conduct all the due diligence it can, ask the right questions, get the right answers and feel like a payroll service provider is the right fit. But over time, the partnership doesn’t work out, or the needs of the business can no longer be met.

That’s OK! Many payroll service providers operate on short-term contracts that offer businesses the opportunity to change services. Of course, there may be payroll complications during the switch, but if the end goal is a smooth, quality payroll service, then it’s worth the effort.

Whether you’re looking to switch payroll service providers or selecting your first one now, it’s important to equip yourself with the right questions to ask and know the criteria a provider should meet for your business. You can also speak with a Chase business banker to learn more about how a business bank account could help improve your payroll systems.

For informational/educational purposes only: The opinions expressed in this article may differ from those of other employees and departments of JPMorgan Chase & Co. Opinions and strategies described may not be appropriate for everyone and are not intended as specific advice/recommendation for any individual. Information has been obtained from sources believed to be reliable, but JPMorgan Chase & Co. or its affiliates and/or subsidiaries do not warrant its completeness or accuracy. You should carefully consider your needs and objectives before making any decisions and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results.

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