Dont you just LOVE managing payroll?! Show of hands, please, who here just cant wait for that time of the month (or week) to calculate employee wages, PTO, taxes, benefits, and all those other super-fun things? What? No one? What a shock!
Seriously though, the shocking part of payroll is the ridiculous length of time small business owners and bookkeepers spend on payroll and federal employment tax compliance management. Just consider:one in three small businesses reportspending more than 80 hours the equivalent oftwo full weeks of work each year on federal taxes, including payroll (employment) taxes. In addition,11% of small business reportspendingover 10 hours a monthon payroll management. With numbers like these, it is no wonder employers and bookkeepers are pulling their hair when its time to manage payroll. After all, payroll is the last thing you want to deal with, but it is the first thing you should get right. Its a double edged sword!
And every small or medium business owner also knows that payroll is indispensable, just like human resources and time tracking. You just cant keep your business moving forward without payroll. On top of that, even the most dedicated and loyal employees want a steady paycheck so you really cant afford mistakes. Plus, the amount of time you need to dedicate to payroll is insane and thats putting it lightly. You need to invest time to calculate checks, properly manage withholdings, enter all the payment amounts picture perfect, and process direct deposit and checks yeah, that can take you the WHOLE pay period to complete. And complete properly, without mistakes. Yikes.
With all that time spent on payroll, you would think that payroll would be bulletproof and immune to mistakes but, unfortunately,payroll is very prone to mistakes. In fact, 33% of employers report making habitual payroll mistakes. The American Payroll Association shows an error rate of between 1-8% of total payroll in companies that use traditional timecards, and roughly 40% of small businesses incur an average of $845 a year in IRS penalties as a result of mismanaged payroll processes.
So what do we do? We turn to automation and increasingly sophisticated payroll and. The issue isnt lack of available, and often effective, payroll management applications but rather the challenge of picking the right one. In our research, we found over 200 different payroll software vendors, ranging from fresh new startups on the scene to familiar old faces like Kronos and (of course) Quickbooks.
Since you probably dont want to start sifting through the hay for your proverbial needle, we have done all the footwork for you. How? Thats easy!We asked small business owners and SME bookkeepers to tell us what payroll management software they use, and why.
After polling a small group of bookkeepers using a bookkeeping Facebook group, we came with the following criteria to compare the most used payroll software for small businesses.
If you cant see the infogram, please click here.
The prom queen of payroll software is QBOP (QuickBooks Online Payroll). QBOP is definitely the most popular when it comes to online payroll software solutions (especially in North America but is also coming along in Australia, New Zealand, and the United Kingdom). Its important to acknowledge that payroll systems are complex and rightfully so. That means that it takes time to learn how to use each one sowouldnt you want to know how to use the most popular one?
Its worth mentioning thatConnecteams time and attendanceintegrates with QBOP.
Track time and attendance with Connecteam, which integrates with QBOP and Quickbooks Online. Plus, with automatic live insights and analytics, youll always be on top of your employee time tracking.
Many bookkeepers may not be aware of the difference between QBOP and IOP. Were here to set the record straight.IOP is best for bookkeepers or payroll services companies that run payroll for many clients. It acts as a payroll center for all of a bookkeepers accounts manageable from one place and easily integrates with our Quickbooks and Intuit software. So, if you run accounting on QBOP then you can also run payroll on IOP and integrate between them.
In addition, another difference between QBOP and IOP is that IOP can beoffered as a white labeled solution. That means that your clients will not be aware that IOP is being used as your payroll backend and you can market it as your own payroll solution. That should get some of those wheels turning.
If you run many payroll accounts, its more affordable than QBOP
If youre looking for a solution that easily integrates with Quickbooks solutions
Nothing affects the length of time spent on payroll management like the application user experience. The word on the bookkeeping street is that Gusto is the most user friendly solution available on the market right now, which makes Gusto one of the front-runners in the category. This is one of the reasons we expect to see Gusto grow its share on the market.
Paychex is one of the most popular payroll software for small business but also one of the more expensive solutions, mostly due to public demand. Rumor around the accounting departments water cooler is that Paychex is robust but not simple, easy to use, or set up. That can be a huge factor for small business when theyre looking for the best payroll software. Paychecx requires a lot of personal information to get started and running reports comes with its share of red tape and added costs.
