Needing a New Payroll Provider? Here Are 7 Red Flags to Avoid

From lack of transparency to pushy sales tactics, there is a lot to consider when interviewing for a new payroll provider. Below we’ve listed 7 of the most important areas you should concentrate on when speaking with them. Of course, every Company is different so it’s crucial to make sure you know what’s important to you and your organization.

1. Lack of Transparency in Fees

• If the payroll company isn’t upfront about their pricing structure, that’s a warning sign. Hidden fees or unclear billing practices can quickly eat into your budget. Reliable companies will provide clear, itemized pricing and explain costs for additional services.
• Tip: Always ask for a detailed breakdown of costs before signing a contract, if you have to sign one.

2. Poor Customer Service

• Unresponsive service or difficulty reaching support when you need help can cause major headaches. Your payroll provider must address your concerns quickly, especially since payroll errors can impact your employees.
• Tip: Look for companies that offer dedicated account representatives.

3. Outdated Technology

• Payroll systems that rely on clunky, outdated software might not integrate well with your other business tools or fail to provide the modern functionalities you need, such as automated compliance updates or employee self-service portals.
• Tip: Choose a provider with advanced, cloud-based systems for better efficiency and accessibility.

4. Limited Security Measures

• Payroll involves sensitive employee data like social security numbers and bank account information. If a company doesn’t prioritize robust security measures, such as data encryption and multi-factor authentication, your business is left vulnerable to fraud and breaches.
• Tip: Ask about their security protocols and whether they comply with regulations like GDPR or SOC compliance.

5. Negative Reviews or Bad Reputation

• A payroll provider with numerous complaints, bad reviews, or a tarnished reputation is a red flag. Dissatisfied customers often point out recurring issues like payroll delays, processing errors, or poor dispute resolution.
• Tip: Check online reviews, client testimonials, and Better Business Bureau ratings—and don’t hesitate to ask for references.

6. Pushy Sales Tactics or Hard-to-Understand Contracts

• A trustworthy payroll company will give you time to review the contract and won’t pressure you into making a quick decision. Be cautious with vague contracts that leave too much room for interpretation. Better still, choose a Company that doesn’t do contracts!
• Tip: Carefully read terms and conditions, and get legal advice if needed.

7. Limited Services or Rigid Plans

• Some payroll companies may offer just the basics and charge extra for every customization. Others might be unable to scale as your business grows or handle specific needs like multi-state payroll or benefits integration.
• Tip: Look for flexible providers with scalable solutions that align with your business goals.

Final Thoughts

To avoid these pitfalls, do thorough research before committing to a payroll provider. Request demos, ask tough questions, and prioritize providers that align with your business’s values and needs—companies like APlus Payroll that are committed to transparency, cutting-edge technology, and exceptional service.

If you’d be interested in speaking to us about how we may serve you, please contact us here. Advice is always is free!