Hiring a payroll service is a smart move for companies that pay wages to employees, whether you own a company of one or employ thousands. When you do, not only are you outsourcing the work of running payroll, you’re also outsourcing the tax liability of maintaining compliance and filing federal, state, and local taxes on time.
Beyond tax liability, outsourcing your payroll can also give you access to payroll-related and other HR-related resources, like worker’s comp insurance and health insurance.
Unless you are a payroll expert — or have an in-house bookkeeper — it’s worth it to delegate the complications of running payroll so you can focus on the parts of the business that you do best.
At MBSATA, we work with ADP, one of the largest providers of payroll outsourcing and HR services in North America. Through our discussions with them, we’ve come to understand the answers to some common questions business owners need to ask themselves when considering hiring a payroll company.
What features will you need?
Most outsourced payroll services offer a range of payroll- and human resources-related services, so it’s important to know what you need going in. Are you a single-person company simply looking to outsource tax liability and paperwork? Do you need help administering retirement plans, insurance plans, benefits, or worker’s compensation?
Keep in mind that you may not know everything you need when you start thinking about outsourcing payroll. For example, sometimes business owners are not aware that worker’s compensation insurance is mandatory before running payroll. Many business owners initially think they just need payroll but realize they also need worker’s comp insurance and HR support as well.
If you need a range of HR services, consider going with a company that can handle everything. Having everything located with one third-party resource is much simpler than spread out between multiple providers.
How much will outsourcing payroll cost?
Like any outsourced service, the cost of outsourcing payroll will vary depending on employee count, pay frequency, and any additional services that you need. There is no one plan for every company.
Call around to payroll outsourcing companies in your area to get a range of quotes before you make your decision.
Who will be my point of contact?
Ideally, you want to have a single point of contact through the account setup and beyond. That way if you have any questions, you can speak directly to your personal representative who knows you best. A strong contact is crucial, as payroll is a very important element in a company’s structure.
Always use a personal contact for setup as opposed to relying on generic phone numbers found on websites. An accountant is always a better resource than a 1-800 number.
Do I need to wait until January to start working with a payroll company?
Worried about setting up a new payroll company in the middle of the year? Don’t be!
A payroll company will be able to collect year-to-date reports to take full tax liability for a client brought on board mid-year. That way employees receive only one W-2 instead of two separate, and the accounting process is seamless.
How will outsourcing payroll integrate with my current accounting technology?
Most modern payroll outsourcing companies will have integrations with core accounting platforms like QuickBooks and Xero. Additionally, companies like ADP offer a single sign-in login for your accountant to access all of your accounts,reports and other information. This integration cuts out any unnecessary steps in order to save time that you can re-allocate towards your business.
Ready to learn more about how outsourcing your payroll is part of a complete accounting system? Get in touch with the experts at MBSATA to learn more.