What's up tax savers.
My name is Tyler McBroom.
And we are in the middle of a series
that I am doing with QuickBooks
to educate business owners
on the importance of payroll
and walk through all the elements
of how to make sure they're doing it correctly
for their businesses.
And we're on the third of four videos.
On the first video, we covered
the high level components of what payroll is.
Next, we took a deep dive into some critical tips
and habits you can integrate into your business
to make sure you're staying the most compliant.
And now we're gonna dive into
how to choose a service provider.
So if you've missed those first two,
make sure you go take a look at them right now.
So in case you don't know who I am,
I am the CEO and managing partner
of Measured Results,
a CPA firm in California
that helps businesses all across the country,
pay as little tax as legally possible,
and also figure out where their money is going
so they can increase their profits.
A couple years ago,
we were named an Intuit Firm of the Future.
And I'm so excited to be here with you
and take this deep dive
on how to choose a payroll provider.
So, if you are asking yourself,
or you're searching the internet
for how to choose a payroll provider,
you've probably decided
that you want some help managing payroll.
But what does help look like?
See, this can be a complex decision,
there are lots of things that you have to weigh.
And in this video,
I will be addressing some of the most common questions
and top things that you should consider
for small business owners
and managers who are seeking help with payroll.
So what are some things to consider?
Well, first, what are the core features
of the service you're hiring or the provider
that you're using?
Next, how easy is it to use?
Third, what does it cost?
What is the brand reputation?
Is it a big company or a little guy
that you're hiring?
What are some of the additional services
that are included with the provider.
Things like accounting, HR, health benefits,
and workers' comp.
These are critical, and we'll get into those
in deep detail a little later.
Next, what kind of customer support do they provide?
How easy or difficult is it to switch?
We've all had that issue
where it's a disaster switching.
Integrations, what integrations
and different types of software can be included
and worked into as a one stop shop
with the provider that you're using.
And last, how much control
do you want to have over this process?
That's gonna be a major driver in your decision
Do you want to just do it all yourself
with a chicken scratch and a calculator?
Do you want to use software
but still maintain most of the control
or maybe you wanna use software and just offload it
and make sure that it's all getting done correctly
and automatically.
Or last, maybe you just wanna outsource it completely.
You hire an accountant or a bookkeeper
or another payroll service provider
to just take it off your hands and do it for you.
So those are the kind of the different options
depending on how much control you wanna maintain
over the process.
So we mentioned features at the beginning of that list.
What are some of the core features
that should be included with a payroll solution?
Well, first, it should be automated.
You wanna make sure that the payroll happens
on a regular schedule.
You're legally required to pay your team
on a regular schedule at least monthly.
So you wanna make sure
that the payroll provider you're using
works that into their system.
Next, make sure those taxes and forms,
not just how you're paying your people, is automated,
but also how you're filing
and staying compliant with your taxing authorities.
Make sure that's automated as well,
so that you don't end up racking up
a bunch of penalties and interest.
Third, what sort of mobile time tracking features
are available within the service
and provider that you're using?
We live in a mobile world,
and especially if you have a company
that requires a workforce to be out and about
in different locations.
It's critical that you at least consider
whether or not they have the ability
to track their time mobily.
Next, how soon is the direct deposit available
after you run payroll?
Is that at least next day or ideally available as same day?
Because cash is king, this is really
gonna improve your cash flow.
We talked about in video two,
the importance of keeping a budget
and creating a cash flow forecast,
having direct deposit where you can run payroll
as late as possible to then
have the cash taken out right after that,
allows you to keep your cash in your business,
which helps you exercise power
and have a lot more flexibility.
Next, what about the setup and support?
Is the team that's working on onboarding you
onto the provider
a team of experts?
Or are they just kinda figuring it out
and working through it as they go with you?
Next, having a good culture is important.
And part of that is making it easy for your team.
So do you have a portal?
where your team can kind of log in,
submit their PTO, plug in their time easily,
they're not having to write it all down
on a piece of paper and then go do it after the fact
Having a portal where they can interact with
and track their time easily
is a critical component
and a feature that you wanna consider, as well.
And last, you gotta know your numbers.
So having good reporting features
so that you know where your payroll is going,
what's going to taxes, what's going to wages,
robust reporting features
are definitely an element that you wanna consider
in the overall core feature set that you're looking at.
How about cost?
What is the general cost for a payroll solution?
Well, typically, if you're using
some sort of payroll software,
it usually starts around $20 a month,
and then goes up from there,
depending on what you and your business need
and the features that you're looking for.
And different features drive the cost differently.
So what are some of those features
that drive the cost up or down?
Number one, how many employees do you have?
