Payroll Made Easy
Small business owners have three general options for payroll tasks: do-it-yourself in-house (by yourself or a bookkeeper), rely on an accountant or use a payroll service.
Do it yourself The National Federation of Independent Business (NFIB) reported this past summer that about two-thirds of small business owners do their own payroll--the smaller the company, the more likely that this is true. In more than half of these businesses, the task falls to the owner-manager. Many of these small businesses still do this chore by hand, eschewing software or other electronic tools.
The main reason given for handling payroll in-house is cost; owners view doing it themselves a money saver. However, owners should decide whether, in fact, it is a money saver--how much revenue could an owner generate for the business in the time he or she spends on payroll?
Use an accountant Some small businesses use their accountants for payroll services. They may seek advice on such matters as how to classify workers (as employees or independent contractors) or use accountants to prepare payroll and prepare and file all payroll-related returns. While this may be the costliest alternative, some businesses prefer it because of the breath of service--the accountant can, for example, advise the company about using a particular type of retirement plan or other employee benefit. And, with the electronic and software options that accountants can use and interface with clients, the cost may not be as high as in the past.
Use a payroll service According to the NFIB survey above, about 20% of small businesses currently use a payroll service. Most business owners have heard of ADP and PayChex as leading payroll companies. They may not know that Intuit Small Business Payroll has more customers than ADP and PayChex combined. With more than 972,000 customers, Intuit services the smaller small business, typically companies with fewer than 50 employees. This product, which of course is fully integrated with all QuickBooks platforms, is a lower-cost alternative to many other payroll solutions.
With QuickBooks Payroll, owners can opt to handle payroll in-house using software to simplify the process, obtain assistance with payroll from Intuit, or let Intuit handle everything, including various HR functions. The in-house option gives a range of services: time-tracking employee hours, creating paychecks including all federal, state and other deductions, paying payroll taxes and other payments, and completing and filing tax returns. Cost: Under $300/year.
Assisted payroll shifts the burden of tax filing to Intuit. Cost: Starting at $708/year for up to 15 employees. There are added fees for direct deposit, W-2 printing and state processing.
The complete payroll service includes all federal and state payroll taxes and integrated HR solutions. Cost: Starting at $100/month. This package includes a "no penalties" guarantee--as long as information provided to Intuit is accurate, then payroll taxes will be deposited on time and tax filings will be accurate and on time or it will pay interest and penalties, as well as deal with the IRS--certainly peace of mind.
For accountants: Intuit offers an enhanced payroll option for professionals to provide payroll services to their clients using QuickBooks. A single subscription of under $300/year enables management of up to 50 EINs.
QuickBooks Payroll alternatives include: PayCycle, which is geared to companies with fewer than 20 employees, and SurePayroll, which provides online payroll services to companies with up to 100 employees.
