When requesting proposals from payroll service providers, your RFP can include in-depth questions about their payroll processing capabilities, how payroll services fit into their suite of human resource solutions, and how they provide services to payroll clients.

Sample Request for Proposal (RFP) Questions for HR and Payroll Services
A request for proposal (RFP) or a request for quotation (RFQ) is a document requesting bids from potential payroll vendors. An RFP for payroll services typically involves more than a request for the price. Other requested information may include basic corporate information and history, financial information (can the company deliver without risk of bankruptcy; is the company likely to merge or be acquired in the short term), technical capability, estimated completion period, and customer references that can be checked to determine a company's suitability.

The following general information categories and questions can be used to develop an RFP specific to your company and your payroll processing needs.

SOLUTION OVERVIEW

• What services do you offer?
• Describe key accomplishments or industry firsts
• Does your organization provide payroll services internationally?

Payroll
Pre-processing

• Does the system provide pre-edit reports based on user-defined parameters for gross-to-net pay calculations?
• Describe the audit process for each payroll
• What processes are in place to make corrections to payroll errors?

Payroll General

• Does the system support an online "what-if" with update capability?
• How many payroll checks did you process last year?
• What tax updates, if any, are provided and how are these updates received?
• Describe your general ledger process.
• Does the application allow for the allocation of costs to any level of detail?
• How does the payroll application handle multiple account numbers for the same employee?
• Does the system allow direct entry of employee time over the Internet using a standard web browser?
• Can customers view W2 information throughout the year?
• Are there start and stop dates for deductions?
• Does the system have the ability to set-up deduction with appropriate future effective date?
• Can batch input screens for hours and earnings be customized or user defined?
• Can mass increases be generated?
• Does the system allow direct entry of employee time over the Internet using a standard Web browser?

Year End

• Describe the vendor/client responsibilities for the year end and/or year begin process.
• Are year end services provided?
• Are garnishment payments automatically generated to the payee?
• Does the system maintain all federal and state regulations for garnishment processing?
• Can the system create one W-2 for each EIN the employee worked?
• How do you meet the January 31 deadline for distributing W-2s?
• How does your system handle manual checks?
• Can the user sort reports by name, classification, gender, and ethnicity?

Tax

• Is there PC/online access to current and historical tax information?
• What is your process of tracking amendment and inquiry response time?
• How do you distinguish yourself from the competition in the area of tax processing?
• How do you keep clients informed of what's going on with the various tax jurisdictions?
• Will we have a dedicated Customer Support Representative specifically to handle Tax issues?
• What are the core competencies for Customer Support Representatives in the Tax area?
• What is the average length of time a client retains the same Tax support representative?
• How are adjustments handled?
• What type of tax reports are generated each pay period?
• Will you provide copies of all tax filings?
• What are three frequent reasons payroll customers select your company over your competition?
• What is your process for quality control?
• Can a year be held "open" while continuing to process the new year's taxes?

Human Resources

• Describe your company's commitment to the product and development plans over the next 3-5 years.
• Was your product originally developed by your organization?
• What major enhancements to your system have you planned for the next three years?
• Does the system track safety and worker's compensation information?
• Does the system include succession planning?
• Describe job and organizational hierarchy.
• What compensation management functions does the system support?
• Can the solution prohibit setting up an employee if a position does not appear as "vacant" in position control?
• Does the system support employees with multiple positions and departments?

Benefits

• Does the payroll system integrate with benefits?
• Can benefit plans be set up so only a specific group of employees are eligible for them?
• Can benefit cost changes be future dated for a future year within the current year?
• Are premiums automatically updated for age and salary benefit calculations?
• Are insurance amounts automatically adjusted when a salary increases?
• Can you automatically enroll a certain group of people in a benefit plan?
• Do Employee Benefit Statements include the company's cost of benefits?
• Do you offer online benefit enrollment?
• Does the system have the ability to handle calendar/fiscal benefit plans?
• Does the system calculate arrears on their benefits while on disability?
• Does the system include benefit premium reports?
• Does your system provide HIPAA reporting?
• What is the benefits enrollment process?
• Will benefit election changes update payroll deductions?

