The only thing more conventional than "keeping the books" is screwing them up. In fact, the two typically go hand-in-hand, as the IRS penalizes about one out of every three business owners for payroll errors. Choosing the best payroll service for your needs can help you to reduce bookkeeping and other errors.

Even if mistakes weren't so commonplace, doing your own payroll can still cost you. The valuable time and energy you spend figuring out how much money you have to give away could be spent actually making money.  That's why so many businesses are turning to outsourced payroll services.

"One of my rules is if you have one employee, get a payroll service," says Rhonda Abrams, president of the business services site The Planning Shop and author of the guidebook Hire Your First Employee. "The penalties for screwing up are so much more expensive than the cost for payroll."

A good payroll service will, at the very least, get checks to both the IRS and your employees on time, taking most of the weight off your shoulders -- but not all of it. The paychecks themselves may be out of your hands, but this is still sensitive information that's immensely important to your company, so it's critical that you pick the right service for your small business.

This guide will help you ask the right questions so you'll know which service to choose.

Editor's Note: Looking for Payroll Services for your company? If you would like information to help you choose the one that's right for you, use the questionnaire below to have our partner, BuyerZone, provide you with information for free:

How to Choose a Payroll Service: Where to Look

A simple Google search of "payroll service" yields about 485,000 results, and with so many options to choose from, narrowing down those results can be just as difficult as crunching numbers yourself.

Adam Spiegel, a certified public accountant and partner with Morrison, Brown, Argiz & Farra LLP, says getting a referral from someone you trust is the smart way to start your search. "You've got to discuss what you're doing with a controller, a CFO, an outside CPA or an attorney who can advise you," he says.

You might also try getting references from other similar businesses in your area. Pat Carson, founder of the San Jose-based bookkeeping and accounting firm Carson & Crew, says, "There will be folks who absolutely love the service they have and would be very willing to recommend people."

The larger services Carson suggests are Intuit Online Payroll, ADP and Paychex, but, she warns, it's important to realize that some large services may try to bundle your payroll package with additional services that you might not need, like human resources capabilities. This could drive up your monthly costs.

To make sure you're not getting over-served, Carson suggests mapping out a list of services you expect your company will use over the course of a year. Ask yourself questions like how much you plan on growing, how many full-time, part-time and contract employees you'll have on your payroll throughout the year, and if anyone is due for a raise or bonus. Decide whether or not you'll need a company that can handle different state and federal taxes. Do you need human resources services in addition to payroll? How much can you afford to pay the service? Will you be offering employees 401(k)s and other deductions? How often do you want to issue paychecks?

"You always want to consider the features that you particularly need," Abrams says. "You want to make sure it can handle the different kinds of employees you have."

This rule applies especially if there is something unusual about your business. Perhaps you have union workers in your company. Make sure you go with a service that has dealt with union rules before. If you run a restaurant, where servers receive tips, your payroll service needs to know how to file taxes accordingly. As you narrow down your options, look through client lists. Sometimes it's crucial that a service is familiar with your line of work.

If these questions have helped narrow down your options, Spiegel recommends doing an online comment search or looking through consumer reports like Dun & Bradstreet to make sure there aren't a slew of grievances floating around about the company you're considering.

Dig Deeper: The Case for Outsourced Bookkeeping

How to Choose a Payroll Service: Services and Pricing

Now that you've narrowed down your referrals and checked out their online reputations, you need to make sure that the company offers all the services you need upfront.

"There's three things that payroll should do for you," says Ken Darrow, editor of Payroll for Dummies, and group marketing manager at Intuit Payroll. "It pays employees on time, it pays your payroll taxes on time, and it actually files your payroll tax forms on time. You want to do all three of those to be compliant with the law, and you also better do the last two or you'll get fined."

Revisit that list you made of all the services you'll need this year. Some of the basic add-ons you'll want could include W-2 forms, which may or may not come at an additional cost to you, direct deposit, online pay stubs, and online time tracking that enables you to log employee hours to the exact second they sign on and off of the server.

