When it comes to running payroll, you generally have three choices:
- Handle payroll yourself
- Invest in payroll software
- Outsource to a payroll provider
While some businesses believe option one will save them money in the long run, that’s usually untrue. Besides the extensive time it takes to run your payroll, manual payroll is also riddled with human errors (leading to billions of dollars of fines every year).
And while we’re all for organizations investing in payroll software (heck, we sell it, after all!), we also recognize that some teams would rather outsource the whole process. If you think your business is too small, that you can’t afford a payroll provider, or that you’ll lose control of payroll functions, think again. Entrepreneur explains that, when chosen correctly, a payroll provider offers a less expensive, more straightforward way of paying your employees (and filing taxes).
The Importance of Asking the Right Payroll Questions
It goes without saying that payroll is a critical aspect of any organization’s operations. It affects not just the bottom line but also employee satisfaction and compliance with laws and regulations.
When considering a payroll provider, asking the right questions is vital to ensure they can meet your organization’s unique needs. From the accuracy of payroll calculations to the integration with HR systems, every detail matters.
Asking thorough questions helps you:
- Uncover potential risks
- Evaluate the provider’s competence
- Choose a partner that aligns with your business goals
Moreover, payroll errors can have severe repercussions – at best, disgruntled employees and, at worst, hefty penalties due to non-compliance with tax laws. By asking targeted payroll questions, you can gauge a provider’s track record in handling payroll errors, their approach to problem-solving, and their commitment to accuracy. A reliable payroll provider should have robust processes to minimize errors and a clear plan for resolving issues if they occur. Understanding how a provider handles these challenges gives you peace of mind and helps protect your organization’s reputation.
Finally, every organization has unique needs, whether it’s flexible payment options, specific reporting requirements, or specialized compliance needs. Asking questions about a provider’s customization capabilities allows you to determine if they can tailor their services to fit your requirements. A provider offering scalable solutions, flexible pricing models, and responsive customer service will likely be a valuable partner as your organization grows.
21 Payroll Interview Questions
Below are 21 questions to ask as you interview different payroll providers. By exploring different vendors and asking the right questions, you can find a payroll provider that meets your current needs and supports your future objectives.
- What does your basic service model include?
- Are there options to upgrade?
- What do you offer that the competitors don’t?
- What information do I need to sign up?
- What is the setup process like, and how long will it take to run my first payroll?
- How often can I run payroll? Is there a charge for each run?
- Do you cover the penalties and interest charges with your tax filing service?
- Do you offer filing assistance for local taxes?
- Do you handle taxes if I have employees in multiple states?
- Do you handle wage garnishments if my employees have them?
- Do you offer earned wage access or on-demand pay for my employees? What is the cost?
- Can you work with my CPA/accountant?
- What security measures do you take to ensure my information is safe?
- Will I work with the same customer service rep whenever I need something?
- Do you stand behind your work?
- Can you do ad-hoc check runs? What is the cost?
- Can you provide a couple of references from other small business owners?
- What’s the average length of time that clients stay with you?
- Are there any hidden fees that need to be mentioned (ex., startup costs)?
- What does your service cost for one year?
- Do you charge if I add more employees to my payroll?
Choosing the Right Payroll Vendor
A reliable payroll provider ensures accurate and timely payments and contributes to a smooth and efficient HR process. By asking the right questions and comparing various vendors, you equip your organization with the information needed to make an informed choice. As you explore your options, remember that a strong partnership with your payroll provider can lead to long-term success and help you avoid compliance or operational challenges.
