PPP Loans and Payroll Software: What You Need To Know 0
The COVID-19 pandemic has forced many small and mid-sized companies to completely change the way they operate. Some companies have had to let staff members go, while others have had to enforce a full shutdown.
Either way, companies are hurting right now. Customers aren’t shopping the way they used to and businesses aren’t making the amount of money necessary to maintain daily operation. If that’s not enough, this all has a negative effect on the economy we all rely on.
The government has taken notice and is providing a variety of funding options for small and mid-sized businesses. One of those options, the Paycheck Protection Program (PPP), is included in the CARES Act and is designed to keep employees on payroll throughout these difficult times.
For companies with 500 employees or fewer, the PPP allows you access to the Small Business Association (SBA) loans. Not only does this give you the funds needed to keep employees on the payroll, but it allows you to bring back those you were forced to let go.
The great thing about this program is the potential loan forgiveness or repayment deferral if certain requirements are met. When used to its full advantage, it could be the program that saves your business from going under.
A Brief Look at the PPP Loan
Since the PPP loan is still new to most business owners, there’s a lot of confusion about what it is exactly, who’s eligible, how to apply, and what the benefits are. Don’t worry, we’re going to break it all down for you below so there’s no guesswork involved.
First off, let’s talk about eligibility.
We mentioned how it’s available to businesses with 500 or less employees, but those businesses must be classified as one of the following: Accommodation or Food Services, Tribal businesses, independently-owned franchise, self-employed workers, independent contractors, gig workers, and sole proprietors.
In addition to that, you need to be able to prove that your business has been significantly impacted by the COVID-19 pandemic.
Now, let’s talk about loan forgiveness.
In order for the PPP loan forgiveness to work, it’s imperative your business keeps all full-time equivalent employees on payroll for 24 weeks following the loan acceptance -- or the end of the year, whichever comes first.
In addition to that, businesses must use at least 60% of the loan for payroll expenses and no more than 40% for other expenses (rent, utilities, etc.). Your business can only count 24 weeks of coverage, with December 31, 2020, being the final date for eligible expenses.
If you meet the requirements, some or all of the loan will be forgiven -- which means this can do a lot for your business when done properly.
How Can the Best Payroll Software Help?
Having an HR payroll software that’s integrated with your business’ operations is essential to owning a business. It keeps everything in one place and allows you to worry less about errors -- which are more important now than ever.
In addition to that, the best payroll software helps you fill out your PPP loan application and allows you to keep track of expenses when calculating loan forgiveness. It’s an extremely valuable tool when managing the PPP loan process throughout the rest of the year.
There are two main numbers you’ll need to get from your HR payroll software when filling out the loan application -- the average cost of your payroll each month and the number of employees you have.
The average cost will give the government an idea of how much funds you need, while the employee count will tell them how many employees you need to keep when maintaining loan forgiveness.
Calculating PPP Loan Application vs. Loan Forgiveness
One of the most confusing things with the Paycheck Protection Program is the difference between calculating your PPP loan for the application vs. calculating the amount of loan forgiveness you receive.
There are four main terms that come into play for both sides -- the calculation period, payroll costs, non-payroll costs, and headcount.
When calculating the loan application, the calculator period is for 2019 or the rolling year. You’ll take the average monthly payroll costs and the actual non-payroll costs -- as well as the actual headcount of employees.
On the other hand, calculating loan forgiveness works a little differently. The calculation period is for either 8 weeks or 24 weeks -- or December 31, 2020, whichever comes first. The payroll costs forgiven are the actual costs, as well as the non-payroll costs. When it comes to the headcount, only full-time equivalent employees are eligible for forgiveness.
What Constitutes as Payroll and Non-Payroll Costs?
When calculating loan forgiveness, it’s imperative you know what costs are covered and which are not. Failing to understand this can lead to miscalculations, which can leave you in a hole when you aren’t forgiven as much as you were expecting.
In terms of payroll costs, the following are included: salary, wages, commission, tip, vacation time, parental leave, medical leave, family leave, sick leave, allowance for separation, group health care benefit provisions, insurance premiums, retirement benefits, and taxes assessed on employee compensation.
Non-payroll costs include rent, utilities, and the interest paid on your mortgage.
Are You Eligible for Loan Forgiveness?
