In “What to Look for in a Payroll System, Part 1″ we covered the first five important things to look for. Here is what you missed from the first part of this post:

Payroll as part of a complete workforce management solution

Empowering your employees with employee self service

Integration with accounting systems

Being scalable as your company grows

Robust reporting capabilities

As we mentioned in the previous post, choosing a new payroll system (or HRIS, or Time and Attendance) system can be a scary undertaking for many organizations. If you’ve previously had a system that didn’t work so well for you, or where the integration was a nightmare, or was incredibly costly, you can be really intimidated by the idea of starting all over again. Or perhaps you’ve never had a system, and you’re not entirely sure where to start.

These are concerns we’ve heard from our customers in the past. We want to reassure you that with the right questions asked, you’re well on your way to finding the right provider for you.

Proven track record with customer references

How long has the payroll provider been around?  Choose a provider that is experienced and reputable.  You don’t want to be risking your payroll with a newbie. Can the provider give customer references?  Actual customers are going to know all the great things about the payroll system AND all the warts.  The opinions of actual customers are going to be your best indicator that a payroll provider knows what it is doing and provides excellent customer service.

Dedicated payroll experts to support you

When you have a question and need to reach customer support, will you have to wait on the phone for 30 minutes?  Once you reach a support rep, will they be able to answer your questions quickly and accurately?  The best situation is to have a dedicated payroll support rep who is specifically assigned to you. That rep will know your specific payroll needs and can turn into your trusted adviser.  You also won’t have to waste time explaining things over and over again to a different support rep each time you call.

You also want to make sure that you truly have payroll EXPERTS on your side.  Payroll taxes and employment laws are complex and are continually changing.  You need to make sure that your payroll provider is knowledgeable about payroll and is staying on top of regulatory changes.  Are you getting help from kids straight out of school who are learning along with you, or do you have true payroll professionals with decades of experience working to support you? A good thing to look for is a support team with multiple Certified Payroll Professionals on staff.

Bonus points if the payroll provider offers training (a real life person that tailors the training to your specific business and answers your questions, not just a generic recording!) to show you how to best use the system.

Handles all payroll taxes and filings

Make sure that the payroll system will take care of all federal, state, and local tax calculations, payments, and filings.  Along with monthly, quarterly, and annual filings of payroll taxes, a good payroll system can prepare and distribute W-2s and 1099s for your employees and contractors. You don’t want to have to stress over what forms to file or what deadlines to meet.  If you want to eliminate this hassle, and never get hit with a late penalty again, find a payroll system that does this all for you.

Internet-based, Software-as-a-Service Infrastructure

A payroll system that offers an internet-based, software-as-a-service (SaaS) infrastructure provides a number of benefits:

You gain the flexibility to access the system from multiple locations at any time of day.  Of course you can process payroll from your office.  But you can also do it from your laptop while you’re on a trip to Hawaii!

It makes it easy for organizations to reduce their total cost of ownership by avoiding the traditional maintenance and upgrade issues of on-premise hardware and licensed software.  This eliminates the need to purchase and maintain expensive hardware and software applications.

With payroll, tax rules and regulations can and do change, so it is especially important to make sure you have all updates as soon as they are available. This is also a key benefit for providers that are constantly enhancing and improving their offering.  With a SaaS infrastructure, all enhancements, updates, and fixes are applied automatically and require no on-site IT support.

Top payroll providers utilize data centers that excel in both reliability and security.  The same technology that is used to secure bank information is used to ensure that your payroll data is safe.  In addition, the risk of downtime due to a disaster, power loss, or other disruption is minimized.

Review payroll before employees are paid

No matter how careful you are when entering payroll, mistakes can and will happen.  The important thing is to catch and correct those mistakes before your employees are paid rather than having the employee or the tax authorities catch the mistake days, weeks, or even months down the road.

With traditional payroll services, mistakes are only caught after the payroll has been processed, and making corrections becomes a painful and costly process.  You want a payroll system that gives you complete control, allowing you to see the results of a payroll run in real time BEFORE the payroll is committed.

The ability to audit payroll before checks are created, rather than having to correct mistakes after the fact, avoids costly and embarrassing mistakes and allows for a perfect payroll every time.

Don’t let fear guide your decision

The five questions covered in this post, and the previous post “What to Look for in a Payroll System, Part 1″ should get you on the right path to finding the right provider for you. These are great questions to ask before agreeing to a demo, and also great ones to raise during a demo, so that you can SEE how the answers will work for your company.