When my husband and I hired our first employee at our Web development company, we had it easy when it came to doing payroll. We were already long-standing clients of a local CPA firm, so we were able to provide it with the information and simply hand over the entire process.
Many other entrepreneurs, however, face a harder road. How hard exactly? To give you some idea, the U.S. Small Business Administration has a Web page dedicated to "10 Steps to Setting Up a Payroll System." These steps include such things as obtaining an Employer Identification Number (EIN) and educating yourself on the difference between an employee and an independent contractor. And that's all long before you even get to the final step of reporting payroll taxes.
If you're confused by the payroll process, there are a variety of options for payroll assistance. Gavin Dennis is the owner of the Charlotte, N.C., franchise of Payroll Matters. He urges entrepreneurs to consider the hidden costs of doing it yourself: "Even with just a few employees, running payroll each month can be time-consuming. There are so many details involved, most business owners would be better off handing this task to an expert and focusing on doing what they do best instead."
Dennis also believes that professionally managed payroll leads to happier employees. "Even for those clients who we only know over the phone, there's a tremendous benefit in dealing with same person every time, who knows your name and understands your business," he says. "And, should the need ever arise, we're just a short drive away."
In addition to local payroll services, there are several online payroll solutions. These include familiar names such as Intuit's QuickBooks Payroll, and new entrants such as Zenefits and ZenPayroll.
Zenefits can help you set up your first payroll and integrate with an existing payroll service you may already be using, such as ADP.
ZenPayroll costs as little as $29 per month (for one employee, and $4 for each additional employee). It operates in 12 states. ZenPayroll is also a part of Intuit's Apps.com platform and recently announced plans to integrate with TSheets online time-tracking software.
And if you're about to go on a hiring frenzy, you may want to check out the newest kid on the block, New York-based Namely, which offers payroll and benefits automation as part of its soup-to-nuts product, which includes human capital management, performance management, and employee engagement. The company was founded in 2012 and serves high-growth clients such as Vimeo, Gawker Media, Mashable, Warby Parker and Birchbox.
ABOUT THE WRITER
Jennie Wong is an executive coach, author of the e-book "Ask the Mompreneur" and the creator of the product quiz website www.ABorC.com. Email her at TheJennieWong(at)gmail.com.