Guide to Negotiating a Payroll Processing Service Contract

Make sure the payroll processing service contract includes the features you need

Some of the top features small businesses look for in a payroll system are: tax filing specifics, cost of services annually, the most popular add-on features (and costs), set-up costs, error reconciliation time and charges, and pricing consistency. Any contract you sign should spell out which features are included in the price.

I recommend: Business.com offers a directory of small business-specific payroll services. Visit the payroll processing service “big guy,” ADP, for its Small Business Services – and for those services that will grow with your company.  

Pay attention to the conditions of your payroll system contract

Some payroll processing service contracts dictate that you must submit payroll information several days in advance and will charge you for last-minute changes. If you aren’t able to meet the deadlines, your costs will skyrocket.

I recommend: Business.com gives the small business owner many payroll system choices at Payroll Software. Check out PayCycle, the online accounting payroll software system that 30,000 small businesses rely on to handle “it all” – paychecks, electronic tax payments, W-2s, and more.

Read the fine print before signing with a payroll processing service

Who pays postage fees to deliver checks to your office? If you hire additional employees, do you have to pay additional fees? Will you have to pay for software updates? Are there any charges for filling out government required tax forms? Do they provide filing assistance for local taxes as well? What are charges for filing in multiple states? Before signing a contract, check out any hidden fees, add-on charges, or accounting and payroll software subscription/licensing costs. Watch out for low start-up costs that increase dramatically over time or a low base rate and high-cost add-on charges. With either of these situations, you could be spending more than necessary.

I recommend: Go to BuyerZone to describe your needs and get matched up with as many as six payroll processing companies. Go to All Options to compare prices, features, and services from multiple payroll processing service vendors through their free, no-obligation quotes.

Consider a contract for accounting and payroll software bundles

Find a payroll processing service that offers you options in terms of their services and best values. Think of it in terms of ordering in a 5-star French restaurant. If you order (services) “à la carte,” you’ll end up paying more than a simple prix fixe 4-course meal. However, if you only want the appetizer, then ordering a whole meal would be a waste – of money and products.

I recommend: At Business.com, check out the options and bundles available at specific payroll accounting services in the US. Go to AmCheck for a one-hour quote on payroll accounting services.