The Payroll Blog

News, tips, and advice for small business owners

Is Your Payroll Service Provider Built to Last?

Posted On
11/13/2019
By
Sarah Skerik

When it comes to payroll, there are a lot of high stakes in play: tax compliance, employee trust, and as the recent MyPayrollHR story illustrated -- in which a payroll company shut down overnight and absconded with millions of dollars of their customers’ payroll funds -- outright payroll fraud.

The question on many peoples’ minds is this: how can I tell if I can trust my payroll company? Today, we’re going to outline the key questions you should ask – as well as the behind-the-scenes audiences, operations, and protections to look for -- when vetting a new payroll provider for your small business.

Do you know who you’re getting into business with?

When you select a payroll service provider for your business, you’re choosing to trust that provider with a lot of money as well as critical business data -- including confidential, personally identifiable information for yourself and your employees, banking information and payroll tax reporting and compliance.

In short, payroll is a big deal, and the decision you’re making is a big one. How can you tell if the company you’re entrusting with these responsibilities is worthy of that trust?

First, ask who are they, really?  Look into the company details when assessing potential payroll services. 

  • How long have they been in business?
  • How many customers do they have?
  • What’s the corporate structure?
  • Are they set-up to protect my small business?

How long have they been in business and how many customers do they have?

One of the greatest indicators of future performance is past performance. That’s why it’s so important to look for a payroll service provider that is well-established and has a reputation for excellence and integrity. For example, SurePayroll was founded 20 years ago and has run more than 10 million payrolls since.  Additionally, SurePayroll is a subsidiary of Paychex, the leading provider of payroll and HR services in the United States. Together, Paychex and SurePayroll pay 1 out of every 12 American private-sector employees and serve more than 670,000 small businesses (and their 1.5 million employees.)  Selecting a company with proven experience and a history of quality service and ethical business relationships can reduce the risk for you, your employees and your business.

What’s the corporate structure?

We mention corporate structure because when it comes to payroll service providers, there are big differences. Some are privately-held, others are new-to-the-industry startups or limited liability companies, with variable governance requirements and practices. In contrast, public companies are subject to extremely rigorous security requirements and audit scrutiny.

“SurePayroll provides an easy-to-use online payroll service that’s on par with some of the technology-first startups that are recent entrants to the market,” notes John Cumbee, SurePayroll’s general manager. “At the same time, you can’t overstate the stability and protection a larger, publicly-traded company offers, including external and independent audits of processes and an industry-leading security infrastructure. Our customers have counted on Paychex for the last 48 years, and all they must do is look at our performance on Wall Street to see we are here to stay.”

Are they set up to protect my small business?

While company reputation, size, and structure are all key markers to look for when choosing a payroll service provider you can trust, there are additional security measures companies put in place to protect their customers.  For instance, SurePayroll underwent a SOC (1) audit, meaning the company’s security and controls were scrutinized according to the standards established for this kind of audit and achieved SOC attestation.

There’s also the added assurance that comes by using a provider that’s achieved IRS “Bulk Provider” status by having a strong record of filing high-volume, accurate payroll records. SurePayroll, as a Paychex company, utilizes the Paychex TaxPay system with “Bulk Provider” status on behalf of our customers.  

Another step SurePayroll takes to protect customers is by offering guarantees. Depending on the level of service selected, our customers can expect a tax calculation or full-service taxes paid and filed guarantee, which covers them if they receive a notice from the IRS or another tax agency based on a filing or calculation we made on their behalf. We even work with the agency to resolve the issues for our clients, and if at fault, will pay all the associated penalties and fines.

What to look for when assessing payroll providers:

Congratulations! Now you know more about the behind-the-scenes details of the payroll industry than you ever thought you would.  But as we said at the beginning of this article, payroll is a big deal. When you’re looking for a payroll service provider, you need to ask them some tough questions – and you need to know what the right answers are.

  • How long has the company been around? And what’s the corporate structure? You want to know if you’re looking at a potential partner with deep experience, rigorous controls and the right kind of security framework.
  • Is the company SOC (1) compliant? This is an easy one – the answer is yes or no, and the answer you want to hear is “Yes.”
  • Has the company been granted IRS Bulk Filer status? If the answer is yes, you know that the provider has a strong track record in high-volume, accurate filing of payroll records.
  • Does the company offer small business payroll protection in the form of a guarantee? The answer should be yes – it’s one of the greatest benefits of outsourcing payroll.

There’s another benefit to the rigorous vetting of your new payroll partner – you’ll enjoy the peace of mind that comes knowing that you’ve got a partner that’s built to last and that you’ll be able to rely upon for years to come.