A payroll provider usually does a lot more than just pay employees— the list of payroll services some companies offer can go on and on. But not every business works with a provider who offers a comprehensive range of services. It can be difficult for small businesses to know if a payroll company is the right fit for them, but figuring that out is key for the future of your business.
The last thing your business needs is to have your money be handled by a firm who can’t do what you want them to with it. Every company is different, but there are still a number of critical services that most will need their payroll company to provide in order to function, including:
Produce reports — as often as you want
You can’t afford not to know where you stand as a business at any given time. While some payroll companies offer quarterly or monthly reports, it’s become the norm to be able to produce reports on demand — and you shouldn’t settle for any less. In uncertain times such as these, waiting for the quarter to end in order to know where you’re at simply won’t fly.
Just as important as report timing is report inclusion: do the reports you receive have all the information you want to know on them? Don’t be afraid to look for a provider offering custom reports; the extra knowledge could make a world of difference for your business.
Cover all tax filings
Taxes may be a certainty, but it seems like the rules on what needs to be withheld, forwarded, and refunded change every single year. Payroll service providers should be able to handle every single tax filing for you, ensuring that the proper amount is always the amount withheld.
This is particularly important if you have employees paid on different schedules or through different salary schemes. Be sure that your payroll platform can accommodate any irregularities your payouts may have and can still process taxes appropriately thereafter. No one wants to spend the days before a filing deadline hunting down cash from an employee just because their payroll services platform didn’t calculate withholdings properly.
It is a legal requirement for businesses to send their full-time employees W-2 forms within a month after the end of the previous calendar year, but most companies simply won’t have the bandwidth to compile and distribute all of that information on their own. If your payroll service provider can’t produce accurate W-2s in a timely fashion, it’s your business that will end up on the chopping block.
Ensure legal compliance
The law around employee pay and company taxes is thorny and complicated, and the penalties for breaking it can be apocalyptically severe. A good payroll service provider can’t cover all of your bases when it comes to the law, but efficient, well-documented pay stubs and on-time tax filings will help ensure you’re on the road to compliance.
While all payroll tools should be able to produce the necessary information for an audit at the push of a button, a great payroll platform will be able to tell you the moment an employee falls out of compliance. If you live in a state or territory with particularly idiosyncratic laws or rules surrounding employee pay, be sure that your payroll provider can step up to the task.
Centralize all data
If an audit does befall your business, you need to know that all of the required data is right at your fingertips need be. Every company needs a payroll platform that has all employee pay data from previous years stored centrally and securely online.
This data doesn’t just need to be stored for emergencies, either. If your payroll service provides a thorough look at company pay over a certain period of time, that data can help you analyze trends and make money-saving decisions further on down the line. Centralized data storage may be an afterthought to some, but it can make all the difference when used correctly.
Allow for all kinds of workers
Now that well over one-third of the United States’ workforce is comprised of freelance workers, businesses need to have infrastructure in place for accommodating them. Whether it’s custom payout schedules or on-time 1099 deliveries, your payroll company needs to have just as many features for dealing with freelance workers as it does with salaried employees.
The pandemic has created uncertainty in the careers of many, opening up a larger number of people to the prospect of freelance work than ever before. If your company isn’t prepared to effectively onboard, pay, and maintain a pool of freelancers, you’re already a step behind the competition.
Pay employees any way, anytime
No two employees will want their money to come exactly the same way at exactly the same time — some may be interested in weekly direct deposits while others may want a monthly check. No matter what the case is, you need to have a payroll service ready to adapt to the demands of your employees as they arise. Many older payroll providers shrink at the notion of paying employees outside of established intervals, but you should always choose the platform that allows you to put the needs of your employees first.
With high levels of employee turnover now a fact of life in most sectors, the onboarding process needs to be as efficient and cost-effective as possible in order to keep things running smoothly. The most advanced payroll providers now offer self-onboarding, a simple process wherein employees themselves enter all the required personal information and the software automates the rest. Though payroll is only a small part of onboarding, it’s a crucial one all the same — and one that your payroll provider needs to run point on.
Though your payroll needs likely extends far beyond the entries on this list, these are a few crucial processes that your provider needs to have in order to work for your business. Don’t stop there, though: by finding the right fit for your business, you’ll save yourself hours of headache down the line.
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