Running a small business includes so many tasks. From marketing to manufacturing to customer service, it can be easy to let payroll get lost in the shuffle. Thankfully, things have changed quite a bit from those paper ledgers and handwritten checks of the 70’s.
First, it’s important to understand the benefits of adopting a new system. While automation can sometimes be accused of lacking personalization and being unresponsive to change, nothing could be further from the truth. In fact, today’s payroll automation tools are super-intuitive, meaning they can grow easily when your company thrives, making sure payments are accurate, timely, and in compliance with federal, state, and local tax laws.
There is also an awesome cost-savings benefit. The American Payroll Association estimates an 80% cost benefit to switching to automation. As soon as you have enough employees that you can’t easily state how much they get paid – and how many hours a week they are working – moving to more innovative payment solutions is advised. Because many of today’s solutions also allow your workers to input their own data, make changes to payment methods, and keep tax-related paperwork up-to-date, it can reduce your HR department’s workload significantly.
See what these top automated payroll tools can do for your team!
Owned by Intuit (the same folks behind Mint and TurboTax), this trusted brand in all things financial has a robust payroll feature that makes it easy for even newbie accountants to implement. Because QuickBooks is poised to serve businesses of all sizes, they offer more than just one solution. You’ll want to research their products a bit to see which one best fits your needs. If you are a DIY-fan, their smaller tools should suffice; companies with a full-time accountant on staff can look into the pricier options that track compliance in some areas.
2. Sage Accounting (Peachtree)
One of the very first major competitors to QuickBooks, this company specializes in making tax filings and automation a breeze. Like the other company, Sage has a variety of solutions for small, mid, and large businesses. Even start-ups with fewer than 20 employees will find their payment services efficient and easy to use. Especially nimble companies may even find their cloud-based solutions to be a good fit for handling payroll wherever you have an internet connection. Businesses in the real estate and construction fields may also want to check out their full-spectrum business management suites – which, of course, include payroll.
Many of us got our first paper paychecks with the letters “ADP” on them, but now – you’re the boss! ADP has evolved quite a bit over the years, offering so many adaptive solutions for payrolls of all sizes. Their best features are also available online, so that you can track employee time, make payroll adjustments, view benefit payments, and more, from your mobile device. ADP also integrates with your favorite accounting program, so you don’ have to change what you’re already doing to pay employees with direct deposit, VISA cards, or paper checks.
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This is a direct competitor to ADP and another big name in the payroll industry. Like many of these companies, you can choose to implement payroll from the first day you start your business – even with just one employee. Track time on your own, inputting data as you can, or have them do it for you. Paychex still prides itself on being a full-service accounting and payroll company, if you find that you need these features.
For companies that are looking for a more one-and-done, cloud-based solution, Gusto may be the perfect pick. With a low monthly service price ($39), plus $6 per person each month, its cost is directly tied into your company size. You can handle unlimited payrolls, issue unlimited checks, and offer direct deposit for employees in all 50 states. Its interface is easy to use and very intuitive, so even those who don’t have any accounting experience can be up and running the same day. Additional features, such as benefits tracking and worker’s compensation calculations, are available for an additional charge.
Most business owners are familiar with the Square point-of-sale tool, but did you know that they also offer payroll services? If you already use the Square POS screens, it’s incredibly easy to use the same screens as your employee time clocks, so tracking hours is a cinch. Even if you aren’t a Square POS customer, however, their payroll services are uniquely priced. Employee payroll can be done for $29 a month (plus $5 per employee), but they also offer independent contractor services. Paying your freelancers each month will cost you just $5 per month per contractor – with no monthly fee. Compliance with all state and federal laws come standard at this price, including calculation and payment of sick leave and all tax filings!
As companies continue to evolve, you may see fewer options on our list. That’s because many of the more popular payroll services of the past have been acquired by, the bigger brands. SurePayroll, for example, was bought out by Paychex, and we can expect many of the new, smaller players that pop up to be absorbed by the larger players in the near future. If you find a smaller start-up that you like, you’ll probably get to keep using them, but expect that they may go up in price, or could offer additional features as they try to stay competitive in today’s amazingly aggressive small business landscape.
Business owners are too busy to have to deal with the headaches of payroll. Whether you choose a cloud-based DIY option or pursue the benefits of a full-service, done-for-you payroll provider, know that today’s companies are poised to keep track of all the moving parts of compliance. Rather than try to keep on top of all the law changes, state variances, and new court rulings affecting independent contractor partnerships, get help from these affordable payroll providers. Your time will be best spent doing other things.
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What is the #1 Benefit of Automating Payroll?
Automating payroll offers multiple benefits, though two that may stand out for many small business owners is that it:
Reduces the chances of human errors caused by manual calculations. Payroll software (even basic payroll software) allows you to process payroll through a computer rather than rely on error-prone math done by you or your human resource employees. It cuts out the need to painstakingly calculate payroll taxes and withholdings, handle time tracking, and manage other payroll data with manual work. This can help save both time and money, as you may not need to spend as much time correcting errors down the road.
Increases efficiency by cutting down on time-consuming manual processes in your payroll management operations. Automating payroll saves both you and your employees time. You no longer need to keep track of timesheets and other tedious spreadsheets. And your employees no longer need to manage time cards, and can focus instead on their jobs.
Will Payroll Automation Solutions Help My Business Get Financing?
While lenders may not specifically check to see if you have payroll automation, online payroll, or automated payroll reports in place, there are a few indirect benefits of implementing it when it comes to getting financing.
First, automating your payroll processes can contribute to reduced expenses and increased profits. As mentioned above, this technology can cut down on unnecessary costs and increase productivity. These elements can make your balance sheet and income statement look stronger, which can help lenders view your business more favorably.
Second, in the event you have the chance to explain how your business operates to a potential lender, the ability to say you’re using payroll solutions may help your business look more modern. In an era where operations are increasingly run through computers, running payroll and other workflows with automation can be seen as a plus.
What Other Accounting Software Do I Need For My Business?
There’s no shortage of user-friendly digital accounting, bookkeeping solutions, and other HR software for your small business needs. Whether it’s health insurance, employee information, tax forms (local or federal taxes) and tax calculations, reimbursements, workforce management, employee portals, data entry, benefits administration, or other HR solutions, there’s a good chance there’s software that addresses the issue.
One easy way to find out what’s available to your business is to use Nav. Create an account to easily compare the best payroll software and other accounting solutions on the market.
While you’re here, we’ll also help you find the best small business loans, business credit cards, and business bank accounts you’re most likely to qualify for. Plus, we’ll walk you through how to build your business credit scores so you can improve your financing options fast.
This article was originally written on September 6, 2018 and updated on September 7, 2022.
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