Studies suggest that over 30 percent U.S. businesses that handle payroll in-house find themselves facing IRS audits and penalties for payroll miscalculations? Do you want to free yourself from the hassles of payroll processing while simultaneously enhancing its efficiency? Do you know that reputed service providers can greatly reduce the costs of payroll processing? Do you want to know what characteristics separate effective payroll service providers from the crowd? If yes, then read on to find out the seven habits of highly effective payroll providers.

Habit #1: Accountability

Reputed firms are responsible and accountable for any errors in payroll and quick to identify and rectify mistakes. Effective payroll service providers use an in-built error checking system to catch errors before issuing checks and money transfers.

Habit #2: Compliance

Effective providers comply with all local, state and federal employment and tax laws. Through stringent checks and balances, reputed payroll providers drastically reduce or eliminate IRS audits and penalties for transgressions that occur during payroll processing or payroll tax processing.

Habit #3: Online Data Transfer

For smooth payroll processing, timely and convenient delivery of payroll data to your provider is a must. Effective payroll service providers allow you to transfer data, essential for payroll processing, online. They also offer online systems that can be accessed through web interfaces to avoid any need for installation and maintenance of expensive software.

Habit #4: Flexible Billing

All good payroll service providers offer you a range of fee structures. Most providers charge initial setup fees and a flat fee for every employee per payroll cycle. Some Payroll services processing companies offer different fee structures that charge you extra, over and above the yearly flat fee per employee, for additional services.

Habit #5: Online Tools

Payroll service providers offer a range of online tools for your staff such as tools for viewing and printing payroll stubs and tax forms and making changes to deductions. Payroll providers also offer various online tools for business owners. They include tools for entering time card information for hourly staff and tools for monitoring payroll expenditures and deductions to enable you to assess and regulate your finances.

Habit #6: Customer Service

An effective payroll processing company will provide you with excellent customer service characterized by quick responsiveness to your queries. It is of utmost importance that your provider offer you a short turnaround time for rectifying mistakes in paychecks, creating new accounts for new employees and addressing other payroll related issues.

Habit #7: Advanced Services

Effective payroll service providers offer you a range of advanced services for further reducing your payroll problems while improving its efficiency. For retirement plans, they work with financial advisers to help your staff to make the correct investment decisions. Other services include running background checks, distribution of key communications to staff members when required, and enrollment and monitoring of life insurance, health care and other employee benefits programs.

Survey a number of payroll providers, services offered and fees charged before making a decision. Get references and find out about the performance and market reputation of your preferred providers to assure yourself of quality and reliable service. Lastly, consult your attorney and accountant about all contracts before signing on the dotted line.