Outsourcing Your Payroll If handling payroll by yourself has become a hassle, maybe it's time to go with an outside service.

Robert Nagel was spending up to two hours each pay period doing payroll for the 20 employees of Surf Taco. "It was taking way too long, and it wasn't always accurate," says the owner of the Point Pleasant Beach, New Jersey, restaurant.

After Nagel hired an outside payroll service to process employee checks, the time he spent on the job dropped to a few minutes, and the error count fell to zero. Every Monday morning he gives information about each employee's hours by phone to Automatic Data Processing Inc.(ADP) of Roseland, New Jersey, and checks accurate to the penny are delivered the next morning. "I just tell them the hours, and they take care of the rest," says Nagel, 32.

Most small companies do their payroll themselves, and if you have just a few employees and payrolls that don't vary much from one pay period to the next, that may be fine. But for many entrepreneurs, outside payroll services can be cost- and time-effective solutions to payroll processing hassles. There are many national and regional providers, and serving firms with fewer than 100 employees is an important focus of the industry. If you'd like to look into an outside payroll service, keep these points in mind: