Construction Business Owner, April 2007 

There is little question that handling payroll, a necessary part of any business, can be challenging. Tax laws change. Company policies change. Employees change, as do their family situations and their payroll distributions.

A single mistake with any of those issues can lead to serious and significant implications for the company.

The IRS estimates that one out of every three employers has been penalized for a payroll mistake. Some receive stiff penalties-even for unintentional errors. These mistakes account for billions of dollars in fines each year. They also can damage your company's reputation and credibility-especially amongst your employees.

Keeping up with the changes in payroll regulations in order to ensure unwavering accuracy can be a full-time job. That's why fewer and fewer companies handle their own payroll. Employers are finding that outsourcing payroll can be a better economic solution in the short term, and it can save time, money and their company's image in the long run. Remember, time is money, and you may discover that your time is best spent on other tasks.

Now comes the tricky part. Identifying the right payroll partner can be a daunting task.. Do you choose the enormous, publicly-traded entity or the mom-and-pop shop around the corner? Are you better off with an online company or with old fashioned bricks and mortar?  Just as your business continues to evolve, so does the payroll industry. As each day passes, new options are introduced in the payroll arena. It seems that every company offers similar-but different-service packages, security and costs.

Because payroll is such a sensitive area, it's vital that you choose a reputable and highly professional payroll services firm. So, how do you find the one that's right for you?

The key is not knowing about all the payroll companies, but rather, understanding your company and your individual needs. For example:

1. How do you need to process your payroll? If you're on the road quite a bit, you may require a web-based service. Then again, you may prefer to give your information directly to your payroll services provider.
2. What does it cost for you to handle payroll internally? Make sure this amount includes the cost of staff and the cost to maintain training.
3. What are your unique needs? Basic payroll services generally include calculation of payroll and tax obligations for each employee, check printing and delivery, management reports, and quarterly and annual tax form preparations. But there are many more services available.