Category: Accounting

Onsite And Offsite Bookkeeping Services

How do bookkeepers get clients?

None of these tactics will help you with your service. Make sure the service you’re offering is awesome to be begin with and clients will start snowballing. If you already have a great service offering, keep reading and I guarantee you’ll find new ways to get more clients.

You may be wondering:

“How do I get bookkeeping clients? How do I get web design clients? How do I get clients for my consulting business? How do I get clients for my IT company? How do I get PR clients? How do I get clients?!?” The tactics I’ve listed here work across all of them! When it boils down to it, the tactics don’t change too much by industry. There are many tried and true methods that work regardless of what field you’re in. Even if you have a marketing consultant or agency taking care of lead generation—it’s still worth reading this post—maybe you’ll see something they missed and you can ask them about it.

Business Strategy

Write and practice your elevator pitch

Just because you’re not a Bay area startup, doesn’t mean you shouldn’t have an elevator pitch. You never know when you’ll have an opportunity to promote your business or run into someone who may need your services. If you can’t clearly communicate what you do and how you’re different—you’re going to have a tough time selling your services.

Pick a niche

You may think that offering services to everybody will land you more clients, but in many cases that’s the wrong mentality. Specializing in one industry can actually be far more lucrative in the long run.

Here are a few reasons why it might make sense to pick a niche:

  • It helps clarify your target market which makes sales and marketing easier and more specific
  • It gives you expert status in that industry which makes your business more appealing to that target market
  • It helps you learn to speak your target market’s “language”
  • It can be helpful for SEO (ex. someone looking for a ‘startup accountant’ will find your business if you specialize it that field)
  • It allows you to build your processes around a single area of expertise which means you can scale faster

 

Online Marketing

The concept of digital marketing or online marketing or even cloud marketing is easy to grasp when we compare it to cloud accounting; it’s simply the use of online marketing channels to enable lead generation and client acquisition.  Yet, when most accountants think about marketing today, they revert to the 1970s methods of direct mail and cold calling. And when they implement those methods, they don’t realize that they risk ruining their hard-earned modern reputation, not to mention paying more for low-quality results.

When today’s clients look for a new accountant or bookkeeper, part if not all of their search occurs online. And that’s where accounting firms and bookkeeping businesses need to be too.

Approaching Prospects

Attracting new clients to your business is a lot like making friends or even dating. It doesn’t happen in one connection; it can take a couple of meetings before you both trust each other enough to commit to building a relationship.  Here are two steps you’ll need to take before you go looking for new clients:

  • Figure out and narrow down who you are looking for.

This means creating a description of your ideal client. While you could get away with marketing to everyone ten or fifteen years ago, it doesn’t work today. Just like you won’t want to be friends with just anyone, you shouldn’t want to take on just anyone as a client. Today, smart marketers and business owners stop and learn why someone wants or needs what they have to offer. They determine the benefits or solutions the prospect is looking for and use that to create a persona or avatar of a category of clients they are looking for.

  • Determine how you will attract the attention of the ideal client you are seeking.

The solution to this is to develop content that catches your prospects’ eyes. The topic of the content should be something that helps the client solve a problem they’re having related to the services you offer.  This can be an accounting problem, a QuickBooks® problem, a payroll problem, a tax problem, or a financial problem. Great content will allow you to get their attention, demonstrate your expertise, and make an initial connection between you and the prospect.

 

Publish Articles

Creative marketing tool, use is the cost-free benefit of publishing tax articles in various publications. This can be a time-consuming task, and it can take quite a while before you see the fruits of your labor. Publishing tax articles has allowed me to develop myself as a brand, while marketing the article on social media outlets to further capitalize on the marketing opportunity. For example, when a publication runs an article, I also publish the article on my LinkedIn network. You publish one time and give yourself the opportunity to be seen and heard by millions of people online. Allowing for some patience and time, this can be a very powerful tool because you have to publish articles frequently to keep yourself fresh and in the spotlight.

