This article, “Small Business Payroll Systems: Top 5 & Outsourcing Benefits”, understands Managing payroll is a crucial aspect of running a small business, but it can also be time-consuming and complex. In recent years, cloud-based payroll systems have gained popularity. These can streamline payroll processes and ensure compliance with constantly changing tax laws and regulations.
Below, we will compare Small Business Payroll Systems: Top 5 & Outsourcing Benefits. We will then discuss the advantages and disadvantages of each.
We will look at the best time to change, and discuss the benefits of involving your outsourced Bookkeeper.
1. Gusto
Advantages:
- User-friendly interface: Gusto’s intuitive design makes it easy for both employees and employers to navigate and manage payroll tasks.
- Comprehensive features: Gusto offers a wide range of features, including automated payroll, benefits administration, and time tracking.
- Compliance assistance: Gusto keeps up-to-date with tax laws and regulations, ensuring that your business remains compliant with local, state, and federal requirements.
- Employee self-service: Employees can access their pay stubs, W-2s, and other documents through a secure online portal, reducing the need for paper documentation and administrative tasks.
- Enhanced HRM features: Gusto is extremely employee friendly and has options for including employee onboarding, HR manuals etc.
- Integration capabilities: Gusto can easily integrate with other software, such as accounting and time tracking systems, streamlining your business processes. Although, note that this is at a high level so your bookkeeper may need to split out costs.
Disadvantages:
- Limited customization: While Gusto’s features are comprehensive, it may not offer enough customization options for businesses with unique payroll needs.
- No dedicated mobile app: Gusto does not offer a dedicated mobile app, which may limit accessibility for some users.
- Phone Support: while enhanced phone support is available on some plans, diagnosing issues, especially between payroll and benefits administration can be cumbersome with the Gusto team
2. QuickBooks Payroll
Advantages:
- Seamless integration with QuickBooks: For businesses already using QuickBooks for accounting, QuickBooks Payroll offers a seamless integration at a detailed level.
- Robust features: QuickBooks Payroll provides a comprehensive suite of features, including automated payroll, tax filing, and employee self-service portals. Note that these work well, especially for time tracking options, but are not quite as end-user friendly as Gusto.
- Customization options: QuickBooks Payroll allows for greater customization, enabling businesses to tailor the software to their specific needs.
- Mobile app: QuickBooks Payroll has a dedicated mobile app, making it convenient for employers and employees to access payroll information on the go.
Disadvantages:
- Learning curve: QuickBooks Payroll can be more complex than other options, which may result in a steeper learning curve for new users.
- Limited support: Some users have reported difficulties with customer support, which could be a concern for businesses that require assistance in troubleshooting issues.
3. ADP
Advantages:
- Scalability: ADP’s payroll solutions are designed to grow with your business, making it an ideal choice for companies that anticipate future expansion. ADP really shines when it comes to managing organizations with more than 25 employees.
- Extensive features: ADP offers a wide range of payroll and HR features, including time and attendance tracking, benefits administration, and compliance assistance.
- Global capabilities: For businesses with international employees, ADP provides global payroll solutions that can handle multi-currency and multi-language requirements.
- Dedicated mobile app: ADP offers a mobile app, allowing employers and employees to access payroll information from their smartphones.
Disadvantages:
- Complexity: ADP’s extensive features can make it more complicated to navigate, particularly for small businesses that may not require all of its capabilities.
- Customer support concerns: Some users have reported issues with ADP’s customer support, which could be problematic for businesses that require assistance.
Paychex:
Advantages:
- Customizable solutions: Paychex offers customizable payroll solutions, enabling businesses to select the features and services that best meet their needs.
- Comprehensive features: Paychex provides many features, including payroll processing, tax filing, time and attendance tracking, and benefits administration.
- Scalability: Paychex is designed to accommodate businesses of various sizes, making it a suitable option for small businesses with plans to grow in the future.
- Compliance assistance: Paychex keeps track of tax laws and regulations, ensuring your business remains compliant at the local, state, and federal levels.
- Mobile app: Paychex offers a dedicated mobile app, making it easy for employers and employees to access payroll information on the go.
Disadvantages:
- Complexity: Paychex’s wide range of features can be overwhelming for some users, particularly those who are new to payroll management.
- Customer support: Some users have reported dissatisfaction with Paychex’s customer support, which could be a concern for businesses that require prompt assistance.
- Hidden costs: while Gusto and QuickBooks Payroll charge per month, Paychex charges per payroll. In addition, there are many different types of charges which when added up, make Paychex more expensive than many of its rivals.
Square Payroll
Advantages:
- Seamless integration with Square products: For businesses already using Square, Square Payroll offers a seamless integration, simplifying overall business management.
- User-friendly interface: Square Payroll’s straightforward design makes it easy for employers and employees to navigate and manage payroll tasks.
- Basic features: Square Payroll provides essential payroll features, such as automated payroll, tax filing, and employee self-service portals, making it suitable for small businesses with basic needs.
- Mobile app: Square Payroll has a dedicated mobile app, allowing users to access payroll information conveniently from their smartphones.
Disadvantages:
- Limited advanced features: Square Payroll may not offer some advanced features found in other payroll systems, which could be a limitation for businesses with more complex payroll needs.
- Integration limitations: Square Payroll may not integrate as seamlessly with non-Square software, potentially complicating the integration process for businesses using multiple systems.
