Choosing a Payroll Service
Holy smokes – it’s payroll tomorrow! Do you have all your data compiled? Did Sara use one or two sick days this month? It never fails. One of the most important tasks an employer has is often something we don’t keep up with on a day-to-day basis. But if there’s anything you need to get right, it’s paying your employees.
Business administration can often be a hurdle that many small and midsize business owners grapple with. Setting up shop to pursue your passion may be your dream, but there’s a lot of paperwork that needs to happen in the background to keep that dream going. And once you start to bring on an employee or two, that paperwork can sometimes lead you away from furthering your dream and spending more time crunching the numbers. So, where’s the happy medium to keep your dream alive and your employees satisfied?
Consider using a payroll service. Even small companies with as few as five employees can benefit from such a service.
What Can a Payroll Service Offer?
- Dependability – employees know they will get paid on time. There’s no greater morale killer than not paying your people what they’re due in a timely manner. It sows discontent. More importantly, it’s a reflection of how you value your employees. Whatever you do, don’t mess with people’s paychecks.
- Easy Onboarding – electronically handle and archive new employee paperwork. A payroll service will have the most recent copies of all federal and state forms necessary and keep them on file.
- Employees’ Access to Data – no more asking your office administrator to dig up your paystubs; with online access, your employees can generate payroll details without any outside assistance. Most offer a personal online portal so employees can reference all their payroll data at will.
- Compliance – using a professional service ensures that all taxes and quarterly tax filings are administered correctly and on time. First: Don’t mess with people’s paychecks. Second: Don’t mess with the IRS.
- End of Year Reporting – all W2 forms (for employees) and 1099 forms (for contractors) are generated and distributed more or less automatically.
Different Types of Payroll Services
Think about what you need.
- Timekeeping/Tracking Service – Are you paying people a regular salary, or will you need a service to track employee time? Absenteeism, tardiness and personal time off will all need to be reported correctly each pay period.
- Tax Services – Each paycheck includes deductions for federal and sometimes state and local taxes. A professional service will assume the responsibility for making tax deposits on your behalf as well as file all forms for compliance. And at the end of the year, W2 and 1099 forms will need to be distributed.
- Paycheck Services – Will you need paper checks generated or will you pay strictly via direct deposit?
Most small businesses start out doing payroll using popular accounting software, such as Quickbooks. Even though it does include a modest payroll module, QuickBooks still requires a fair amount of user time to process timesheets, manage payroll and keep up with regulatory filings. When you’ve outgrown the do-it-yourself approach, there are a variety of options to choose from when looking for a payroll service. Larger companies such as ADP or Paychex have broader name recognition and multi-tiered offerings along with dedicated account specialists to help support businesses using their various lines of payroll and benefits. They are considered full-service, but those services can come with a hefty price tag.
If all that seems more than you need, a host of smaller companies with that “just the right size” feel offer great alternatives at a fraction of the cost. One such company is Gusto, a cloud-based payroll and employee management service. With Gusto, employers are able to quickly and easily enter in data for the payroll period. Deductions are automatically made for benefits such as insurance programs or 401k investments. Employees are paid on time, usually via direct deposit with notifications sent to the employee when payroll is processed and paid. Gusto also offers an online portal that allows employees to see paystubs, check on their 401k balance, and see how much PTO they have earned. Requests to use PTO are done through the portal, generating a formal request to the company manager that is processed seamlessly in the system for the next payroll. In essence, Gusto has all the bells and whistles without the fuss. Another nice little perk for company management, Gusto also offers the ability to conduct monthly surveys of your employees to assess the morale and mood of your team.
No matter which payroll service you choose, make sure they offer reliable customer support. Even the most intuitive programs run into trouble from time to time, so it is critical to establish a direct line between you and your service provider so that you can get customized support fast.
Benefits of Using a Payroll Service
- Save Time – Free up your staff to do other high-level tasks.
- Save Money – By outsourcing, you’re not paying the salary of additional administrative personnel.
- Ensure Compliance – Professional services will stay on top of the most current tax laws and regulations to keep you in compliance.
You likely didn’t get into business to get mired in payroll functions. There are lots of options out there, and many of them are probably much more affordable that what you might think. Similarly, your growing business might not have the bandwidth to handle your next marketing effort, or you may be unsure about where to go. We can’t help with payroll, but Mad Hat Maven can help you with your next creative project. Contact us today to see how we can help you.
