Payroll For Small Businesses: What You Need To Know About Getting Started

Payroll for small businesses can be an unsettling task that leads you to the crossroad of either learning how to do it yourself or outsourcing it to an expert.

Payroll is the act of processing payments for employees through wages, bonuses, salaries, taxes, deductions, allowances, calculating net pay, and other processes.  

These are a few things you need to analyze and conduct for payroll in your small business. After you learn these easy ways to do payroll, then your business can be in a better position to thrive. 

In this blog, we are going to dive into how to do payroll for small businesses to give insight into the area. 

How To Conduct Payroll For Small Businesses?

When doing payroll for small businesses, it can seem daunting and tedious, but there are some basic payroll activities you can conduct. 

  1. Collect Information On Employees: By getting all the employee information of name, address, social security, tax withholding, and other employee documents. 
  2. Identify employee work hours: You may need to see what every employee’s hours are from part-time, full-time, hourly, contractor, to salary base. 
  3. Taxes: You will need to calculate taxes to see how much withholding taxes your employees need involving federal income tax, social security tax, and medical tax. State and local taxes may be needed in this area. 
  4. Payroll: Begin processing payroll by creating paychecks and other fundamental requirements.

With the basics understood, let’s explore a handful of options on how to move forward with getting payroll performed consistently correct.

What’s A Simple Way To Conduct Payroll For My Small Business?

The most simple way to conduct payroll for your small business is to outsource the task to a company specializing in providing custom business accounting solutions.

Top 2 Bottom Business Solutions provides a stress-free simplified method of conducting payroll to empower you to focus on your business.

  • Employee setup
  • Direct deposit setup and processing
  • Electronic tax payment setup
  • Retirement plan setup, reports, and payments
  • Issue paychecks and stubs
  • Payroll adjustments/corrections
  • Garnishment deductions and payments
  • Monthly, quarterly, and annual payroll tax compliance
  • W-2 preparation and related year-end filing

This is a short list of some of the payroll services Top 2 Bottom Business Solutions offers to simplify the way you conduct payroll.

For an easy smooth seamless transition in outsourcing your payroll, Top 2 Bottom Business Solutions and their expert support staff are available to help

Should I Do My Own Payroll As A Small Business Owner?

As a small business owner, if you have the extra time to manage payroll, then it’s typically the best place to start.

As your company begins to grow and become more complex, you may need to hire an expert to free up your time.

Hiring an experienced service provider with a solid understanding of payroll tax laws, regulations, and calculations can ultimately say you time and money in the long run while avoiding potentially costly mistakes.

Since payroll can be a time-consuming task, outsourcing this so you can focus on the areas of business that are more valuable for your attention may be more beneficial.

With business growth comes more complexities and compliance requirements. These ongoing requirements can be challenging to consistently stay up-to-date with tax law and other legal requirements.

Does QuickBooks Offer Payroll Activities?

Yes, QuickBooks offers full-service payroll capabilities on all of their online plans.

They offer three different plans that you can choose from to best fit the needs of your business.

QuickBooks full-service payroll features include.

  • Unlimited payroll runs
  • Paychecks and taxes calculated
  • Employee workforce portal
  • Reports
  • Integrated employee health benefits

The higher-tier plans, Premium and Elite, offer a direct deposit on the same day, whereas the lower-tiered Core plan provides next-day direct depositing.

Should I Use QuickBooks?

While your company is small and manageable, QuickBooks can be a quick method for any small business owner to handle the fundamentals of payroll and automate certain tasks to save time and reduce the risk of error.

QuickBooks is a widely used accounting software that offers a wide range of features designed to help you manage business finances.

What makes QuickBooks a desirable option for many small business owners is its ease of use and user-friendly interface that makes it relatively simple for a non-accountant to navigate their finances.

Since QuickBooks has three tiers on the services it provides, this software can continue offering your business solutions as it continues to grow larger.

Due to the seamless integrations with third-party applications and its cloud-based option, you’re able to more easily scale as your needs arise.

Some of the downsides of QuickBooks is that it’s a bit more costly than other accounting software services.

Furthermore, even though QuickBooks is very user-friendly, it still has a learning curve that requires training to get a handle on some of its features.

Certain types of business may be restricted with QuickBooks due to some of its customization limitations. 

The limitation can easily be overcome by consulting with an industry specialist who can help you create a customized or highly specialized solution.

How Hard Is Payroll To Learn? 

Learning the ins and outs of payroll and the various software that manages each area can be challenging and time-consuming.

For smaller businesses, you may not have too many complicated payroll needs and you might be able to get by with learning the fundamentals.

The primary challenges that make learning payroll a bit more complex are accounting, taxation, and understanding and also applying up-to-date regulation requirements.

A few key aspects to quickly learning payroll include.

  1. Tax law and regulation
  2. Employee classification
  3. Calculating pay
  4. Deductions and withholdings
  5. Record keeping and reporting

These are a few basics of payroll that can quickly help you get jump-started on easing the learning curve.

A few more shortcuts to making learning payroll easy involve, using payroll software, joining a professional association (American Payroll Association), consulting with a professional to answer any specific technical questions, and utilizing online resources and courses.

Final Thoughts About Payroll For Small Businesses

Payroll is a critical aspect of running a small business and can require a fine toothcomb to properly handle all of the tiny details that, if missed, may result in an expensive and timely penalty.

Start-ups and smaller businesses can get by on their own using manual calculations or specialty payroll software like QuickBooks for making sure employees are paid accurately and on time, while also staying current on tax laws and regulations.

When starting out, it’s vital to prioritize accuracy and compliance and then slowly start automating each task where ever possible for routine tasks to reduce the risk of error while saving time.