The Ultimate Guide to Payroll Software for Small Business
A lot of small businesses are run by someone who has never had to take care of payroll before in their lives. If you’re one of those people, then you’re probably very confused about how to go about it and what the best ways are to do it. The good news is that there are actually a lot of options out there that make the process much simpler, so you don’t have to worry about making mistakes or getting it wrong and ending up with a bunch of unpaid employees on your hands, which can lead to all sorts of trouble down the road.
What is a payroll service?
Guide to Payroll Software for Small Business
A payroll service is a group of accountants and/or bookkeepers who’ve agreed to do your payroll as a service. This is an especially good idea if you have too many clients to juggle all your accounting yourself, but not enough revenue yet to make it worth hiring someone full-time. A lot of small businesses start off with a bookkeeper doing their own payroll, but when their company grows, they’ll often hire someone else (either a part-time or full-time employee) and use payroll software. This lets them keep track of time worked without having to worry about running reports on each person’s hours themselves. You can also add employees in as you grow and need more hands-on deck.
Which are the most common options?
There are several payroll software options out there, with various features and price points. Here are some of your most common options: (1) web-based software, which is always accessible anywhere you have an internet connection; (2) desktop-based software that may require downloading but doesn’t require a browser; and (3) mobile apps that allow you to handle small business payroll on your phone or tablet.
What should you look out for when choosing payroll software?
Guide to Payroll Software for Small Business
Small businesses often outsource payroll services and software; if you don’t have in-house expertise, consider using third-party payroll. However, it’s important that you carefully evaluate what you’re signing up for before making a commitment. Make sure you’re comfortable with how often support is offered, how user-friendly your system is, and whether your needs will grow over time. These are just a few of many considerations that can make or break your experience with small business payroll software so choose wisely!
How much does it cost?
The costs vary, but typically range from around $50 - $300/month, depending on features and subscriptions. If you're just starting out and don't have employees yet, there may be free alternatives available. Our #1 recommended software for small businesses is Gusto (formerly ZenPayroll). They offer a free payroll service with direct deposit. Additionally, they offer both an online platform and a mobile app. Their plan starts at $39/month per employee ($29 if paid annually) which includes all of your payroll needs including tax filing, W-2s, and 1099s.
Who can help you choose the right one?
Guide to Payroll Software for Small Business
One great question you should ask is, Who can help me choose a payroll solution? Don't just get advice from people in your business who might have their own agenda. Instead, find an accountant or bookkeeper with experience in payroll solutions and tax preparation. They'll be able to recommend something that fits your budget and your needs. Someone who specializes in accounting will be more likely to look at an overall picture of your situation rather than what's easiest for them; they're probably better equipped to advise you on how a piece of software will fit into both short-term and long-term plans. And, since they work with clients who have payroll needs similar to yours, they'll understand where you're coming from when it comes time to implement it.
Getting started with payroll automation
While many businesses can do without it, payroll is a standard feature of most offices. For a small business owner, it’s easy to get bogged down in all of your day-to-day tasks and forget about payroll—until one day when you realize you need an automated system (i.e., payroll software) in place to handle these tasks more efficiently and accurately. The good news is that nowadays you don’t have to spend too much money or resources on getting started with automation: A fully featured system like Gusto could be available at a cost as low as $15 per month or less.
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