Knowing if you’re eligible for loan forgiveness is probably the most important thing you need to know when managing the Paycheck Protection Program. There are certain requirements you must meet before being eligible.
First off, you can’t have any reduction in the headcount of your employees. If you had 176 employees, that’s the minimum you can have when you apply for loan forgiveness. Anything less will result in less forgiveness.
Not only that, but forgiveness will be reduced if any employees receive a 25% or more reduction in salary or wages. This is true for anyone who makes less than $100,000 per year.
Outside of that, you’ll need to use at least 60% of the funds for payroll costs and no more than 40% for non-payroll costs. This will need to be proven when you apply for loan forgiveness. Keep in mind, you must apply for forgiveness, as it won’t be automatically applied to your loan.
To make sure you’re properly prepared for the application process, it’s important to keep detailed records of how you spend the funds you receive, make sure they’re being used for the right things, and make sure you keep a proper headcount of employees throughout the duration of the loan.
How Can Consultants In-A-Box Help?
If you need help managing your Paycheck Protection Program loan and the loan forgiveness that comes with it, Consultants In-A-Box can help.
We provide practical, logical, and simple solutions for businesses of any size. We ensure these systems support everything you need for the PPP loan forgiveness. We will be by your side the entire way in case you have questions or concerns.
Contact us today to learn more about how we can help you and your business find success during these difficult times.
Paychex vs. Gusto: Which One Is Best for You? 0
Introducing a simple accounting software into the daily operation of your business is essential to the future success of your business. It’s something most business owners don’t think about when first starting out, but becomes more of a necessity as your business grows.
If you’ve been scouring the web for the best payroll and human resources software, you’ve likely realized that you have a world of options available to you. Navigating through these options can be difficult since they all market themselves as the best for your business.
Today, we’re going to detail two of the most popular accounting software programs available to businesses today -- Paychex and Gusto. We’ll discuss what they are, as well as the various benefits and downfalls that come with them.
By the time we’re done with this comparison, you’ll have a much better idea of which one works best for you. As a result, you’ll feel much more confident in your accounting department and will gain a large amount of your time back.
Let’s get started.
What is Paychex?
Paychex is known as the ‘big brother’ compared to Gusto because it’s been around longer and is a much more reputable brand. It’s known as an all-in-one solution that can provide help with HR services, payroll management, and administration tasks.
Paychex was founded in 1971 by Tom Golisano. Headquartered in Rochester, New York, it’s been around for nearly 50 years and has learned a lot in the industry. It’s designed to increase the amount of automation inside the workplace, giving you and your employees more time to focus on things that are most important.
Understanding the Benefits
Paychex definitely has much more capability when it comes to larger businesses. It’s certainly designed to meet the needs of businesses with 1-100 employees but can even support businesses with as much as 1,000+ employees.
Some of the features it’s capable of include: payroll, taxes, employee time, attendance, analytics, reports, hiring, health insurance, applicant tracking, HR services, employee benefits, employee screening, payment processing, expense management, and retirement plan benefits.
Paychex combines the benefits of a digital-based platform with the effects of a human-powered element. While many payroll and HR software programs feature fully-digital solutions, you get much more with Paychex.
Understanding the Downfalls
As great as Paychex is, there are some downfalls you should be aware of -- much like any accounting software. For example, some users have noted that the timesheet approval process takes too long and it lacks customization when running reports.
You also can’t print off your own checks, though you can have Paychex send their own checks in the mail. This is largely going to hurt employers that want to send a physical check, instead of a direct deposit.
Finally, many users say they didn’t enjoy the steep learning curve associated with Paychex. While they do admit it has a variety of benefits once understood, they mention getting there as being a bit difficult.
What is Gusto?
Gusto is the much newer accounting software on the market. It was introduced in 2012 as a cloud-based platform designed for small businesses looking for help with their payroll, HR, and administration operation/management.
Gusto is a more affordable option compared to Paychex, though it doesn’t come with as many features. It’s better suited for small businesses that don’t plan on growing anytime soon, if at all. For that reason, it’s a great option for self-employed individuals and sole proprietorships.
That’s not to say Gusto is perfect, though. They have their fair share of benefits and downfalls, just like Paychex did. Don’t worry, we’ll take a look at both of them as well, that way you get the full picture before deciding which one is best for you.