This is critical because the more employees,
obviously you're gonna spend more
If you have 100 employees,
versus if you only have two employees,
if you've got additional service requirements,
within, you know if you're adding an accounting solution,
that's gonna add more to it.
If you're adding more, you know
all those features above that we discussed,
as you pick and choose more
and more of those features,
versus just a bare bones product.
That's gonna drive the cost up as well.
Next, how much, how tolerant are you
on paying for your own penalties?
There are some providers out there
that at the higher levels of their service,
they'll cover the penalties for you.
And this is just gonna depend
on your own personal tolerance of
you'd rather save the money.
It's kind of like if you buy a warranty
when you're buying a piece of electronic equipment.
If you are the person
who usually doesn't buy the warranty,
you probably won't choose the option
where to cover the penalties.
If you're the person who always buys that warranty,
you probably wanna pay a little more on your service,
your payroll provider,
and then your penalties are covered
if something bad happens.
Next, how much do you love
running that payroll yourself?
And how confident are you that if you run it yourself,
it's gonna be accurate.
So if you're less confident
and kinda just wanna it out of your hands,
you're probably gonna go
with the more robust automated payroll software,
or hiring someone out to do it for you.
If that's something that you really just love doing,
then maybe you'll pick the option
where you're more in the DIY, do it yourself,
lower side of the software,
or most people don't choose the chicken scratch,
but that is an option, too.
Next, how much do you have it all
consolidated in one place.
If you've got all the different
financial management tasks and components -
payroll, accounting, HR, all of that,
where you're getting it all in one place
instead of piecemeal in different service providers.
That, of course, is gonna drive the cost up
'cause you're handling more items in one portal.
So speaking of additional services
and additional financial management tasks,
what are some of those components,
the additional service components?
Well, first, mentioned health benefits.
So some payroll service providers
actually integrate the ability to
pay your health benefits
and provide that directly through the payroll service.
Next, working with your HR
and professional advisors to make sure
you got your HR rules in place,
and that you're staying compliant,
not just from a forms and payment standpoint,
but from an HR policy rule standpoint as well.
Beyond that, there's workers' compensation,
so workers' compensation is a critical component
to make sure you're covered from a liability standpoint
and just a financial protections standpoint,
make sure you've got workers' compensation covered.
So is that worked into your payroll provider?
Or do you have to go separately
and get that through a different provider?
Next, I mentioned that risk tolerance piece.
Are you protected if you do have tax penalties,
or do you have to come out of pocket
and shell the dough out for that
if you miss a deadline? That's a definitely
an additional service factor to consider.
And then, of course, the setup
and switching support, if you're switching.
Payroll is one of those things.
There's no lag in payroll
because if you pay your your team every two weeks,
and you switch payroll providers,
if more than two weeks goes by
and you miss a paycheck, that's a big uh-oh.
So you've gotta make sure
that you've got customized setup and support
through that switching process.
And then of course, are you working
your accounting package in with your provider,
that's that integration piece.
So are you hiring someone to do your accounting?
Are you doing yourself but through software?
And are you working that in with your payroll provider?
And that's a perfect transition into discussing
integrations within your payroll provider.
So many payroll providers have
options to integrate different softwares.
So as an example of that,
what does that look like in real life?
So on QuickBooks Online,
when it kinda first came out,
you could put in your time, however,
you couldn't use a clock or track your time
in a more robust way.
And so QuickBooks went out
and they fully integrated a program called TSheets,
that now allows you to run clocks,
do job costing and do all of that.
And it's integrated in a one stop shop
literally in real time with QuickBooks Online payroll.
And so that's the type of situation
that I mean when I say integration.
So what are some other areas of integration
that you should consider?
And how does it work with your payroll provider or not?
The first one is your accounting system.
Does your accounting system talk to your payroll provider?
That's a critical one.
Next time tracking, I mentioned TSheets.
So TSheets and QuickBooks Online,
work together to allow you to track your employees' time
and then pay them.
Job costing.
That's another element of TSheets,
not to keep hounding that,
but those are critical elements.
So are you able to, in the previous video,
we talked about the importance of tracking
your employees' time, not just for compliance sake,
but for profitability sake.
So do you have a job costing feature
that integrates within your payroll
so that where your money's going
and where your jobs are being more profitable
or less profitable?
Does it integrate with a POS, a point of sale system,
so that you're tracking your time and your payroll
integrated to how you're selling your products.
Next, how about expense management?
So budgeting and knowing
where your money is going is critical.
So in addition to your accounting software itself,
there's also managing your expenses separately
and have their systems that are used to manage that.
So does it integrate with your payroll provider?
And of course, just general business management systems.
If you're managing your workflow,
or different project management,
how does your payroll software integrate
with those business management systems?
Now, why would someone integrate
and want to make sure that they're all working together
in sort of a one stop integration shop?
