How will you communicate your payroll system data?

The method you use to get payroll data to your provider is essential -- here are the common options.

Your payroll provider will need a way to receive your payroll system information each pay period. Depending on the service, you can transfer your company's data via telephone, fax, modem, or the Internet.

Phone

Once the traditional tool for communicating payroll data, the phone's popularity has waned in light of modem-based communication. But if you do choose to call, payroll service providers will schedule a mutually convenient time for the information transfer.

A few things to keep in mind: this task should be added to your regular schedule, as making the call can be easily forgotten in the middle of a busy time in the office. Also, make sure that you have someone to call in the information in your absence, and that your payroll service representative is always available at the scheduled time. Otherwise you'll be frustrated, and your payroll may even be delayed.

Fax

The greatest advantage to faxing is that you can send in payroll at any time of the day. Proponents of faxing also claim that written records are superior, since they reduce the chance of miscommunication, and the hard copy is always available for comparison. Faxing also saves time when relaying an extensive amount of information. However, faxes can easily be lost or handed to the wrong person, or the fax machine could be busy.

To alleviate these concerns, confirm a few points before agreeing to transmit payroll via fax. First, find out where the fax machine is located and how incoming faxes are handled. Second, consider requesting a return fax receipt. In addition, the payroll service should have a "never-busy" fax policy; any service that accepts information via fax should be equipped with a system where busy signals are nonexistent.

Modem

Using PC-based software to prepare and transmit payroll information has become more common in the last decade, particularly for businesses of 50 employees or more or those that require extensive or diverse reporting. Modem communication eliminates the chance for outside errors because you input the data yourself; there's no risk of inaccurate re-keying by the payroll service.

In addition, payroll software usually allows you the option to check up on the payroll service's work. Virtually all of today's software programs provided by payroll services are Windows-based and more user-friendly than pervious versions.

Although the cost for software and training can run up to several hundred dollars, many services will provide both for free. But keep in mind that software changes rapidly and your system needs to remain current.

Internet

Using the Internet allows companies to download payroll information from any computer that is Internet-accessible. If you consider this option, make sure the service you use thoroughly addresses security issues -- passwords and encryption should always be used for your protection. Also, in case of network failure, make sure you always have a backup plan, whether it be sending your information via fax or phone.

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