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By Anna Marie Lee

Topics: Payroll


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Choosing a payroll services provider is a big decision. Big companies like Paychex might seem like the ideal solution, but once you look closely, you might realize they don’t fit your company’s needs at all.

You need to know your business will be valued, your questions and issues will be handled in a reasonable timeframe, and you will get what you pay for.

Don’t make the wrong decision. Here are some red flags of a bad payroll services provider. If any of these seem familiar, it’s time to switch to a better provider.

1. Billing Misunderstanding

You should know exactly what you’re getting billed for. A payroll services provider should have a billing system that is explicit. Be wary of services that are bundled together in an invoice. You may be paying for services you neither asked for nor use.

This kind of billing is sneaky and ends up costing you more than you should be paying for the services. If the payroll services provider is doing this, it’s time to find a new one.

2. Low Customer Satisfaction

You should be fully satisfied with the level of customer service you’re receiving from a payroll services provider. The provider is responsible for a very important part of your company’s operation. You should be able to speak to someone about any issues that arise or questions you may have.

Your payroll services provider should be fully invested in you as a client and ensure your needs are met. If you ever feel like this isn’t the case, it’s time to move on and find a better provider.

3. Missing Deadlines

Never should a payroll services provider miss any kind of deadline. It’s bad business and it can hurt your employee relations as well as lead to fines and penalties. Should this ever happen, it’s a giant red flag, and the situation needs to be rectified immediately. The solution: Find another provider.

4. Errors

You’ve outsourced payroll to benefit from the provider’s expertise and experience. Errors shouldn’t occur. After all, companies pay providers so mistakes don’t happen. They’re paying for accuracy and expertise.

If you’ve been dealing with too many errors, it’s time to shop around.

5. Security and Confidentiality

Steer clear of a payroll services provider with past data breaches. It shows security isn’t a priority.

You trust your provider with sensitive employee information. You need to protect that data at all costs. Do your research before committing to a provider. 

6. Solutions Not Provided

A good payroll services provider is not only easy to contact but also able to provide solutions to problems or new challenges that your company may be facing.

7. Upselling

Another red flag of a bad payroll services provider is upselling. Upselling is a sales technique where a provider contacts preexisting clients and tries to sell them products and services on top of what they’re already paying for. If your company hasn’t asked for and doesn’t have a need for these products or services, be wary. Your satisfaction should be a provider’s top priority—not making additional sales.

If you’ve noticed any of these red flags, you should switch providers to gain a better experience.


Anna Marie Lee

Anna Marie, Director of Payroll Operations at Paymedia, has over 20 years of experience in public accounting and payroll. She is a Certified Public Accountant who works closely with small business owners. She has spent the last six and a half years evolving in the payroll service industry and now heads the Paymedia operations team. Anna Marie is proud to be from New Jersey, where she lives with her four beautiful kids, her husband, a dog and a cat. To Anna Marie, nirvana is sitting at the beach, doing absolutely nothing.

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