Important features of payroll services
Each payroll service has it's own particular set of services and expertise, but here are some of the common features that you should be aware of as you're considering how to find the right payroll service for your business:
Software vs. Online- payroll services can either be provided as a software program that's installed on your computer or as an online application available on the Internet web site. Each has its advantages and it typically comes down to a personal preference. Online payroll is easy and convenient because it can be accessed from anywhere at any time and there are no payroll software programs to download or computer problems to worry about. In addition, you can provide access to other people such as your accountant. Finally, if you support is needed, you can get support on your actual account since the customer support rep can view the exact same information you do. If you choose to use a payroll software program on your computer, all of the information is saved, then released to the payroll service for processing.
Tax Filing Assistance- many payroll services are designed to calculate the proper tax deductions (as well as other deductions such as retirement programs, sick and vacation days, holidays, and so on) and generate paychecks and nothing more. Some other payroll services also help on the back end with the planning and scheduling of certain (but not necessarily all) tax filings and payments to the proper tax authorities. Many payroll services will offer a basic package and a deluxe package to provide these functions.
Tax Filing Methods- for those payroll services that can assist with tax filings, there are two main ways that they will help you file your required taxes. The first way is via email reminders that tell you (and remind you) about upcoming deadlines that must be adhered to. The second way takes this to another level and actually schedules and processes the payments to the IRS electronically. With this option, pay close attention to where the money is prior to payment- in your account earning interest, or somewhere else.
Software Integration- if you choose to utilize a payroll service in conjunction with a small business software package, you can export the payroll information into your accounting program so that you don't have to manually enter it again.
Geographic Coverage- if you have employees in multiple states, you'll need to pay particular attention to the multi-state functionality of the payroll service you choose. Some payroll services have limitations on how they can handle multi-state situations.
Numbers of Employees- in addition to limitations on how they handle employees in multiple states, many payroll services have limitations on how many employees that can handle. Also, a lot payroll services limit the number of company locations that can be handled.
Employee Payment Methods- the main function of any payroll service is the ability to calculate and generate paychecks. Here are some of the most common paycheck options include:
- the payroll service generates a company pay stub, and your company manually writes a paper check based on the amount.
- the payroll service prints paychecks on pre-printed company check stock.
- the payroll service prints paychecks on blank company check stock.
- the payroll service electronically transfers the paycheck amount to the employee's bank account; pay stubs are delivered to employee homes.
Reporting- every payroll services offer some level of reporting. Many offer pre-defined reports and others include the ability to create customized reports. An important feature in any payroll service is the ability to download information into an Excel format so that you can further customize your reports. In addition, most businesses like to share payroll reports with their accountants; this can be done online, printed payroll reports, or via Excel.
Time and Attendance- although not typically part of the core payroll service, many payroll services offer time and attendance tracking tools. These services can differ, but typically include an electronic clock with badges and a bar code reader and the associated tracking software that feeds into the main payroll system.
Support- when considering a payroll service, make sure to find out what sort of customer support you will have access to. Search for payroll services that have extensive FAQ sections and/or help guides, have a friendly interface, and several options to contact customer service (via email, chat, or by phone, etc.). Find out what the hours of operation of their customer service and how long the response time is. Also find out if you will be getting a dedicated account rep or will be supported by a team of support personnel.
Other Features- there are many additional features that can be found in various payroll services, and they include such things as the ability to handle garnishment situations, to pay contractors in addition to employees, and so on. Some of these additional features may be worthwhile for your business, but some might be more marketing fluff than added value. As you complete your research to find the payroll service that's right for you, you'll have to weigh whether or not any additional bells and whistles are worth paying for.
