When it comes to payroll solutions, there are plenty of options. Each solution has its own personality. Choosing a solution your business can grow with is a smart approach.  

While switching payroll services isn’t uncommon, it can be costly in terms of data loss, service gaps, and time required to fully implement and tune the new solution. Selecting a good, scalable payroll services solution from the get-go can save you hundreds of hours and thousands of dollars in transition time later. Here are 10 questions to ask prospective payroll services: 

1. What capabilities are included? 

While it’s nice to invest in a platform that can scale with your business, you might not need all the bells and whistles right now. For this reason, take stock of what you’re wanting. Your wish list might include any of the following types of services: 

  • Regional Tax Compliance 

  • Employee Time Tracking 

  • General Ledger Service 

  • Built-In Data Privacy & Security Tools 

  • Garnishment Management 

  • ACA Compliance & Reporting 

  • Employee Self-Service Tools 

Evaluate what you’re willing to invest—typically a monthly, subscription-based fee—in unifying and streamlining those capabilities via a payroll software solution. A product might offer the soup-to-nuts capability you’re looking for, but is it all included in the standard package you’ve budgeted for or will you need to pay more for add-ons? This is helpful to know ahead of committing to a contract or investing in a product implementation.  

2. Is the payroll service 100% compliant with federal, state, and local tax laws? 

You need to feel confident that your payroll solution is completely compliant, with a proven history of maintaining a flawless and accurate payroll tax calculation engine. Failing to withhold the right state, local, and federal taxes or make timely filings can end up costing your company and employees thousands of dollars. Prevent unexpected fines and large, end-of-year tax bills by using a solution that maintains evergreen compliance with regional tax requirements.  

3. Who is liable if compliance mistakes are made? 

If a tax filing does not get made in a timely manner, who is liable for the mistake–you or your payroll service provider? Outsourcing payroll to the right provider can protect your business from costly compliance mistakes.  

4. Is time entry automated? 

Manual time tracking takes away from productivity. By automatically logging employee time while their computer is active, you can not only gain the peace of mind that comes from knowing workers are putting in the agreed-upon time but also give them more time to be productive—instead of messing with manual time entry.  

5. How will the solution help you with the Affordable Care Act?  

As your business grows, you’ll need to learn a lot about the Affordable Care Act. So you will want to choose a solution that helps you understand  your compliance responsibilities and helps you avoid penalties. Make sure the solution you choose has an easy way to assess and report on your employees’ ACA eligibility status. You will need the right tools and reports to monitor and maintain compliance and determine the impact of the ACA on your business. 

6. Are there employee self-service tools?  

If records must be manually adjusted every time an employee needs to change an address, benefit, or deduction, then your HR team will soon find themselves spending more time updating trivial information instead of focusing on strategic training and compliance material that could help your organization improve safety, lessen liability, and keep employees up-to-date on organizational expectations and requirements.   

7. What does onboarding and after-sale support entail?  

Some solutions can be implemented in an afternoon while others take weeks. Ask about potential payroll vendors to provide an onboarding overview: How long does it take? What’s included? Is there a partner success manager to answer questions during that time? Beyond asking the vendor, ask some of their existing customers about the onboarding process—or find customer reviews that answer this question.  

Once onboarding is done, what happens next? Many small payroll software companies are set up such that there’s little to no after-sale support. This might be okay for you, but if it’s not, ask about what ongoing support looks like. Is it even available? Is it included, or is it an upcharge?  

8. Is there a dashboard overview?  

Features and capabilities are helpful, but how easy is the new system to learn and to use? HR leaders need a central overview that provides an eagle’s eye view of everything in the pipeline. Without this kind of visibility, it’s easy for important projects and activities to get overlooked. Look for a solution that provides customizable high-level dashboards plus an opportunity to drill-down into the details with a single click.  

9. Does the payroll service integrate with your other solutions?  

Integration is important. Without it, none of your other business solutions can communicate with your new payroll tool. Making sure your existing budgeting, accounting, and expense management applications integrate with your payroll solution is vital—saving time and effort by reducing the need for manual data entry. Seamless integration with your General Ledger, Time & Attendance, and HR systems eliminates the need for you to duplicate the same data in multiple systems.   

10. How will the vendor secure your company and employee data? 

When you choose a cloud-based solution for efficiency and functionality, you need to be sure that the vendor delivers a safe, secure, reliable and compliant product. Ask about how the vendor complies with legal data privacy standards, including the Health Insurance Portability and Accountability Act (HIPAA) and the General Data Protection Regulation (GDPR). Does the solution offer the ability to customize security and access based on user roles? At what data center(s) does the vendor store your information? How is security audited? How is data backed up? Does the vendor pass independent third-party security audits, such as SOC 1 and SOC Type 2 audits? 

To learn more about how to identify the best payroll solution for your small business, download the Asure Buyer’s G
uide for HR & Payroll

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