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payroll management

4 Payroll Apps To Benefit Small Businesses

According to late studies of the American Payroll Association, companies that use traditional pay and paper methods of employee timekeeping show an error rate between 1-8%. 33% of employers make payroll errors that cost billions of dollars annually. One of QuickBooks Payroll studies claims that 18% of small business employees would quit after a single late paycheck. 

Moreover, during the COVID 19 pandemic, it became obvious that cash flow reduction and mass transition of employees to remote work aroused the payroll digitalization problem on the same level as the survival of SMB. There are no more free resources that would cover IRS penalties, wrong withholdings, and incorrect time calculations. 

I made a list of apps that would help you to transform your outdated payroll workflow into a transparent and law-compliant system.

The criteria

You might wonder what criteria are lying beneath our choice. The principles are rather simple. First, there should be popular solutions that are well-known and have enough reviews to be judged at a glance. Second, we included only apps for SMBs, with according pricing: affordable and transparent for growing business.


1. QuickBooks Online Payroll (QBOP)

QBOP is the most popular payroll solution that is integrated with all-embracing platforms of QuickBooks: general accounting, invoicing, and inventory management. The system is tax compliant with the US, Canada, and Australia laws. It is easy to start setting it up from scratch and ask support from the community if the problems occur. Starters might confuse QBOP with another Intuit payroll system: Intuit Online Payroll (IOP). The difference between them is that IOP is mainly used by bookkeepers who run many clients, or companies that offer payroll as a service.

 Why do I need QBOP?

  • It features a huge bunch of integrations for the custom experience;
  • It offers wide geography laws compliance;
  • It has the Tax Penalty Protection option;
  • It fits small companies that need full automation of the payroll process.


2. Xero Payroll

Xero Payroll is another great option for payroll management for small and medium businesses. Unlike its direct competitor QuickBooks Online Payroll, Xero Payroll only works in the UK and New Zealand. However, it can cover the US region if you integrate your Xero account with Gusto (which is also reviewed below). But what is especially great about Xero Payroll is that it is so user-friendly and covers all your basic needs, that you don’t need to worry about getting into all the nitty-gritty details of the new integration. Just switch it on like a new iPhone and start using it!

Why do I need Xero Payroll?

  • It’s super-easy to set up and use: the best option for DIY-adherents;
  • You are doing business in the UK, US or New Zealand;
  • It comes with an open API: in case you don’t find suitable integration, you can hire a developer for specific features development;
  • It has free in-built timesheets.



3. Gusto

While previous apps were more like all-in-one solutions for payroll, accounting, and bookkeeping, Gusto is absolutely different from them. It is focused on full-service payroll and covers all the aspects of that process: from hiring employees to helping them make most of their paychecks. Being a specific payroll tool, Gusto, however, doesn’t ignore accounting and financial analysis of your company. It integrates with both QuickBooks and Xero platforms pretty well, so you don’t need to create custom integrations or add another pet into your software zoo. Personally, for our team, Gusto is the top choice in terms of cost/quality ratio.

Why do I need Gusto?

  • It’s an advanced payroll system, but yet not clunky and user-friendly;
  • You file local taxes and need to calculate them automatically;
  • You’are working with employees benefits: 401(k) retirement, 529 college savings, Commuter benefits, Life and disability, HSA and FSA;
  • Need HR tools (which are included in pricing packages in Gusto).

4. Patriot

Patriot payroll system offers almost the same perks as the previous software from the list, except it is made specifically for a small or growing business. If you are new to payroll, then Patriot would guide you through the whole process in a few steps with a minimum effort from your side. It has no bells and whistles but offers you accurate tax filling, a user-friendly payroll management system, and valuable add-ons for HR and time tracking. Not bad for the starters, right?

Why do I need Patriot?

  • It’s the best option from the list for starters;
  • It has a well-built pay stub feature: easily print it or send a digital copy to employee’s portal;
  • The rollback function allows fixing payroll mistakes independently from the support team with Void Check.
  • It possesses a comprehensive list of reports for analysis (it is really impressive!).

Conclusion

Payroll apps can drastically facilitate payroll management for entrepreneurs. There are a variety of solutions, so you can find what fits your business the best. While choosing the most suitable option, keep in mind that the main goals of implementing any payroll applications are:

  • Proper taxes withheld;
  • Correct filing of tax forms;
  • Remitting taxes on time and to the right agency.

Once you formed a short-list, filter the contenders with the following criteria: 

  1. Offered features
  2. Affordability
  3. Ease of use
  4. Benefits management features
  5. Support and help center quality (can be checked on reviews marketplaces)

That’s it! And what payroll systems do you use or plan to implement?

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Constantin O'Hara

Constantin O'Hara

Constantin is a tech-savvy digital marketer. He is keen on analytics and the comparison of different software solutions. Hiking fan and home chef during his free time.

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