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Do you struggle with managing payroll in your small business? If so, you are not alone! In fact, many small businesses hire outside payroll software to help them with the administration of employee paychecks and tax payments. In this article, we’ll cover what to look for in an outsourced payroll software provider and give you some tips on how to find the right one for your business. At the end of the article, we’ll also answer your most frequently asked questions about payroll software.
Payroll Issues And Their Solutions
1) Why Are Small Businesses Failing On Payroll?
There are a lot of moving parts in small businesses, and keeping up can be a challenge. One area many small businesses don’t focus on enough is payroll. According to a new survey, 20 percent of SMBs reported late payments from clients—and even worse, one-third have been stiffed by clients at least once or twice. It makes sense—when it comes time for a client to make an actual payment, something else always seems more important. After all, how often do bills come due right before your child’s birthday party or just before you go on vacation? Sometimes being late on important things isn’t so bad if everyone knows it’s coming.
2) Understanding Your Reporting Requirements
You have to report your employee’s income and deductions on a regular basis. Federal tax law requires most employers to issue a W-2 form (Wage and Tax Statement) by January 31 of each year. You are also required to file an IRS Form 941 (Employer’s Quarterly Federal Tax Return) no later than February 28, which covers employee wages earned in January, February, and March. The employer should complete and submit one copy of form 941 for each district office where any of its employees work if it has more than one district office where employees perform services.
3) How Payroll Software Can Help Small Businesses?
If you’re a small business owner, chances are payroll is a real pain point for your business. Payroll is time-consuming and can be extremely stressful. Don’t worry: There are many solutions out there that make doing payroll easy—so easy, in fact, that it will take up just one day per month (and sometimes even less!). The best part is that these tools help prevent errors by providing all of your employees’ W-2s (the tax form they file at year-end), withholding information and amounts, as well as date-specific salary information. They also give you peace of mind by helping to manage taxes and late payments through automated reminders and alerts.
4) Setting Up Payroll Software
With so many variables and moving parts, starting a new business is hard enough. And dealing with payroll for a new venture that doesn’t yet have employees is more complicated than it needs to be. When deciding on which payroll solution best fits your business, ask yourself these five questions: Are its features tailored toward startups (and startups only)? Does it provide competitive pricing? What integrations does it offer? How customizable is it? What kind of support do they offer (and how quickly will they get back to me)? If you are looking at software as a service or something cloud-based, make sure you check out reviews from other users before making your decision.
5) Know What Features You Need
The first step in determining which payroll provider is right for your business is to figure out exactly what kind of setup and support you’ll need. How many employees will be on your team, where are they located, and how frequently do they get paid? Are there any special tax considerations for your industry or company structure? Is some kind of time tracking or billing software already in place that can be integrated into payroll, or will a separate tool be required? Many vendors offer a variety of different features but it’s important to figure out exactly which ones—and how much they’ll cost—before signing a contract. Even seemingly small details like tax codes can make a big difference.