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Questions to ask a Payroll Processor
I know I am ready to outsource my companies payroll, but I'd like to get some feedback as to the key questions to ask. I know the basics (fees, extras, time tracking), but I'd like to get some more ideas from people who have worked with payroll companies in the past.
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4 Answers
My name is Traci I work for Qqest Payroll Services which is one of the most technological and service oriented companies in the nation. Some of the challenges I see companies have is lack of integration with other business systems within the organization, like GL interface to accounting. Or being able to generate a report to upload to your 401k custodian without being charged for it every payroll, reports should always be included in your pricing. Other ideas are how easy is it to extract census and demographics for your 3rd Party Administrator, many of the older processors do not have this functionality. Be sure the system can track accruals accurately and benefits as well without expensive HRIS programs (they make sense in larger organizations) I am not sure how many employees you have? Another thing to ask is are you SAS70 Type I&II certified, this is a very expensive certification that protects you as a customer. You can even be asked to be listed on a processors insurance policy believe it or not. Request a copy if you would like. If you have more questions I would be happy to help you or your friend analyze different options and share the differences with what has been out there for years and what is available today with "Best in Class" technology. On time and attendance there should always be a purchase option on the hardware and software vs. paying monthly for the service. The ROI on a purchased option is much greater. I can be reached at 303-916-7066. Good Luck! Traci
Usually they do more than payroll, are there any other products you may be required to buy such as work comp to get the deep discounts they may give. You need to make a list of items you are currently using that they may provide cheaper and make the whole package cheaper, HRMS systems, time tracking, COBRA (since the tax credit is now tied to payroll), FSA, 401K.
If you are doing direct deposits vs live checks only what is the deadline that they will pull money from your bank. Do you have to have it done 2..3... days prior or can you do it the day before (especially if you hit a cashflow pinch). Do they actually deliver direct deposit on payday. I had one that always put it in my ee's accounts the day prior.
You should also find out about fees for report deliver vs electronic and what electronic storage fees will be. Fees for keeping payroll records. If it is web-based length of time employees will have access to their data.
Jade,
I have been in the payroll / hr outsourcing industry for 15 years and have worked with all company sizes. If you are smaller ( under 50 employees ) then the system should be fast and easy to use without a ton of nickle and dime charges. If you are larger, then integration with your current systems should be your main concern ( ie. GL / Time - etc ). Be sure to ask about technology. Most of the larger payroll companies still run on mainframes which complicates data flow. I would be happy to discuss this further with you. Please send me an InMail if you would like to hear how Perquest fits into the scenarios I described above. Good luck.
Hope that helps.
Besides the regular questions, as you have mentioned, and the excellent advice provided by my colleagues herein, my experience say it would be advisable to find out about:
1) Contingency Plan: In the event their system suffers a downfall, ask which is their contingency plan to fulfill the due dates stipulated to comply with your organization;
2) Severances: Make sure to receive quick and assertive response in case you need to calculate an unexpected severance payment. This is to say, you should have a valid expert to make calculations, grossing ups and help you analize best way to manage taxes on severances, and must be quick!
3) Confidentiality: In many cases you would not like to hire the same company your competitors are working with. Therefore, set up a confidentiality clause in the formal agreement would be interesting to be taken into consideration. Moreover, it is important to find out how that company handles customers confidentiality with their own employees, in order to avoid potential leakage of confidential data if an employee leaves the company.
Hope it is helpful.
Thank you for the question. Interesting to bring business memories on these topics!
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