Articles

Critical Factors When Selecting or Switching Your Payroll Company

Written in conjunction with TMF Group

Many payroll processing companies tout the ease of switching to a new payroll provider and leave other considerations out of the conversation. These factors include handover periods, large-scale rollouts, foreign exchange matters and payments across multiple countries. Certainly, utilizing a third-party processor has benefits, yet these five factors will play a critical role in the final decision.

1. Accuracy and Cost Effectiveness

Inaccuracy on a paycheck has the potential to become a serious issue, especially if those mistakes develop into repeat problems. In addition to putting a dent into morale, a company may face legal challenges, higher employee turnover and bad press. Moreover, continuous errors will eliminate any cost savings from switching to a third-party provider.

2. Up-to-date Compliance with Regulations

Mandates pertaining to electronic reporting of tax information, social security and labor force data require continuous efforts to remain in compliance. If a payroll processor makes miscalculations or become out of step with regulations, the employer will face potential legal actions. Payroll partners must have sufficient in-house compliance departments to address the rapidly changing laws across multiple states and countries.

3. Information Systems

In the Internet of Things era, even cutting-edge technology becomes obsolete quickly. Providers rapidly release software solutions with higher rates of accuracy and compliance, as well as ease of use, which can render today’s systems archaic. Long-term contracts must include appropriate clauses to address necessary updates or release mechanisms when better technology becomes available.

4. Organizational Change

Change is expected, and a payroll provider must be prepared to adjust for mergers, changeovers in senior management or adoption of new technology, not just employee turnover. A company-wide rollout of a new internal system can disrupt critical data exchange between the employer and the payroll provider, and the provider will need strategic solutions in place to mitigate or eliminate any risk.

5. Superior Customer Service

Executing the payroll takes more than top-notch software. A payroll partner must have competent, skilled staff to address mistakes and changing regulations in a seamless manner. Moreover, being bounced from department to department signals a lack of professionalism and proficiency, and that can drive up costs and frustrations.

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