You also want to know whether or not the service offers a web platform that ensures the data you enter into the system is the data that actually gets processed. Sometimes, payroll services will reenter the data you submit, which, like a game of telephone, introduces a new possibility for human error. Abrams notes that after her own business switched from a traditional pay service to one with an online platform, she was able to save about $1,000 a year in time and penalties.

Though pricing varies by service and number of employees, you need to make sure you know whether you're being charged by the month or by the pay period. Carson says you also shouldn't fall for payroll packages that force you to pay up to $350 a month. Some basic packages, like Intuit Online Payroll, sell for as little as $39 a month. Do make sure the offerings meet your list of needs, but don't be fooled into buying more than you need just so the payroll service can make some extra money.

"If there's insistence by the sales person that you're required to take these additional services bundled with payroll," Carson warns, "that should be a clue that there's something else going on."

Another way these services make money is by impounding your taxes at the time of payroll, accruing interest on your money until they file the taxes. "Taxes have to be sent to the IRS on a certain schedule," Darrow says. "What a typical big company will do is they'll take that money right when you do payroll, but you don't actually owe it to the federal government for perhaps five weeks, so they're sitting on your money, and you have a cash-flow problem."

Make sure you know whether or not your taxes will be impounded with your payroll. Carson says, "It's not a deal-breaker if they impound the taxes, but it's a benefit if they do not."

Dig Deeper: ADP's Accountant Service

How to Choose a Payroll Service: Questions to Ask

Spiegel recommends interviewing at least your top two or three payroll options before you choose. The following is a list of questions you should use as a basic checklist for those interviews:

•    How fast is turnaround?
•    If the service makes a mistake, who is liable for those mistakes?
•    How long does it take to fix a mistake?
•    Are there additional charges for adding or changing employee payroll?
•    Will the annual fees change or increase after one year?
•    How often will you receive reports from the service?
•    Do they offer retirement plans?
•    Can they integrate with your accounting software?
•    What back-office technology does the service use?
•    What are the hours and means of customer service availability?
•    Will you be assigned a rep or will you always be directed to someone new?
•    Is there an additional cost to file taxes in multiple states?
•    If data is re-entered, will I be able to review it before it goes through to payroll?
•    How often will I hear from you?

Dig Deeper: Outsourcing HR

How to Choose a Payroll Service: Take It for a Test Drive

Even the smartest questions can yield some not-so-truthful answers, so it's best to ask the service if you can talk to some of their clients. If and when you do, ask those clients about responsiveness, accuracy and how this service compares to others they've used in the past.

"If you're not using a national service, you want assurances that this local company has taken care of things," Carson says.

She also recommends calling the customer service department to see who you get on the other line. "Sometimes, when you're dealing with a national service, you get service that's as smart as the person on the other end of the phone," she says. "Sometimes that's a clerical person reading a script."

You should definitely get a price quote that includes fees for all of the services you mapped out. Get a quote for this year and next so if rates do change over time you'll know whether or not the service will stay within your budget.

Spiegel suggests looking over a copy of one of the company's reports. "Are they easy to understand or overly complicated?" he asks, noting that sensitive information like this needs to be relayed to you in language you can fully comprehend.

Likewise for any software or web platforms you'll have to use. Make sure it's a user-friendly interface that, if necessary, your employees will be able to access as quickly and efficiently as you can.

Dig Deeper: There's No Substitute for Great Customer Service

How to Choose a Payroll Service: Once You Choose

When you sign a contract with a payroll service, Spiegel says you need to know what will be required of you, as well.

Have organized files ready with employee names, addresses, wages and any other deductions they're eligible for. For direct deposit, you'll need voided checks from your employees, and your staff may also have to fill out new W-4 forms, available here.

You should set a schedule determining when you will check in with the service and how often you'll get their reports. Keep an eye on your bank account and make sure there aren't any drastic changes once the payroll service picks up. Darrow says some businesses even continue running their old payroll systems for the first few pay cycles to make sure the numbers match up.

Finally, if it turns out your service is not meeting your expectations, the best time to switch, according to Darrow, is either at the beginning of the year when your pay cycle starts with a clean state or at the end of every quarter when your quarterly reports are already in order from your last payroll service.