- Simple focus: Square Payroll works best for smaller organizations that rely on Square for its merchant capabilities.
Small Business Payroll Systems: Top 5 & Outsourcing Benefits Summary Table
| Feature | Gusto | QuickBooks Payroll | ADP | Paychex | Square Payroll |
|---|---|---|---|---|---|
| User-friendly interface | Y | Y | Y | ||
| Comprehensive features | Y | Y | Y | Y | |
| Integration with QuickBooks | Partial | Y | Partial | Partial | Partial |
| Multiple plans | Y | Y | Y | ||
| Large Workforce ready | Y | Y | Y | ||
| Automatic tax filing | Y | Y | Y | Y | Y |
| Benefits administration | Y | Y | Y | Y | |
| Time and attendance tracking | Y | Option | Option | Option | Option |
| Employee self-service | Y | Y | Y | Y | Y |
| Customizable solution | Y | Option | |||
| Multi Currency / Language | Y | Option | |||
| Dedicated support | Option | Y | |||
| Optional HR add-ons | Option | Option | Option | ||
| Straightforward pricing | Y | Y | Y | ||
| Wider ecosystem of products | Y | Y |
When to Change Payroll Provider
So, you’ve taken the time to compare Small Business Payroll Systems: Top 5 & Outsourcing Benefits and decided to make a change, or, you’ree frustrated with your current provider. When IS the right time to change?
The best time to change payroll systems depends on your business’s unique circumstances, but there are a few general guidelines to consider that can help make the transition smoother:
- End of the calendar year: Changing payroll systems at the end of the calendar year is advantageous because it aligns with the end of the tax year. This timing minimizes the need for transferring historical payroll data, making the process less complex. Additionally, tax forms such as W-2s or 1099s can be issued using the old system, while the new system can start fresh with the new tax year.
- End of a quarter: If you can’t wait until the end of the year, consider making the change at the end of a quarter. This approach simplifies quarterly tax filings and reduces the amount of data that needs to be transferred to the new system.
- Off-peak season: If your business has a seasonal cycle or a period of reduced workload, it may be an ideal time to change payroll systems. During these times, you’ll likely have more time to focus on the transition, train employees on the new system, and address any issues that may arise.
- After a thorough evaluation: Regardless of the specific time you choose, make sure to carefully evaluate the new payroll system and ensure that it meets your business’s needs before making the switch. This includes comparing features, pricing, ease of use, and customer support among different payroll systems.
How your Outsourced Bookkeeper can help you to Transition Payroll Providers
- Expert guidance: An outsourced bookkeeper can provide valuable insights and recommendations on which payroll system would best suit your business’s needs, based on their experience and knowledge of various systems.
- Smooth transition: A bookkeeper can help manage the transition process by transferring relevant data, setting up the new system, and ensuring that all necessary compliance requirements are met.
- Employee training: Your bookkeeper can provide training and support to your employees, helping them understand how the new payroll system works and addressing any concerns or questions that may arise.
- Ongoing support: An outsourced bookkeeper can provide ongoing support and ensure that the new payroll system is running smoothly. They can manage payroll processing, tax filings, and other related tasks, freeing up your time to focus on other aspects of your business.
Advantages of Using an Outsourced Bookkeeper to Run Your Payroll
While cloud-based payroll systems offer numerous benefits, some small businesses may still find the process overwhelming. In these cases, outsourcing your payroll to a professional bookkeeper can provide additional advantages:
- Expertise: Outsourced bookkeepers have extensive knowledge of payroll processes, tax laws, and regulations, ensuring your payroll is managed accurately and efficiently.
- Time savings: Outsourcing your payroll allows you to focus on other aspects of your business, freeing up valuable time that can be used to grow and improve your company.
- Reduced risk of errors: Professional bookkeepers are experienced in managing payroll and are less likely to make errors compared to handling payroll in-house. This can save your business from costly fines and penalties due to payroll mistakes.
- Customized solutions: Outsourced bookkeepers can tailor their services to your business’s specific needs, ensuring you receive personalized support and expertise.
- Cost savings: While outsourcing payroll may seem more expensive initially, it can ultimately save your business money by reducing the need for additional staff, software, and training.
- Employee on-boarding and off-boarding: Hiring a new staff member, especially in a different state is difficult from a complaince point-of-view. Yopur outsourced bookkeeper can navigate the different paperwork, systems and authorities to ensure it is done right.
- Never having to rely on the Payroll Provider “Customer Service”: As they say, “Anyone can steer the ship when the sea is calm.” But, when things get tricky, waiting on the phone for hours with the software provider, or your state tax authorities can be extremely frustrating. Your outsourced Bookkeeper can take this load off your hands, leaving you to focus on your business.
Conclusion
Selecting the right cloud-based payroll system for your small business is crucial in ensuring efficient and accurate payroll management. Each of the top five payroll systems on our list “Compare Small Business Payroll Systems: Top 5 & Outsourcing Benefits.” – Gusto, QuickBooks Payroll, ADP, Paychex, and Square Payroll – offers its own set of advantages and disadvantages, so it’s essential to carefully consider your business’s unique needs and requirements when making a decision.
In addition, outsourcing your payroll to a professional bookkeeper can provide a range of benefits, such as improved accuracy, time savings, enhanced compliance, better support, reduced frustration and customized solutions.
Ultimately, the combination of a cloud-based payroll system and an outsourced bookkeeper can help streamline your payroll processes and allow you to focus on growing and improving your business.
