Here are five important things to think about when you look for a payroll provider:

Is the Payroll Service National in Their Scope?

If you have operations in more than one location or think you may in the future, it's essential to work with a provider that has national coverage.

Even if you plan to always work in one state, it makes sense to go with a national payroll service. Payroll providers that offer national coverage tend to have larger staffs and greater expertise in federal, state, and local payroll regulations.

They also tend to be able to offer a broader range of services. Before you sign with a payroll service, find out whether they have customers in all fifty states

Who's Responsible for Payroll Mistakes?

Be sure the payroll service guarantees that they will accept liability for penalties resulting from late or inaccurate payments. Even being one day late can result in significant penalties. When the payroll service make a mistake, they should always be responsible for making things right.

Is the Payroll Service Web-Accessible?

The ability to do your payroll anytime, anywhere via a Web browser is very convenient. Some providers require you to phone in payroll on a specific date or time, which can be very inconvenient. A web-based interface puts you in control of your payroll schedule and allows you to double-check that the data has been entered correctly before it's processed.

Is the Payroll Service's System Overly Complex?

If the provider uses software or a Web-based interface, take a look at the user interface that you'll have to use each time you do payroll. Some are easy to use and some are way too complex. Make sure it's simple and that you are comfortable with the interface before you sign on the dotted line.

How Does the Payroll Provider Calculate Its Fees?

Some payroll firm fees are based on the number of times you process payroll each month. Others calculate fees based on the number of employees you pay regardless of how often they are paid. Some will charge per-payroll fees and per-employee fees, and, on top of that, will add in a monthly fee. In some cases, many small incremental fees that weren't discussed in your initial meeting will surprise you when you start getting the bill – for example, maybe there's a separate charge for adding a new employee. Make sure you understand all the charges up front and be sure to ask how they might change over time.

More Questions to Ask a Payroll Service

Sorry. You're not done yet. There are a few more things to consider when choosing a payroll service. Read our article on More Things to Consider When Choosing a Payroll Service.