How to Choose payroll service blog post

Whenever I mention payroll to business owners I see the telltale signs of them “checking out” mentally, and it’s not surprising!  With terms like FICA, Workers Comp, Unemployment and ObamaCare, it’s no wonder small businesses are confused and sometimes just downright disgusted by it.  In fact, we often tell clients that if they get one thing right in running their business, make sure you hire a competent payroll service!

We want to help you understand how to make the right choice in choosing a payroll service.  So let’s get into it!

Taxes

Penalties on payroll tax errors are some of the most stringent that the IRS will shell out.  So you need to get this right!  Payroll companies will work payroll taxes in one of two ways: impounding and you paying the taxes yourself.

Impounding means that the payroll company takes the taxes from your account, holds on to them, and then pays them on time to the IRS and state agencies.  Sure, they make money on holding onto your funds, but they also take full responsibility for making the payments on time.

Some providers make it pretty easy to pay the taxes yourself via ACH and electronic payments.  However, it’s up to you to press “Submit” and make them on time.

The Verdict:

Use payroll services that impound.  It’s easier to manage cash flow because the taxes are taken out right when you run payroll and the payroll company assumes the responsibility to make the payments on time.

Direct Deposit and Checks

This may seem like a pretty basic thing but did you know that you can save yourself some time and costs by ONLY offering direct deposit?  Direct Deposit is a great way to pay your employees because they get paid right into the accounts.  Checks can be used, but they also create a headache when it comes time to reconcile your bank account.  Payroll companies also charge to push that paper around.  Have employees that don’t have a bank account?  Give them a “Pay Card’ that has it’s own routing and account number and you can “load” it with their pay each pay period.

The Verdict:

Use a payroll service that focuses on direct deposit and you will most likely save money on monthly service fees, postage and mailing, and time when reconciling your bank account.

Integration with Other Apps

Do you use accounting or online scheduling software like Xero or Deputy?  Use a service that ingrates with them to eliminate data entry and make running payroll, easy.  If using online scheduling, within a few clicks you can approve timesheets and send them straight to payroll.  This alone can save you hours each pay period.

The Verdict:

Search out payroll services that are open that integrate with other apps that you use.  Who knows, you may even discover an app you can use for your business this way!

Advanced HR Features

Some businesses have 1-5 employees, some have 50.  And depending on how many you have, will determine how much help you’ll need managing them.

If you have a large staff to manage, payroll companies like ADP have robust services beyond just running payroll that offers on-site HR reps that can come out “do your dirty work” for you, a.k.a.hire and fire.  They can also help you navigate the tricky waters of the ACA (ObamaCare) and provide employee handbooks, amongst other things.

If only a few employees, then a company like Gusto is often a good choice.  While they don’t provide robust HR services, they can offer very competitive rates on Workers Comp insurance, and make managing your employees pretty easy.

The Verdict:

Make a choice based on your payroll needs and employee size.

Pricing and Cost

This is what it boils down to right?  There are two methods that payroll services use to charge their fees: a flat fee per month, or fee per pay period.

Flat fee per month gives you a predictable cost each month.  Generally, there is a base cost and then a per-employee-per-month cost.  So as long as you know how many employees you’re paying, your fee is pretty predictable.  And, these companies don’t charge for anything extra like W-2’s and quarterly reports, as long as you are a subscriber.

Per-pay-period providers charge each time your run a payroll.  For most businesses, this is twice per month.  They will also charge additional fees for W-2’s and quarterly reports.  There are also other charges for mailing checks, etc., so make sure you have the payroll service spell our EVERY thing that is going to cost before you sign up.

The Verdict:

Use a service provider that charges a flat fee per month.  There is less confusion on fees and it’s generally cheaper each month.

Make it Happen!

As you can see, there’re lots to consider when choosing the right payroll service provider for you.  We can help you make that choice and get you in touch with the people to make things happen.   Have questions, leave a comment or reach out to us on our Get In Touch page and we’ll be happy to help you make the best decision for you and your business.

