Choosing a Payroll Service Provider

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As part of your buying decision, you should talk to at least 3 or 4 different payroll service providers to compare their offerings. Here are some of the factors to consider:

AccuracyPayroll Services Free Quotes

The provider should be able to give you guarantees of a certain accuracy rate. We recommend that you verify your entire payroll manually for the first couple of pay periods, then spot check it on an ongoing basis. Remember, that any mistakes are ultimately your responsibility, so catching them quickly is essential.

Customer service

Whatever the company’s claims of accuracy are, there will be times where you’ll need to make corrections, either for their mistakes or your own. Ask about the customer service policies, hours, and staffing levels. You may want to call their customer service number yourself and see how you’re treated.


Make sure the program or web site you’ll use to enter your payroll data is easy to use. In addition to the basic tasks of entering hours and vacation or sick time, see what it takes to add new employees, change payment information, or make other administrative updates.


Some payroll service providers may offer additional services that put them over the top. For example, you may need to connect your payroll service to an existing HR information system. Asking about integration may let you cross some providers off your list in one conversation.

In addition to these factors, don’t hesitate to judge personal qualities, as well. If the representative you speak with treats you like your business is too small to bother with, that probably means the company will treat you the same way — In other words, find someone else.

Since your payroll service provider will be taking on some of your legal responsibilities, you should be sure to check their background. Make sure they are appropriately licensed and bonded, for one thing. You can also ask if their employees are certified by the American Payroll Association, the APA. It’s not necessarily a deal-breaker if they’re not — certification is not mandatory — but it can be a good indication of the dedication and professionalism of the staff.

Lastly, it’s always worthwhile to get input from other businesses like yours. Whether they’re in your industry, your suppliers, or your customers, talk to other businesspeople you respect and ask about their payroll service provider:

  • Which do they use?
  • Are they satisfied overall?
  • What features do they use?
  • Would they make the same choice if they were making the decision today?
  • How accurate is their work? How often do they have to have checks reprinted?