Small Business payroll services

As an owner of a small business one of the largest headaches involves payroll.  New York State, requires a  myriad of forms which have to be filed, all of which have different due dates.  In addition to the State Forms, there are Federal Forms as well.

Payroll is something you can do entirely on your own, but it is not advisable. 

• Federal 940/941 (depending your situation you may need to file a 943/ 944)
  Federal W-2

• New hire reporting forms

• NYS 45 forms (employee quarterly combined wage witholding, wage reporting, and unemployement  insurance)

• Niche businesses in areas such as agricultural will require their own special forms as well.

Remember that various agencies are constantly updating forms, withholding tables and you are responsible for being on top of all changes as applicable to your business.

It is no wonder that one of the largest headaches of running small businesses is managing payroll.  Payroll services for small businesses are necessity, especially if you only have a small number of employees (under 10).  Without the aid of a payroll service, you will be inundated with paperwork.  Keep in mind as well, as there are penalties (and interest) for late filings, along with potential civil and criminal penalties in certain situations.  Ignorance is not an excuse when you are dealing with government agencies.

• Online services: Accounting software programs such as QuickBooks & Netsuite offer various levels of payroll services.
• Outsourced payroll firms: These companies include organizations such as ADP, Paychex, along with many small companies as Payroll Services are in a highly fragmented market.
• Bookeepers: Engaging a book keeper to perform your payroll is another choice, especially if they are already doing your other finances in addition to payroll for small businesses.

Getting referrals: Getting a referral is not a bad idea, if you wish to use a person service.

Caution: Make sure you understand the relationship between your contact and the referral company. It is company for companies to refer business to other companies not based on quality but rather if they may receive a fee for bringing the company business.

 Larger firms such as ADP and Paychex are not necessarily the best option for smaller businesses.  There are many features in the larger offerings such as advanced drill down reporting.  These features are extremely useful for larger firms, but may not offer much value for the small business.  Larger companies such as Paychex and ADP are more costly as they have a larger cost structure.  These companies will use commissioned inside and outside sales forces to obtain customers.  You are also paying for them to develop features (targeted for larger businesses) which will never be useful to you.

As soon as you become a customer, you will most likely never speak with the sales person again.  After the deal is closed, most payroll salespeople will usually be onto the next account.  As a matter of fact, payroll companies are notorious for having poor customer satisfaction as evidenced by their attrition rates. 

Attrition can be so high payroll customers need to add new customers every year just to maintain the same amount of revenue (i.e. to make up for unsatisfied customers who decide to leave). 

Your account will be transitioned to internal servicing teams, who may not have the same level of interest as your salesperson.  

Note:  If you do decide to use a company such as Paychex, the rates are negotiable so make sure you do not take the first offer. 

I personally use the QuickBooks payroll service. This is because I am already a user of the QuickBooks software program. As a small business owner, I would not be able to manage payroll without using some sort of outsourced assistance.

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