Managing payroll can be a daunting responsibility for small businesses. From reminding employees to submit their timesheets and reimbursements to making sure everything is entered into the system correctly, processing payroll can be time consuming. And when you think you’re done, it seems like it’s already time to tackle the next pay period. But working with a payroll service to automate some of these functions can put a stop to the payroll grind and make the task relatively easy – even for first-time entrepreneurs. There are plenty of options to choose from, including online software and cloud-based systems. How do you determine what works for your business?
You first have to realize that payroll is more than just issuing employee checks. A good payroll service also handles complex tax withholding across multiple jurisdictions and can help keep you in compliance with tax and reporting laws.
Considering the time involved with handling the job yourself and the large fines you could face for regulatory violations, a nimble payroll service may be one of your most important business investments.
Here are four key qualities to keep in mind when shopping for a payroll service.
Reliability. You need your payroll to be processed accurately and on time. This means looking for a service with a proven track record. Check reviews and get referrals from other small businesses as you consider which system to use.
For reduced errors and faster processing, many online providers automatically file and pay all payroll taxes, report new hires to the government, and process W-2s and 1099s. Make sure you can easily check your records and payments.
One of the advantages of a cloud-based payroll service is the ability to access information and financial records any time you need them – enabling you to handle payroll tasks from virtually anywhere.
Internet-based systems need to be technologically dependable as well, and any vendor should follow best practices and regulations regarding data safety and cybersecurity.
Versatility. Are your employees paying into a 401(k) plan, a profit-sharing program, or health savings accounts? Are they racking up overtime pay or earning bonuses? Your payroll system needs to be able to handle multiple transactions vital to your business and employees. Make sure the system you choose is up to the task.
Before selecting a service, consider how flexible you need your payroll to be in terms of scheduling, disbursement methods, contractor payments, handling paid time off, calculating wages, and other details. Another feature to look for is direct-deposit. More than 80 percent of U.S. workers were paid via direct deposit as of last year. The process is safe and reliable for them, and makes record keeping easier for you — no worries about forgetting to record checks or about employees losing them.
Even if you don’t use many bells and whistles now, as your company and workforce expand, you’ll be better served by a payroll system that can grow with you and handle any of your requirements.
Simplicity. If your payroll service is clunky and complicated, the savings in time and money you were looking for might be replaced with frustration. Your payroll system should be user-friendly – from intuitive navigation to ease in finding and updating important information.
In addition, easy-to-reach, knowledgeable human support should be available and ready to help you with any questions, technical problems, or other issues that may arise.
Compatibility. Avoid creating headaches by tethering your company to a payroll system that doesn’t work well with others. Check to see whether a potential provider is compatible with your accounting, HR, time tracking, and scheduling software. Good integration can make administrative tasks run more smoothly, freeing you to focus on the reasons you started your business in the first place.
The ability to reconcile your payroll, ledger, and bank statements on a regular basis will provide you with a better financial picture, and can also allow you to easily generate reports on employees, sales, and other data that can provide helpful business insights.
Could your company use experts to help you reconcile your books, track spending and payments, and manage payroll? BKE specializes in bookkeeping for small businesses, and works with other cloud-based tools, including payroll providers Gusto and ADP RUN. Contact us and we’ll review your books for free.