Service matters. Once your payroll process is in place, your satisfaction with outsourcing payroll company will be highly dependent on the level of customer service you receive.

To make sure you won't be disappointed, don't sign up for a service unless you have talked to at least three references. We recommend asking for references that regularly interact with the staff of the local office you will be working with.

Specifically, ask to speak with payroll clients from companies comparable to your own in terms of size, industry, and special requirements (for example, employees located in multiple states, high turnover rate, etc.).

To Ask References

• How responsive is the provider to your questions?
• Have you had any problems with accuracy?
• Have you used another payroll service? If so, why did you switch?
• How flexible is the service in meeting your needs?

Then pay attention to how willing the service seems to be to handle your specific requests. It is critical that you feel comfortable with the method of payroll communication you choose, and are willing to be vocal about your special needs. Most payroll services worth hiring recognize the value of customer service and will try to accommodate you to the best of their ability.

About referrals

The vast majority of payroll clients come from referrals -- often through accountants and banks. But if your bank or accountant refers a payroll service to you, make sure they have had a decent level of interaction with the firm.

Take their recommendation seriously only if they have direct experience with the service. Even then, make sure that the reason behind their referral isn't simply a desire to make their job easier by having all their clients on the same system.

To learn more about outsourcing your payroll: