As a small business, time is money.
So the more efficient your back office is, the more cash you can pocket for the important stuff.
There are tons of different apps out there to automate all sorts of different processes - even going so far as to be industry-specific.
Marketing apps like Hootsuite help you quickly schedule and post across your social media channels. Time-tracking apps like TSheets allow you to track your employees’ work time and bill specific jobs for your clients. Point-of-sale systems like Square make transactions quick and adding tips easy for accurate tax reporting.
Those all seem pretty intuitive - they solve specific problems for your business that you encounter every day. And quite a few of them integrate with each other to streamline your tech stack.
But something that normally slips under the rug is payroll.
Lots of startups and small businesses begin as a one-man show, so payroll isn’t at the forefront. But as soon as your first employee is hired, it suddenly becomes a necessary evil that’s hard to navigate.
Just like any of the apps above, there are automated payroll options out there that allow you to get everything squared away each pay period. And most importantly, they usually take care of the tax calculations and documents that you’ll need each quarter.
And you definitely don’t want to mess your taxes up.
If you do your payroll by hand - by manually calculating hours and pay, tax deductions, and more - that’s fine. But you could be shorting yourself of hours of work spent elsewhere every pay period.
In fact, according to the National Small Business Association 2018 taxation survey, running your own payroll can be costing you upwards of 80 hours of work time per year - and automating the process can cut that down by more than half.
But before you choose a payroll software, there are a few features to be on the lookout for.
1. Easy setup and customization
Most small business owners utilize back-office software because they’re in uncharted territory - meaning they aren’t experts in things like taxes, accounting, or payroll.
So finding a payroll system that’s easy to set up and customize is crucial. At its best, you should be able to figure out how it all works without the help of support. At its worst, you’re stuck making mistakes, paying your employees late, and worrying day and night about how your taxes will shake out.
And if you’re investing in a payroll solution, you should expect to be able to add and subtract employees or edit their information without going through some complicated process.
That seems intuitive, right? The ability to manage your company’s data and make adjustments when necessary should be #1 on your list when searching for a software solution of any kind.
2. Tax calculations and reporting
Any kind of payroll software should have tax calculations as a feature - that’s what you’re mainly paying for! You want a system that can take the gross pay for your employees and calculate what tax deductions need to be made - and paid to the right authorities.
If your system doesn’t do this, you’re basically doing everything by hand anyway. And again, taxes aren’t something you want to mess up.
You can go on to say that calculations aren’t enough - you should also be looking for something that takes those calculations and creates the reports you need every quarter and year. And even further than that, those tax reports and paystubs should be securely available to your employees when they need them - so you don’t have to collect and disburse them by hand.
3. Accessible support
If you’re handing the payroll reigns over to a software system, you’re likely not an expert - and that’s ok. It’s your job to be passionate and savvy in your business of choice, not be a wizard at all things back office.
That being said, payroll mistakes are a big no-no, so if something doesn’t look right you should be able to easily and quickly get a hold of someone who can help. Especially in the case of a technical glitch or malfunction in a time crunch, quality support from your payroll provider is key.
And of course, they should know what they’re talking about. Just as important as having technical support, your payroll’s support team should also house some Payroll Compliance Practioner (PCP) that really get it. They can handle any issues that arise in a way that’s still legal and tax compliant, relieving some of your worries.
4. Integrations with related software
Good payroll can stand alone, but if you’re incorporating a host of other cloud-based solutions for your business, then wouldn’t it be great if it all worked together?
Especially when it comes to accounting and time-keeping, having a payroll system that can communicate with other pieces of your back-office puzzle not only makes things easier on you, but also alleviates some of the risks of inconsistency.
In it’s best form, integrations should look like this:
Your employees clock in and out on your time-keeping software, which records all their regular and overtime hours for the pay period.
Then, your payroll software can “talk” to your time-keeping app, pulling those hours into payroll so you don’t have to manually enter each employee’s total hours. Your payroll system also goes ahead and deducts taxes and handles other payroll-related finances, like reimbursements or bonuses.
And finally, your accounting software can see all those expenses from payroll, and classify them accordingly as journal entries in your finances. That way, you get an accurate read of how much you’re paying for payroll, while keeping track of your tax totals.
In a matter of minutes, you’ve got everything synced up. By hand, this process can take hours as you manually search for, re-record, and update each and every hour and expense for each and every employee.
And most of the time, each piece of your tech stack is priced in a range that your small business can afford - which is another win for you.
What we suggest:
Payroll: Wagepoint - super-simple payroll for small businesses, backed by the world’s friendliest support team. Manage employee records, run payroll, and view reports in one dashboard for one all-inclusive price.
Timekeeping: TSheets - time-keeping made easy, including the ability to schedule employees and manage job costing for different clients. Also integrates seamlessly with Wagepoint payroll.
Accounting: QuickBooks Online or Xero - cloud accounting to manage cash flow, send client invoices, and see financial reports, all in one place. Also integrates seamlessly with Wagepoint payroll so you can account for your payroll expenses.
Most people aren’t payroll magicians. But screwing up something in payroll can cost you big time - with disgruntled employees and with the federal government.
Save yourself from payroll hell by doing what 21st-century business owners do best: make technology work for you.
By Erika Yohn, Marketing Specialist for Wagepoint
Bio: Erika is a savvy Millenial on Wagepoint's marketing team. Now a retired soccer player, she spends a lot of time browsing Twitter to stay updated on the current trends - especially when it comes to memes. With a hand in all things marketing, she likes to keep things fun and useful for Wagepoint's customers.
Company bio: Wagepoint is simple, fast, and friendly online payroll software, built just for small businesses and startups. Available across all of North America, Wagepoint can handle direct deposits, federal, state and local tax reporting / CRA remittances, W-2s/1099s / T4s for your hourly and salaried employees or contractors. It's the perfect solution for companies looking to pay their employees and keep compliant with the government!