Work Your Clients

Marketing strategy that only takes time is marketing throughout the year to my existing clients. Your existing clients are, hands down, the best source of referrals. If you fail to market yourself to your existing clients, you are failing to use the best tool you have at your disposal. I use the publications that I am featured in, and articles that I publish, to market to my existing clients. Not only does it give my clients good content to read and get educated, but it also allows them to view me as an expert, which further enhances the relationship. This also provides an opportunity for existing clients to read an article and share it with their friends, family and acquaintances – more “free” marketing to people who I would not have reached.

The marketing tools I developed have taken years to get to the point where I am able to see a return on investment. Although the investment is very little monetary and mostly time, it’s still an investment; the time could be used to do income-producing work, other meaningful tasks or even enable me to have a life!

 

Word of mouth

We couldn’t say it better ourselves. It’s well-known that accountants win the majority of new clients through referrals. Better yet, these clients are likely to already trust you and make the onboarding process smoother. Although it sounds effortless, word of mouth marketing doesn’t happen by itself. It relies on delivering a consistent service that goes above and beyond for customers.

Ask for referrals

Sometimes, it’s good to go back to basics. Have you asked your clients to refer your services, or indeed made it easy to? If you have a solid and loyal client-base, they’d probably be more than happy to. And even if you’re starting out, they know that business relies on building good impressions. Some quick wins include adding a line to your email signature reminding them or even incentivising them with a thank you gift when they follow through. Which referral systems should you be using? Find out how to make them happen here.

Make the most of your website

Your website is the digital shop-front for your practice, so does it reflect who you are as a business? Whether you choose to create something in-house or outsource it, investing in a world-class website can be a powerful lead generation tool. Say you’re based in Brisbane; the next time someone googles ‘best accountants Brisbane’, you want to be the first link on the search page. To make sure you claim top spot, content is king. Case studies and testimonials are a great place to start, to shine a light on happy customers and show the potential of great bookkeeping.

 

Identify your target clients

Not all clients and prospects are created equal. You can probably put your existing clients in three groups: great, average and not-so-great.

Think about the factors that determine what a great client looks like to your firm:

  • How easy are they to deal with?
  • How much total revenue do they generate?
  • Can you work quickly and effectively with them?
  • How profitable are they?
  • Do they bring positive exposure?
  • Do they create connections to other great clients?

There may be other factors you need to consider. The important thing is that you understand what your ideal clients look like before you start chasing them. Sometimes there are trade-offs involved. It’s not always financial factors that put a prospect on the list. You might be moving into a new area of expertise. You may be prepared to work for less profitable clients while you’re building your reputation.

Or if your firm has a specialty, you may be able to charge a premium. Looking for new clients in the area you specialize in could be a natural and profitable direction for you.

An Overview On Offshore Tax Planning

TAX PLANNING GUIDELINES FOR INDIVIDUALS AND BUSINESSES

The Tax Cuts and Jobs Act (“TCJA”) was signed into law at the end of 2017, meaning the 2018 tax year saw the initial impact of the TCJA and raised many questions regarding the implementation of its various provisions. During 2019, most taxpayers filed their first returns that applied these changes, including those for which no guidance had yet been issued. Needless to say, it was a challenging filing season for all involved.

Throughout 2018 and 2019, our tax professionals have been working diligently with clients to explain the changes, modify client organizational structures, adjust their tax compliance reporting systems, and maximize their available tax benefits. We have addressed such diverse issues as whether or not to make certain elections with respect to foreign sourced income, aggregation elections related to the qualified business income deduction, filing for change in accounting methods, and establishing trusts in states that do not have state income taxes.

We have issued Tax Alerts, held webcasts and had many, many individual conversations and meetings with you to address the impact of the TCJA and maximize the benefits afforded by it. We continue to monitor legislative and regulatory activity and, as always, will share our insights with you. We will also be keeping a careful eye on the upcoming presidential elections, as the outcome could have an impact on future legislation.