Compensation

• Are new hourly rates automatically calculated when salary increases are made?
• Can employee earnings be split between multiple departments on an on-going basis?
• Describe multiple compensation programs by employee type, geography, and other factors.
• What compensation management functions does the system support?
• What is the salary administration functionality or capability of your product?
• Can the mass increase be given to a specified subset of employees by location?
• Does the system provide an on-line view of the employee's total compensation package?

Customization

• Who has responsibility for maintaining customization changes?
• Will our customizations be overwritten in an upgrade?

History/Record Keeping

• Will the system maintain unlimited history for each employee?
• Are on-line help screens available for all screens and processes?
• Can corrections be made to historical, current, and future records?
• Can search definitions be stored?
• Can the system accommodate effective dating for future or past dates?
• Can the system process multiple transactions for an employee with the same effective date?
• Can the system store scanned documents or picture images?
• Can your system setup non-employees or those who are non-paid?
• Define the type of data available on your system for inactive employees.
• Describe how your solution supports workflow and electronic approvals.
• Describe HR/PR product's simulation/what-if capabilities provided with the package.
• Does the system have data archiving capabilities for inactive employees?
• Does the system provide flexibility in establishing organizational and payroll hierarchies?
• Does your system have the ability to roll back to a specific date in time?
• How long does the system maintain pay history for current and former customers?
• How many years of pay history can the employee readily access?

Application Security

• Describe the overall security scheme
• Is access to specific functions, files, and data elements restricted based on user profile or workstation ID?
• How can you prevent users from viewing and/or editing data at the field level?
• Can the administrative user control security or is it reliant on the vendor?
• How do you handle groups of users with the same security profile?
• Describe what happens when the system is accessed by someone without rights.
• What password authentication controls are utilized?

Reporting

• Does the system provide an integrated ad hoc report writing tool?
• Does the system allow generation of reports on all fields that exist in the data dictionary?
• Does the system provide flexibility for defining selection criteria, data ranges, sorting and grouping options, and report output, enabling users to tailor information to their specific needs?
• Does the system provide point-in-time reporting capabilities?
• Discuss how a non-technical user can obtain reports from the system without assistance.
• Does the system have the ability to handle consolidated reporting across companies/organizations?
• Does the system have the ability to product headcount reports using a user-defined FTE formula?
• Does the system provide standard report capabilities?
• Does the system provide the ability to schedule standard reports?
• Does the system provide the ability to set up and run batch reports?
• Explain how your system maintains OSHA logs. Describe the production of the OSHA log report.
• Does your system create dynamic organizational charts?
• Can EZQueries be saved "globally" as well as "personally" so that users are not inundated with a barrage of queries in the drop down list?
• Can the user sort reports by name, classification, gender, and ethnicity?
• Does the reporting tool have charting capabilities? Please explain.

Compliance Reporting

• Are standard reports available for OSHA and EEO requirements?
• Is there any special employee setup required to print government compliance reports?

TECHNICAL OVERVIEW

• Describe your corporate IT vision
• Describe the integration between your HR/ Payroll solutions and other systems and applications, such as ERP, recruiting or time and attendance. What types of interfaces are involved?

HOSTED SERVICES

• Who provides your Internet access? At what level is the service?
• Is site hosting internally or externally managed?
• Where is your data center or hosting facility located?
• Describe your software development lifecycle for ASP.
• Describe the data security/accessibility of your hosted services center. Do you utilize SSL technology?
• What is the migration process in upgrading to new versions and how does the upgrade process affect customization?
• What is the standard rule base for incoming/outgoing traffic enforced by the Firewall?
• What password authentication controls are utilized?
• What Virus detection/scanning mechanisms are in place?

SERVICE & SUPPORT

• What is your customer service model?
• How many payroll clients and individuals do you serve?
• What is your cpayroll ustomer retention rate?
• What is the average tenure of your payroll customers?
• Do you use your Web site as a mechanism to provide support to your clients?
• Describe your procedure for escalating support issues.

Implementation

• Does the system allow for the importing of initial payroll data?
• Please explain your project management implementation process.
• Please provide a sample payroll implementation project plan.

Training

• What types of payroll training do you offer customers?
• What training materials do you provide?
• What training options are available above and beyond basic payroll training?