How to Choose a Payroll Service for Your Small Business

Charlette Beasley

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Choosing a payroll service can be overwhelming if you’re unsure where to start. There are numerous options from national payroll solutions and online software to local payroll services in your area. What’s best for you depends on the features that are most important to your business. 

As a local payroll service, we’ve found a trend among the small businesses we partner with: they tend to value quality customer service that’s easily accessible, accurate payroll and tax processing (no passing on penalties for errors to their clients), payroll compliance expertise, and an easy-to-use payroll system. 

If these priorities align with your top payroll needs, consider partnering with Cirrus Payroll. The company was founded by a CPA, which means you get access to payroll expertise and beyond. Customer service is top-notch and personalized–you receive cell numbers instead of a call center. And the system is easy to use.

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Follow these steps to be sure you’re choosing the best payroll service for your company:

1. Identify Payroll Features That Are Must-have vs Nice-to-Have

Must-have payroll features are necessities that your business can’t do without. For instance, if you need a simple way to ensure your payroll taxes are filed and paid on time, signing up for a do-it-yourself plan that only calculates tax amounts wouldn’t make sense–think Patriot Software’s Basic product. 

Features that are nice to have are akin to wants. You don’t need them to run your business efficiently, but they would make life easier. Let’s consider time tracking. 

Imagine a business with two hourly employees that’s planning to grow exponentially in the next year; although it’s not yet necessary, having a fully integrated time and attendance system that allows employees to clock in and out would be helpful. Instead of your employees or you manually entering their work hours, the system automatically captures and calculates it before feeding it into your payroll system. This would save you time from having to transfer data from one place to the other, and ensure the information is reliable.

The example we just covered also points out another important consideration you should keep in mind. When choosing a payroll service, it’s essential to look ahead. What do you need in a payroll service now vs what you will need in a year or two? Can the provider handle your growth plans? 

Payroll Services Most Businesses Need

Although payroll needs vary from business to business, there are some general features most need:

  • Payroll processing, including overtime calculations
  • Direct deposit and paper check options
  • Automated payroll tax payments and filing
  • Year-end tax form preparation and distribution (W2 forms)

Other attributes you should consider are customer service quality, ease of use, and software integration options.

Customer Service

Most payroll services offer some level of customer support. You’ll find that many national services and online software provide free chat within their apps, on the site, and via email. Many of them also provide live phone support, although customers are usually routed to a call center where hold times can be lengthy–check third-party reviews to see how much frustration this causes. If your payroll service review is thorough, you’ll even find providers that charge extra fees for customer support. 

This is where local payroll services shine. Instead of 800-numbers, you get direct numbers to the local team that handles your payroll–at no extra cost. With Cirrus Payroll, you’ll receive your payroll team’s cell phone numbers vs just office numbers; this isn’t as common, which makes it even more valuable.  

The customer service that local payroll providers bring is essential to employers who:

  • Don’t like to be transferred to multiple departments
  • Would like to get to know their payroll reps
  • Don’t have much time to wait on hold
  • Prefer not to be upsold on products they don’t need just to help a sales rep meet their quota

Ease of Use

Ease of use covers both payroll systems and software. You’ll need to assess the level of technical expertise you have to onboard all of your employees. Will you need help, and do you have the time to do it?

  • Many online payroll software require you to handle the setup yourself,  sometimes with help from a customer service rep over the phone. 
  • National services tend to handle it for you, but it’s included with a hefty setup fee and can take a few weeks.
  • Local payroll services usually have the time to walk you through the setup, do it with you, or even handle it on your behalf. They’re smaller and have more capacity to personalize this experience than larger payroll companies.

Other factors affecting ease of use that you should consider are how intuitive the payroll software interface is–is it easy to figure out what you need to do and where? 

Are there compliance experts on staff? Although many online payroll software companies mention that compliance is built into the software, this is limited. Can you speak to live representatives who are always abreast of current payroll legislation? If you don’t have an expert in-house, this is important. You can learn to use payroll software and still make compliance mistakes that will lead to IRS penalties or other litigation.

The payroll provider should have certified experts who can confidently guide you when issues arise. For instance, the pandemic caused some major changes to take effect quickly, and without a team of payroll experts on your side, you may have easily overlooked  tax credits you’re eligible for or sick leave requirements you should’ve complied with.

Software Integration

Software integration is one software connecting with another to transfer data. This is important when it comes to payroll, because it can save time. If you’re already using QuickBooks, partnering with Cirrus Payroll means you won’t have to manually transfer your payroll information to the general ledger. Our system will connect directly to your QuickBooks system and automate the process.

Additional Features Payroll Services Offer

Additional payroll features you may need are:

  • Time and attendance: This is a must-have for some businesses, but for others, like those with only salaried employees, it’s not necessary.
  • Workers’ comp management: Most states require workers’ comp, but some businesses purchase it through their own independent broker.
  • Employee Benefits: This can include health, dental, or vision insurance, commuter benefits, pre-tax savings accounts, retirement plan options, etc. 

These features aren’t offered by every payroll provider, especially those primarily focused on payroll. Benefits fall into HR support. 

 

2. Compare and Contrast Payroll Providers

 

Once you’ve identified the features you can’t do without, your non-negotiables, and those that would be nice to have if available from the providers you consider, you can start comparing and contrasting. 

Cirrus Payroll vs National Payroll Service Competitors (Paychex, ADP)

Both Cirrus Payroll and the big national payroll companies like Paychex and ADP provide full-service payroll with automated tax payments and filing. They also process check payments and direct deposits.

What sets Cirrus Payroll, a local payroll company, apart is that it:

  • Is local and easy to access
  • Is focused on providing excellent payroll service vs spreading resources across all the facets of HR administration
  • Was created by a CPA that understands where payroll fits into the overall business operations
  • Provides personalized customer service, (email, phone, or even text your dedicated rep!)

 

Cirrus Payroll vs Online Payroll Software Competitors (Gusto, QuickBooks Payroll)

Both Cirrus Payroll and online payroll software like Gusto and QuickBooks Payroll provide full-service payroll, similar to ADP and Paychex. They also pay employees, offer time and attendance, and have compliance experts you can speak to.

Cirrus Payroll stands out from these providers, because it:

  • Provides compliance expertise every step of the way, not just in specific plans
  • Offers more reliable and consistent customer service
  • Provides personalized customer service from local reps vs sending clients to a call center

 

We recommend documenting your research, so you can take the time you need to really assess what each payroll company has to offer.

Contact Each Payroll Company 

 As you try to narrow down your list of payroll providers, don’t hesitate to place a call if you have a question. Emailing and even chatting online with a representative can help, because websites are usually limited in the information they provide, especially around pricing and how the features work.

Some common questions business owners ask when shopping for payroll companies are:

  • How long does setup take?
  • How long is the direct deposit processing time?
  • What software does your payroll system seamlessly integrate with? 
  • Do you handle payroll tax registrations or am I on my own?

It’s a good idea to list the questions you have in mind before reaching out to the provider. This will help ensure you get the answers you need without calling the same company multiple times.

Schedule a Demo

Once you’re down to a handful of software, consider scheduling free demos to see how they work. This will show you whether it takes four steps to run payroll or ten as well as how intuitive the software interface is. Some systems are outdated, clunky, and hard to use. During a demo, you can ask questions and even request that the representative show you how to do a specific task. They generally show you the most common tasks, like how to approve an employee’s work hours, so be sure to consider the specific needs of your business.

 

Important Reminder: Be sure payroll companies under consideration have the non-negotiables. Compare the number of steps it takes to perform certain tasks with different companies, like approving hours worked and net payroll amount. Eliminate all but the top three services.

 

3. Choose the Payroll Service That Provides the Best Value

 

When you’re done evaluating all of the payroll services under consideration, you should select the one that offers the best value for what your business needs. Ultimately, you should strive to secure all of the features you need to run payroll for your business; that might be specific to your business size, type, or even the industry it’s in. 

And steer clear of services that offer you much more than you need; for instance, you shouldn’t sign up for a professional employment organization (PEO), like Paychex PEO, if you’re not planning to offer benefits. You’ll pay much more than necessary for access to features you don’t need.

Wrapping It Up

Take your time when choosing a payroll service. Start with assessing the needs of your business, so you know what you’re looking for. You’ll have the option to choose a national payroll company, online payroll software,  and a local payroll company. 

If customer service is a priority and you want to be able to speak to your payroll representatives face-to-face, if necessary, consider a local payroll service like Cirrus Payroll. It manages employee paychecks, payroll taxes, and even software onboarding. Sign up to try it out today!

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