How Do I Choose the Best Business Payroll Service?

Terry Masters
Terry Masters
A payroll preparation service can print paychecks.
A payroll preparation service can print paychecks.

You can choose the best business payroll service by determining your company's needs, assessing your in-house capabilities, comparing and contrasting the features of reputable payroll services, and soliciting reviews and referrals from colleagues. Payroll processing is one of the most important operational tasks for any business, and there are various business-to-business service providers that can be hired to undertake all or a portion of the payroll processing responsibility. Selection of any outside vendor to provide such a critical business service is a function of marrying your company's specific needs with the functionality and cost associated with hiring a particular service.

Before you can select a business payroll service, you must first determine your company's needs. A small company with few employees located at one main office has less need for advanced payroll options than a company with hundreds of employees working at multiple locations. This initial assessment should determine the number of employees that will be paid, the frequency of payment, and whether you have a combination of employees and independent contractors. You also have to decide the payment options you want to offer, such as by check only, or by check and direct deposit. Make a list of functionality that would accompany your ideal payroll processing scenario so you know the difference between features your company needs and those it wants.

Next, assess your company's in-house payroll processing capabilities. If a company has a payroll coordinator on staff or an accounting department, it may be able to do most of the payroll processing itself by using payroll software. In this instance, the company may only need an outside service to process payments from the company's checking account or to handle the payment of employment taxes. The determination of the portion of the payroll processing that your company will delegate depends upon what you can and want to handle in-house.

There are hundreds of business payroll service options for a company that wants to outsource the process, and an Internet search can determine the most highly-rated payroll services for your area of operation. It is important to pick a service that operates extensively in your local area because employment tax obligations are specific to each jurisdictions. By using the annual reviews published by the business media to align your needs with the different service offerings, you can compare and contrast the features of reputable payroll services.

Payroll processing is the type of service that has to be done right every time. There is substantial legal and tax liability associated with mistakes. Before you engage any business payroll service, talk to other business owners to find out their specific experiences and recommendations. A personal testimonial tends to be a better indicator of your likely experience with the service representatives in your area than an arm's length review in a magazine that might normalize the experience across many users.

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    • A payroll preparation service can print paychecks.
      A payroll preparation service can print paychecks.