Understanding the Benefits
There’s a lot to like about Gusto as a simple accounting software solution. One of the things we like most about it is the beautiful and easy-to-use interface. It’s one of the best in the industry and provides an excellent experience when managing payroll and HR tasks.
While Paychex required a bit of a learning curve, Gusto doesn’t require much. Their payroll programs are super easy to learn and don’t require you to spend a lot of time training your employees in each department.
There are also four types of payroll you can manage -- regular payroll, bonuses, off-cycle payroll, and termination. It also supports an autorun, which allows you to set your Gusto payroll to run automatically without needing you involved.
Understanding the Downfalls
While there’s a lot to like about Gusto, there are also some downfalls you should consider before making a final decision on Gusto or Paychex. Some of these downfalls could be the reason you choose one over the other, so it’s important to take everything into consideration.
The first major downfall is the fact that Gusto is a US-only service. That means if your business is headquartered outside of the United States, it won’t be of much use to you. In addition to that, it can be rather pricey for those that are in the United States.
Finally, you should be aware that it doesn’t have a mobile app. This takes some of the accessibility away, making it harder to manage when on-the-go -- which most business owners are these days.
Which One is Best for You?
Now that you’ve learned more about what each accounting software has to offer your business, you should have a better idea of which one’s better suited to meet your business’ needs. It’s an extremely important decision, so don’t rush yourself into a commitment.
If you’re still struggling to determine which one you should incorporate into your operations, Consultants In-A-Box can help. We’ve assisted a wide range of companies to find the right accounting software and we can’t wait to do the same for you.
Here’s How Integrated Payroll Services and Time Tracking Can Optimize Your Business 0
Did you know that integrated payroll services and time tracking software can help you improve the efficiency and accuracy of your bookkeeping procedures? At Consultants In-A-Box, we understand how time-consuming and frustrating managing these areas of your business can be -- that’s why we’re here to help!
Since most business owners use separate software for their payroll management, human resources department, and time-tracking, the first step in taking control of these procedures is finding a way to house these things under one roof.
With integrated payroll systems, you don’t have to worry about making costly mistakes that could’ve been avoided with a more efficient process. You’ll have everything you need right in front of you and a majority of your responsibilities are automated.
Why Should We Avoid Manual Time-Tracking?
It doesn’t matter if you’re talking about accounting, bookkeeping, taxes, payroll, or human resources, nothing is more important to the success of these departments than accuracy. Anything that puts this accuracy at risk should be viewed as a weakness and improved upon.
There are so many things that can go wrong when tracking employees’ time manually. There might be a moment when you rush yourself and make a small mathematical mistake. You might forget to track someone’s time one day and have no way of knowing how long they truly worked for -- the same goes for breaks.
If you fail to pay your employee the right amount of money, it can have a damaging effect on your business’ reputation. Your employee makes a complaint, that employee starts to talk to other employees, other employees talk to outside sources. It’s a vicious cycle that could be avoided with a quality time tracking software tailored for your business’ needs.
Integrated Payroll Services & Human Resources
Payroll and human resources go hand-in-hand when operating a business -- no matter the size of that business. With so many different software and platforms available to assist you with your procedures in both of these areas, you have to be careful with which ones you choose.
When you have two pieces of software that don’t cooperate with each other, it doesn’t matter how amazing those two software programs are. You’ll still be vulnerable to costly mistakes, errors, and inaccuracies when operating your business.
Let’s say you have an employee that comes to you with two requests -- they need to change their address and they need to fix their timesheet because they forgot to clock out the day before. With integrated services, all you need to do is make those changes once and you’re done.
Without integrated payroll systems, you’ll need to make those changes in each software program. Furthermore, you’ll open the door to making even more mistakes. As you can imagine, this takes time. And in business, time costs money.
Benefits of Integrating Payroll, HR, & Time Tracking Software
When you can have all your procedures under one roof, it maintains a level of consistency across all departments that improves the efficiency of your business. You’ll limit mistakes and maximize the amount of time these departments have to focus on more important tasks.
The right time tracking software, payroll system, and HR headquarters will help you automatically track hours, pay, taxes, deductions, checks, direct deposit, new hire documents, employee changes, bonuses, overtime, and so much more.