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Having the ability to process your accounting, payroll, CRM, etc., on any computer (PC or Mac) is all within reach now for any business starting out.  And since we’ve helped many businesses setup cloud-based processes, naturally we’ve done a lot of trial and error on what applications work.  These are many out there, but we’ve narrowed it down to our top 5 favorites for most small businesses.

1.  Google Mail (Gmail):  Since email is the center of most business, we figured that it should be #1!  Google mail, aka “Gmail”, has been the go-to mail app for a lot people.  And rightfully so.  It’s spam filters are superb, and you can customize it how you like to read/process emails.  Google even offers a business class version called Google Apps.  And while this version is not free, it offers no advertising and increased storage amounts.  The learning curve is very short.  Some of our favorite features:

  • Gmail is FREE (Google Apps is $60 per user per year)
  • Excellent spam filters
  • Good mobile app
  • Free access to Calendar
  • Free access to Google Drive (cloud file storage)
  • Free access to Docs, Sheets, and Slides (Google’s equivalent to Microsoft’s Word, Excel, and PowerPoint)

 

2.  Google Calendar:  A sister app to Gmail (above), let’s you keep track of your schedule using a number of tools.  Integration between Gmail and Calendar is tight, and has a host of solutions to run many types of businesses.  Some of our favorite features:

  • Meetings are easy to setup and invite attendees
  • Visibility into who has accepted/not accepted meetings
  • Can schedule recurring calendar events (i.e. once per month, week, every 2 weeks, etc.)
  • Can create calendar events directly from an email in Gmail
  • Can create and share different calendars for different purposes (i.e. calendar for each team member, company wide vacation calendar, personal calendars, etc.)

 

3. Xero Accounting Software: Designed to give the small business what they need within a few clicks, is our top choice.  With solid functions like invoicing, bills, quotes, and real-time bank feeds, you can manage your business from your computer, iPad, or any iOS or Android device.  One of the things we love about Xero is it’s add on ecosystem.  Want to see if your client paid you, from your CRM?  You can do it with their add on’s.  You can build out really smooth business processes this way.  We really like:

  • Online invoicing
  • Connect to payment services like PayPal and Stripe
  • Customer/Vendor Management
  • Bank transactions directly imported from bank
  • ascetically pleasing and just looks good
  • Reports exportable to PDF, Excel, and Google Sheets
  • Easy to collaborate with your accountant or other people

 

4.  Gusto (formerly ZenPayroll):  Designed for just one person, or scales up to several employees, this payroll has direct integration to Xero and QuickBooks Online.  With it’s great feature list, and straightforward pricing, it’s hard to beat.  Here’s a few of it’s valuable features:

  • Direct Deposit
  • Employee self on-boarding
  • Simple and easy to use interface
  • Full service payroll – they process all the payments and file all the returns for you
  • Can pay contractors along side employees
  • Integration with Worker’s Comp Insurance and soon, Health Benefits
  • Integration with Xero

 

5. Evernote: We’ve come to use Evernote every day here at the firm.  Mainly because we can access it from any device we’re on.  No matter where we are, we can get to our notes!  Evernote is great for just jotting down a simple note, or connecting to other services like Uber Conference to keep track of phone calls, meetings, you name it.  You can build out folder and tag structure, or just starting taking notes that are searchable.  Some of the best features are:

  • On any device (windows, mac, android, iOS)
  • Can create any type of note (meeting, to-do list, etc.)
  • Can set due dates for notes (great for to-do lists)
  • Can add attachments like PDF’s
  • Can email a note directly into Evernote
  • Can share and chat about notes, directly from within Evernote

 

Believe me, we could go on and on about other apps and the great things they can do.  But for any one looking to start, or run their existing business more efficiently, these apps are more than adequate to get you started.  We love talking to folks to help them make their business run smoother and get you back to doing what you love.  So feel free to leave us a comment, or give us a ring if you if we can help.

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