Well, first, it's gonna save you time,
the more you can do in one place
without having to duplicate
and put an address in here, an address in here,
an address in here.
It's also gonna reduce errors.
And that's two different types of errors.
One is you're not gonna type an address wrong.
It's also gonna reduce tax errors.
If the payroll software integrates
incorrectly with your accounting software,
and when you're doing tax planning,
you have the wrong expense
or your payroll doesn't report properly
to the tax authorities, you're gonna have tax errors
and possibly have more penalties.
So integrating it all into one place
reduces those tax errors.
It also allows for real time data.
If your payroll provider links up
with your accounting provider,
and it does it in real time,
then you can see exactly how much you're paying
in payroll relative to what you're bringing in in income.
The other piece on the job costing side of things.
In real time, you can see where your time is going,
and what that's costing you on different customers
in different jobs.
It's also gonna improve accuracy
as far as the duplications of the different,
having to enter the same thing
multiple times into different softwares.
So that's the integration piece of it.
How about ease of use?
Why is it making it easy so important?
Well, we live in a high paced, everyone's busy world.
So if things get bogged down
because they're difficult or complicated,
or just frustrating, it's just gonna make your life not fun.
So how easy is the payroll solution?
So first, you want to make sure it's easy to get set up
for the reasons we talked about before
Payroll is an ongoing, always running thing.
Then make sure it's easy to actually run payroll,
how complicated is it to plug in hours
or actually get your employees paid?
That's, of course, important to stay easy.
We wanna make sure that it's easy to stay compliant.
We don't wanna get in trouble with the taxing authorities.
We don't want to end up owing a bunch
of penalties or interest.
So you want to make sure it's easy to stay compliant.
Or make sure that it's easy to stay
on top of cash flow.
Cash is king, in good economies and bad
but especially if anything takes a downturn.
We wanna make sure that you're on top of
your cash flow so that you have enough money
in the bank to pay your people.
And so you wanna make sure
that you've got a process that makes it easy
to stay on top of that.
And then, of course, easy to partner with your accountant.
Do they have visibility?
Or do you have to send them PDF reports
every time you run payroll?
And then maybe it's not real time,
you wanna make sure that whatever you're using,
that it's very easy for your accountant
to access it in real time as well.
So part of it being easy is
you've got good customer support.
So when you're talking about customer support,
what should a small business owner look for?
Well, you wanna make sure you can get in touch with them.
So are they accessible for your business?
Can you actually speak to a human?
When it comes to challenging issues,
you wanna be able to speak with a real person
but other times you just wanna be able to go search
and find it yourself?
So do they have a robust help center
that has useful self-serve materials
that allows you to just go find
that really quickly for yourself?
How about the brand of the company that you're hiring?
what are some of the benefits of working
with the larger sort of more well branded,
well known payroll providers?
Well, usually, they have more resources
for that robust customer support
that you're looking for.
They also have a brand that is,
it's out public in the, you know,
in the face of business owners,
so them evolving and improving
and creating regular product improvements
is a critical component to maintaining that brand.
So they're gonna be regularly improving their products.
Next, their brand's on the line with compliants too,
so they're gonna have the resources to make sure
that you're always staying up to date
on that compliance piece of payroll.
And of course, security is critical
when it comes to payroll,
because you're dealing with social security numbers,
sensitive data, what people are being paid.
Actual money, the flow of cash,
so they're gonna be able to provide you
with more robust, concrete data security.
Next, they're not gonna go out of business,
they've been around for a while.
If they're a big brand,
they're most likely gonna go,
and be available in business in the future,
I've got a story about that.
I won a con... When I was a kid,
I won a contest. As part of that contest,
they flew us down to Hollywood.
And we did a couple little Hollywood tour.
And when they put us on an airline,
it was this dinky little airline
that we had never heard of before.
And it was a three day trip.
And during that three day trip,
we came back and we got to the airport.
And it turned out that airline went out of business,
literally while we were down in Hollywood.
And so they didn't offer to send us
on a different airline.
They just gave us the keys to rent a car
and we had to drive home.
And so you don't want to hire the rinky-dink airline version
of a payroll provider.
And then suddenly you pick up the phone
when the next payroll is due,
and you can't get ahold of them
and then you can't get your team paid.
So that's a very important element
of hiring a well branded, well known payroll provider.
So that is the key component to,
a key component element
and components of what you should look for
in a payroll provider.
And if you're a small business,
who's kind of just getting off the ground,
it's yourself for maybe a couple other employees.
QuickBooks Online payroll
has put together an amazing suite of services.
And we're gonna kinda dive into
in the next video,
an overview of that QuickBooks Online payroll,
so it can help you decide
if maybe that's the right service that you should use.
We'll see you on that one.
(upbeat music)