Better yet, these integrated systems can work in a variety of ways to meet your business’ needs -- whether that be a bar code, magnetic stripe, biometric information, or tracking via a computer.
Let’s take a look at some of the major benefits your business receives when integrating the software you use for your payroll and human resources departments.
1. Efficiency is Key
Owning a business requires a never-ending commitment to management. You need to make sure you’re not spending too much on payroll, but also need to make sure you have enough overhead to handle the growing demand of your business.
Integrated systems allow you to keep a tab on all of these things just like you were before, but it adds a level of efficiency that was absent before. Your dashboard will tell you everything you need to know and even help you make projections for the future.
Efficiency is key to a successful business and integrated systems will get you there.
2. Moving Closer to Being Paperless
In today’s digital world, anything designed to help you stay eco-friendly makes your business more appealing to the outside world -- including investors and customers. As the world moves closer to a paperless society, your business should do the same.
Manually managing payroll and human resources tasks requires a lot of paper and a lot of ink. In business terms, that means it requires a lot of money and overhead.
Imagine how much easier it would be to ditch all the paperwork and have everything completed for you automatically. Your employee’s times are automatically tracked and recorded in the software, which is then used to automatically calculate the employee’s pay for any given pay period.
Once the pay period is complete, the checks are automatically written and direct deposits automatically sent. It’ll also be tracked in real-time and give the employee access to payroll records and history -- all without the exchange of paper.
3. Focusing Your Time Elsewhere
When your human resources and payroll departments spend the majority of their time completing tasks manually that should be completed automatically, it takes away from the time they could be spending on more important tasks.
These departments should be focused on finding new and innovative ways to find the right employees and implement the right procedures -- not manually tracking an employee’s hours. When these departments finally get the tools and resources they need to successfully do their job, you’ll be surprised by what they’re capable of.
4. Following Laws, Rules & Regulations
How many times has your company been attacked by the IRS, state governments, local agencies, or even employees due to a failure to comply with laws, rules, and regulations? It’s a common mistake made when running a business, but one that can be avoided nonetheless.
With integrated systems for each department, you’ll effectively receive notifications and alerts when something needs to be attended to. This can include employees that have reached their weekly hour limit or when an employee has entered overtime pay for their shift.
Ensuring you follow rules, laws, regulations, and guidelines when scheduling and compensating your employees is essential. In the event you are audited for something, your integrated systems will have all the documents, data, and records required for a smooth audit.
5. Keeping Employees Happy
When you hire employees, you want them to have a positive experience working for your company. It makes it easier to hire new employees when you have a good reputation and limits the amount of turnover you see on a monthly basis.
One of the keys to keeping your employees happy is a streamlined scheduling and payment process that’s free of errors and easy to access. Being able to easily track vacation time and sick pay, as well as their future schedule, makes it easier for the employee to work their personal life around their work demands.
Business owners can also set up alerts and notifications when an employee is nearing a bonus or an anniversary that might be subject to a pay increase. Being able to automatically track these things takes the guesswork out of payroll and gains trust with your employee when they see these changes made effective immediately.
6. Accessibility & Security
Data entry becomes extremely difficult when you start to introduce several different working parts and destinations before completion. The risk of making mistakes and losing information in the mix is increased without a streamlined process.
Integrated payroll systems limit the number of people entering data and maximize the number of people reviewing information for mistakes. Not only does it help detect mistakes before becoming an issue, but it gives your human resources department more time to focus on improving these procedures for the future.
In addition to that, integrated payroll services allow for better security across all platforms. Since a majority of the information you handle on a day-to-day basis is confidential and sensitive information, it’s imperative you keep it safe from thieves and hackers. You’ll be able to take control of who has authorized access to this information.
Are You Ready for Integrated Payroll Services?
Integrating your payroll and time tracking software with your other human resources software programs is one of the most beneficial things you can do to your business’ operations. It helps improve the efficiency of your HR department, increases the satisfaction of your employees, and gives you the confidence you need when running your business.
Your employees will be able to easily access their information and payroll records. This gives them exactly what they need when dealing with personal matters, as well as limiting the amount of requests your HR department receives.
As a result, it also helps give your HR department more time to focus on tasks that improve procedures and solidify the future of your business. With a majority of their previous responsibilities now automated, they can be more efficient elsewhere.
