The cost for managing and processing payroll in-house for those small businesses with 50 to 100 employees can average over $50,000. Payroll mistakes and penalties unfortunately happen when humans are involved in reporting. A recent survey found that these ‘mistakes’ can cost over $30,000 to fix.

This data is exactly why most businesses choose to work with a payroll outsourcing company to avoid these fees. So how do you negotiate a better deal with a payroll services company?

• Do you belong to any trade or business groups? If so, some of these associations will negotiate discounts with payroll companies so check before you call.
• Check to see if the company offers a rate package or sliding fee structure.
• If you need a variety of features for your business, negotiate a ‘package’ deal instead of paying per service.
• Will the company allow you to try them for free? How about negotiating a lower introductory rate? Most companies will offer discounts to new businesses but make sure they are credible before you hand over all your business information.
• The payroll company should have a clause that takes responsibility for late filings. Make sure this is in your contract before moving forward.

Payroll processing companies can charge additional fees if you add new employees or even change billing information. Ask for these fees up front and find out which fees you can negotiate before you ‘lock in’ with them.

Image by abenjumeda.