How to Choose the Best Payroll Service Provider for Your Staffing Firm
Staffing agencies have unique needs when it comes to processing payroll, which is why many resort to using an outsourced provider. Using a professional payroll service rather than an in-house accountant could save your staffing agency time, money and legal issues. Take a further look at the benefits and best providers out there if your staffing agency struggles with making payroll.
While you get paycheck generation services from every payroll company, you should note that not all of them are same. Some PSPs (Payroll Service Providers), have the ability to prepare your taxes too, but you will sign and file them. A reporting agent, or RA, can provide all the same services as the PSP but will sign and submit your tax forms for you.
The third option would be a professional employer organization or PEO, which is a type of full-service human resource management company. A PEO can take-over payroll and filing of tax returns along with other managerial responsibilities like onboarding. This is an expensive option, making the PEO only worth looking into if you have multiple back-office operations that you want an outsourcing firm to handle.
How to Choose the Best Payroll Service For a Staffing Agency
You will have a lot of options to consider before choosing a payroll service for your staffing agency. Think about how much control you want to maintain over payroll and tax filing. How should W-2s be processed? Is the PSP going to function like a co-employee or will you continue to control the bulk of your operations? For some staffing agencies, the solution might even be as simple as an upgrade in accounting software to include payroll functions.
Start by creating a list of needs for your staffing agency by asking yourself these questions:
- Does the payroll company also need to handle tax filing?
- Would you want comprehensive reports sent to you?
- Do you need the PSP to manage benefits packages?
- Will they help in recruiting workers?
- Are you planning on offering a 401k plan to employees?
Your list of answers should give you an idea of the type of package you will be ideal for your needs. Once narrowed down, you can begin to compare prices. Some things to look for with pricing is whether you are charged monthly, or by the number of paychecks generated. This is of particular concern for a staffing agency as the amount of payroll can change dramatically from week to week. Also, look into fees for adding a new person to the payroll or hidden costs labeled as “processing” fees.
If you have already invested in a software for your payroll service, check to see how well a service provider can integrate with it. Some will allow you to grant access only to certain data stored, while others may open all of your business affairs to the outsourcing provider. If your payroll needs are straightforward, this could be the step where you realize that investing in a more comprehensive computer program is your best option.
The last step in choosing a payroll provider is to investigate their reputation and customer service which can be done by reading reviews and asking for referrals. Call the customer service department and ask questions to get an idea of what working with them is going to be like.
The Best Payroll Service Companies for Staffing Agencies
Intuit – Also known as QuickBooks, Intuit is one of the oldest accounting programs still in use today. They are well known for their excellent tax return assistance and have incorporated payroll generation as a part of the package. If you are already using Intuit to generate invoices for your clients, then signing on for payroll services will be an easy integration.
Paychex – This is another online option that allows you to keep payroll responsibility in-house, but doesn’t require an accounting expert to do it. If your needs are relatively small, and you have the time to input and review data, this is often an affordable option for smaller businesses.
ADP – ADP has a strong reputation for providing quality payroll services. They serve companies across all industries, including staffing agencies. The price may be a bit higher than other solutions, but their multiple tools and services will be worth it if you are looking to save time.
PayUSA – With PayUSA, you are going to have more flexibility. They can support organizations of up to 1,000 employees, and provide you with options for handling hourly and contract wages.
The cost of payroll outsourcing has decreased dramatically over the last few years, mostly because of the availability of online resources for business owners. If this is a part of your staffing business you’d rather leave to someone else, choose a company that can meet your expectations.