If you’re tired of seeing outdated procedures and disparate software ruin your company’s reputation, Consultants In-A-Box is ready to help. We can help you take better control of your current HR situation and improve the efficiency of time tracking, payroll, and employee management within your business.
Contact us today to learn more about how we can assist your business.
A Guide to Paying Remote Employees and Contractors 0
Have you ever found yourself scratching your head when paying remote employees? Did anyone ever teach you how to pay an independent contractor properly?
Business owners today are met with a wide range of challenges, but none present a higher risk to your company than your payroll procedures. You need to ensure your payroll process is as efficient and error-free as possible.
Of course, that means understanding the differences between an employee and an independent contractor. Furthermore, you need to understand the different state laws when paying remote employees.
For any new small business owner, this might seem like a lot to learn. While it’s tedious in nature and not the most exciting task you’ll have as a business owner, it’s all the more necessary when keeping your business in good standing -- with customers, employees, the IRS, and the governments.
Luckily, you’ll also have the help of payroll software, which can manage a lot of these state and federal laws for you.
Understanding State Withholding Taxes
When paying remote employees, one of the most common mistakes a business owner makes is assuming you pay state withholding taxes in the state where your business is set up. This is not true.
For the most part, you’re going to be paying state withholding taxes in the state the employee works -- not where you work. That means if your business is set up in Los Angeles, CA and your employee works remotely from Buffalo, New York, then you’ll have to pay state withholding taxes in New York -- for that employee.
You can start to see how this can get messy when you have remote employees working all over the country. It’s also a large reason why most people decide to hire an independent contractor in today’s climate, which leads us to our next point.
Understanding the Two Types of Remote Workers
Remote workers come in two forms these days -- an employee and a contractor. Knowing how to pay contractors properly and paying remote employees correctly are two things every business owner needs to know before hiring anyone.
Let’s take a closer look at each type of remote worker:
- Remote Employee - subject to withholding half of the payroll taxes from their paycheck and paying the other half of payroll taxes yourself.
- Remote Contractor - not subject to any withholding or tax payment because the contractor handles it themselves.
You can see why many businesses today are more attracted to the remote contractors, but that doesn’t mean remote employees don’t come with benefits too.
In fact, each state has different ways of classifying workers, making it your main duty to ensure all workers are classified properly. This is in your best interest and will help you avoid any penalties or fees sent down by the government.
How to Pay Contractors That Work Remotely
When compared to paying remote employees, learning how to pay an independent contractor is far easier and requires less work. This is largely due to not having to pay state withholding taxes, which saves any business owner a massive headache when doing payroll manually.
It should be noted that your business might be subject to paying backup withholding taxes if the remote contractor is working in a non-resident state. This is one of the laws and regulations that varies by state, which is why it’s always important to check each state’s laws when hiring employees.
If you’re paying remote contractors for work they completed, there are generally only two forms of paperwork that need to be managed by the business owner -- the W9 and the Form 1099-MISC.
Let’s take a closer look at each document:
- W-9 - this is a ‘Request for Taxpayer Identification Number and Certification’ and must be filled out before you can pay a remote contractor. It’s what gives you the information needed for the second form we’ll talk about. Backup withholding might be necessary if the wrong identification number is given.
- Form 1099-MISC - this is the form you fill out at the end of the year for tax reasons and must be filled out for any contractor you paid more than $600. It’ll tell the government how much was paid to the contractor so they can keep tabs on all the workers in the United States that owe taxes.
You’ll save a lot of time when doing payroll with independent contractors, but make sure you keep accurate records of both of these forms, as well as any payments made to them, which is essential to maintaining good relationships with the government.
Paying Remote Employees for Their Time
When it comes to hiring and paying remote employees, the level of difficulty is raised. First, you’ll have to determine whether they are an in-state employee or out-of-state employee.
In order to figure that out, you need to understand the difference between the employee’s resident state and non-resident state. The resident state is the state the employee lives in, while the non-resident state is the state the worker commutes to for work but doesn’t live in.
Once you understand the difference, ask yourself two questions:
- Does your remote employee do their work at home or do they have to travel somewhere to complete their work?
- Does your remote employee live in the same state your business is registered or do they live in a different state?