The solutions offered by ADP, and specifically their small-business oriented RUN, are very similar to those offered by above mentioned Paychex expensive but popular. This solution is for you if you prefer to send employees physical paychecks rather than direct deposit as ADP can (for an additional fee) print, sign and mail paychecks on your behalf.
Popularity on the market many accountants and bookkeepers are familiar with the interface
Automatic wage garnishments and other withholdings
One of the cheapest payroll solutions out there for small businesses, Sage Payroll. Now it may lack the bells and whistles that other payroll software have to offer, but for many businesses it is more than enough in terms of functionality. One of its main strength is security your payroll information in the cloud is fully encrypted, and user access permissions can be customized to ensure data security and integrity.
The jury is still out on SurePayrolls ability to faithfully serve theneeds of small businesses. While some claim it has a user-friendly and intuitive interface, others complain that the user experience is clunky and it takes a while before processes are properly streamlined.
In addition, some users are happy with the broad pre-defined set of fields and variables in the application database, and others despise the complex and long employee registration process. Were not telling you this to provide you a wishy washy review thats neither here nor there. Payroll software has to be flexible and SurePayroll demonstrates their ability to be flexible through their user experience, which is a sign of a good payroll solution.
If youre looking for thebest-rated service and support, you should really check out what Wagepoints offering. And since theyre Canadian, you can probably trust their claim to have the friendliest support and service staff around. In addition to clear and affordable pricing,Wagepoint offers a free trial periodto let you try before you buy so that you can see just how helpful and friendly these Canadians (and their software) are.
Heres the thing, Xero is not just payroll software, it offers a web-based accounting system designed for small and growing businesses. In addition to payroll management, it has robust asset management capabilities, offers approval levels, inventory tracking and so much more. Therefore if youre looking for an all-on-one small business accounting suite, this just might be it.
Like many other payroll software solutions PayCor is about much more than just payroll. It is a modular system that can be used for payroll alone, or use additional modules offered on the platform to manage all employee lifetimes within the company, from recruiting to departure. Did we already mention that flexibility is important to payroll software?
Payroll software is the first to enter the HR cycle in any business. Without payroll software, you cannot pay your workers or comply with tax laws without investing a great deal of time in paperwork. So its no wonder theres such a broad selection of payroll management and automation solutions out there theres something for everyone, and everyone needs something.
Usually, but not always, the person choosing the payroll solution will be a bookkeeper or an accountant because they are the ones charged with producing payroll that is bothcompliantandaccurate. Therefore, many will choose a payroll solution based on the accounting software they use because, well, its easy. But, thats not always a great idea.
Though it can be more complicated in the short run to choose payroll software that is different from your accounting software it could actually end up saving you time and money. Thats why shopping around is always a good idea, especially if you have your best interest at heart, and hey, why wouldnt you?
Now, on the odd chance that you want to run payroll but are not a bookkeeper or accountant then, once again, you need to consider a different set of criteria for your search. Simply remember to start by outlining what it is you hope to accomplish using this software. What are its must haves, and then use this article to make your choice. Bon chance mon ami.
Connecteam: one app to manage your employees & business
Connecteam is your tool to manage employee engagement, development, and relationship. You can streamline communication, give your employees a platform to be heard, boost engagement, strengthen the company culture, align employees with company policies, streamline daily operations, build professional skills and so much more.
Eyal leads marketing operations for Connecteam and is also an avid upcyclist (look it up) and semi-professional downhill hiker.
Tis the season to be jolly and beef up your workforce to maximize revenues and efficiency. But, obviously, theres a lot more to managing a contingent workforce than just hiring. So were here to share our tips for effective human resource management for the holiday season. Get ready to embrace your holiday shoppers, not get trampled 
Change. Its all around us. From the way we buy groceries to to the way we wake up in the morning or even the way we communicate with family members things are different. In business too. If youre a technophobe, all this talk of change has beads of sweat starting to appear on your forehead just one 
Building a business is hard. Growing a brand while managing day-to-day operations, keeping it profitable and still getting enough sleep? Thats nearly impossible for us mortals. Some businesses, like many consumer products, now come in something like a plug and play solution: a franchise. Is franchising for you? With rewards of plug-and-play, simplicity comes