If either of these is unclear, use their W-9 to learn their resident state and don’t be afraid to ask them whether they work from home or not. You’ll want to know this information because you’ll be withholding taxes in the state your employee works, whether that happens to be their resident or non-resident state.
Paying Taxes for In-State Remote Employees
When paying a remote employee that works in the same state you registered your business in, then you’ll have to both withhold taxes from your employee’s check and pay state unemployment insurance in the state your business is registered in.
This makes it easy for a small business owner because you don’t have to deal with any different laws in other states. It should be noted, however, that some local regions require a local income tax to be withheld as well.
There’s only one incidence where things can get tricky and that’s if your employee works in your state, but lives in another state. Normally this would be handled the same way as an in-state employee, but that changes when the two states have a reciprocal agreement with one another.
So, what is a reciprocal agreement?
A reciprocal agreement is something that’s signed between neighboring states. It states that employees working in a neighboring state from their resident state, they can withhold their taxes in their home state instead of their work state.
For example, both Pennsylvania and New Jersey have a reciprocal agreement with each other. Illinois is another state with a reciprocal agreement, but they have it between four states -- Kentucky, Michigan, Iowa, and Wisconsin.
Reciprocal agreements are crucial because it saves the employee from having to file two state returns every year. They’ll be eligible for certain tax credits, but it still makes tax returns extremely frustrating year after year.
If you have the right payroll software, it could help make things easier for both you and the employee when dealing with reciprocal agreements. Some software programs even let you do a courtesy withholding from the employee’s check to avoid surprises down the road.
So, how do you set up reciprocal withholding?
Setting up reciprocal withholding with an employee isn’t a difficult process, don’t worry. First, your employee will be required to fill out a non-residency certificate. This certificate is what notifies the employer and government that the employee is excused from tax withholding in their work state.
The business owner won’t have to do anything with this form, except store it away for record-keeping. Once you store it away, contact your payroll provider and explain to them the situation so they can set up the correct withholding amount in the right state for you.
If your employee doesn’t have a non-residency certificate, they can get one by contacting their state’s tax agency.
Paying Taxes for Out-of-State Remote Employees
When paying and withholding taxes for out-of-state remote employees, the process is much different than in-state employees. It largely requires three steps to complete the process properly -- registering, learning, and taking action.
Let’s take a closer look at each step:
The first step in the process requires you to register your business with your employee’s home state. It’s one of the tedious things you need to do with each employee, even if you have employees scattered across the country.
In some areas, you might have to register your business with the various local tax agencies, labor agencies, and unemployment agencies in the home state. Of course, that’s only if it’s required in that state.
The second step in the process requires you to learn the different pay and labor laws inside your employee’s home state. There is a wide range of laws you need to understand if you want to avoid errors, mistakes, and penalties.
Some of the things you might want to learn include:
- Does the employee’s home state require you to offer worker’s comp insurance?
- Does the employee’s home state require you to give breaks? And do those breaks have to be paid?
- Are there any local income taxes that need to be paid in your employee’s home state?
- What are the state’s requirements for overtime and does it benefit the employee more than federal overtime laws?
- Does the employee’s home state require you to withhold state disability insurance?
- What laws and regulations does the state have regarding delivery of paychecks? What about an employee’s final paycheck?
- How often does your employee’s home state require you to pay them? Do they differ from your own state’s requirements?
- Does your employee’s home state require you to provide the employee with a paystub when sending out paychecks?
- Does your employee’s home state have a minimum wage requirement? What about the local agencies?
Once you can get these questions answered, you’ll have a much better idea of what you need to do when paying your remote employees that are out-of-state. It always helps to write down the answers to these questions in an accessible place so you don’t forget.
3. Take Action
Now that you have the information you need, it’s time to put that information to good use. When it comes time to pay your remote out-of-state employee, you’ll need to ensure you withhold the proper amount of state income taxes.
Not only do you have to withhold these taxes, but you have to file them with the state government and make a payment to avoid penalties. You’ll need to check with each state to make sure you do this frequently enough.
In addition to state income taxes, there are unemployment taxes you need to pay each paycheck. The rates for these taxes will vary by state, but you’ll receive the rates when you register for that state (see step 1).
If you’re looking for an easier way to manage these withholdings and tax payments, the right payroll software can do a majority of the work for you. It’s a large reason why so many businesses are taking advantage of what payroll software has to offer.
When searching for a payroll provider that’s right for you, contact Consultants In-A-Box. We can help you implement the right strategies and solutions to increase the efficiency and accuracy of paying remote employees.
And now that you know how to pay independent contractors correctly, you’ll have a much less stressful time come payday. For a business owner, that means more than you can imagine.
Tips for Evaluating Payroll Providers 0
Maintaining an efficient human resources department and payroll procedures is one of the keys to a healthy business. With so many different systems and software programs being used by different employees, the best payroll providers find a way to house them all under one roof.
If you’re looking to take better control of these departments and limit the costly mistakes made in the process, you need to know what is a payroll provider and how you can find the best payroll providers for small businesses.
Before you start your search, we have a variety of tips we believe will help you find the right payroll provider for your business. Let’s take a look!
1. Determine Your Goals
In order to find the payroll providers best suited to meet your needs, it’s essential you first understand what it is you want to achieve. Take into account your current and future goals for your business and how those goals can be met with the addition of an integrated payroll system.
One of the best practices when determining your goals is sitting down with the executives, senior leadership, management, and consultants within your company to discuss shared goals. It helps get everyone on the same page before looking at different payroll providers.
2. Determine Your Needs
Every business is unique and has different requirements they need to meet when managing payroll. Once you determine your present and future goals, it’s imperative you consider your actual needs.
This includes the various features and integrations you need across all software programs, different regulations you need to follow in different cities, states, or countries, and different types of employees you need to manage.
3. Focus on Privacy & Security
Anytime you’re dealing with human resources and payroll, you’re managing important, confidential, and sensitive information that belongs to your employees. As a business owner, your duty is to implement the right strategies and solutions to keep this information safe.
To do this, ensure you understand how and where your business’ information is being stored, how you can back that information up at any time, and what your payroll providers are prepared to do when fraud or issues arise.
4. Implementation vs. Adoption
When finding the best payroll providers for small businesses, it’s important to look at their track record to get a glimpse of how they’ve helped similar businesses in the past. Two of the major areas you’ll want to observe are the payroll provider’s implementation technique and adoption methods.
These two stages in the process are essential to getting your new payroll provider off to a smooth start -- especially when dealing with a large number of employees. Without constant communication and management throughout these stages, mayhem can strike at any moment.
On the other hand, payroll providers that take these stages seriously are able to get the new systems working efficiently in no time at all. Your employees will understand what they need to do and you’ll have a business full of employees on the same page.
5. Don’t Forget About the Big Picture
Getting past the implementation and adoption stages of the process are huge steps for your business, but it’s not the only thing that matters when looking at different payroll providers. You need a provider that extends their support well beyond these two stages.
Your business is bound to grow, especially if you’re constantly making smart decisions like the one you’re in the midst of making right now. Payroll providers need to be able to scale with your business and they should provide the support needed for any mishaps along the way.
You should always be thinking big picture when it comes to your business and your payroll provider is no different.
6. Cater to Data & Analytics
If you want to make smarter decisions when navigating your payroll and human resources procedures, you can use data and analytics to help power those decisions. They provide valuable insight into your current procedures and help you innovate others for future success.
Your payroll provider and integrated systems should support these needs and make them extremely easy to view. The more accessible they are, the more useful they are to you and your staff.
7. Understand the Payroll Providers in Front of You
Understanding a payroll provider’s features and offerings is essential to finding the right one for your company, but you shouldn’t stop there. You should commit your team to learn everything there is to know about the payroll providers in front of you.
Study their history, look at feedback or reviews from previous clients, and most importantly look into their dedication to the future. As your business finds new ways to innovate your industry, you should be teaming up with a payroll provider with common views.
8. Evolving Your Business Over Time
When automating and integrating certain areas of your business, it’s important to make sure it doesn’t take away from the human element of the business. These tools and resources are supposed to make your team more efficient, but they aren’t supposed to drive your team away from each other.
If you’re ready to start evolving your business and sparking the growth you’ve always imagined you’d see, it’s time to start taking better control of your payroll procedures. Now that you’ve learned what is a payroll provider, don’t be afraid to ask questions when interacting with payroll providers during the evaluation process.