This 2019 Tax Planning Guidelines for Individuals and Businesses contains a summary of the current individual and business tax landscape, commentary regarding the TCJA and observations on its impact and the ongoing clarifications from the IRS, as well as considerations for the future

NET OPERATING LOSSES

One of the lesser publicized provisions of the TCJA, the change in the rules relating to Net Operating Losses (“NOLs”) has had a major impact. A NOL is generated when, during any tax year, a taxpayer’s allowable business deductions exceed his/her business income.   This result, modified by certain adjustments, is referred to as a NOL.

 

Tax Plan for Tax Year 2020

Fail to Plan Is Plan To Fail!

There are only a few days left to plan for Tax Year 2019. Start planning for the new Tax Year 2020: January 1, 2020 – December 31, 2020. You pay Taxes with your hard earned money. Taxes can be complicated and stressful, you could waste your money if you don’t properly plan or don’t work with the right people and correct website.

In order to reduce your taxes or increase your tax refund in conjunction with your next tax return, tax planning throughout the year is critical. In addition, when planning for life changing events (marriage, home purchase, career change, etc.) you should also consider the possible tax implications. The same is true for unplanned life changing events, they might have unplanned tax consequences.

help you with tax planning by providing, not only free tools but also asking you relevant questions that could result in your income tax reduction. December 31 is a critical deadline for each tax year, since certain contributions (e.g. medical plan contributions, etc. ) have to be completed by December 31. Furthermore, in the case or a marriage or divorce, December 31 is a critical date when it comes to selecting a filing status. The source or type of income you receive throughout a tax year will also determine your taxable income.

Adjust your paycheck withholding with a Form W-4 so you get your next tax refund now. Do you want your tax refund in your paycheck? Recent IRS statistics show that almost 100 million (or 75%) of all Americans get a tax refund check, and the average refund check is for about $2,400. So why not get some of this refund now as part of your regular paycheck? Every month most taxpayers pay an average of $200 too much in income taxes.

If your income has not changed from last year, use our 2020 Tax Return Calculator. Alternatively, you can use the year-to-date income from your latest pay stub to estimate your expected annual income for the year (keep in mind that the calculator is based on currently available figures which may be subject to adjustment).

 

Personal Tax Planning

With the tax regime becoming more complex, and more focus being put on taxpayers’ individual responsibilities, everyone who is subject to taxation needs professional advice and support if they are to optimise their tax position and ensure they meet all the compliance requirements.

Every pound of income tax you save means more income at your disposal, every well planned disposal of assets means minimal loss of capital gains, and every inheritance tax saving means more benefit for your beneficiaries.

These are a few of the more common questions we get asked by prospective clients considering using our services.

How easy is it to change accountants and why should I change? A: If your existing accountant is offering you an excellent pro-active service at a fair fee then stick with them. However, different accountants will save you different amounts of tax and provide different levels of business advice. If your present accountant doesn’t offer the type of service you want and that we do offer, then changing over to us is very easy. It involves just one letter from you and we take care of everything else for you. Your existing accountant is not usually allowed to charge you for providing the normal handover information.

You seem to offer a lot. Are your fees expensive? A: No! We offer fixed fees linked to the value of what we provide. We’re not always the cheapest and as with many things in life the cheapest is often the most expensive in the long run. However, we are not expensive and we offer excellent value for what we provide. Most importantly we never undertake work without agreeing the fee arrangements in advance so you always know where you stand.

I’ve just had my accounts done and don’t need an accountant until next year, so is there any need to contact you now? A: We can’t over emphasise the importance of tax planning at an early stage, not crisis driven advice. Ideally you do tax planning before the year even starts but after that, the earlier the better. The same is applicable to all areas of advice and we are about helping you change the future, not just reporting what has already happened

 

How to save tax as a couple

You can’t escape paying tax on income, but you may be able to split some of your income with your spouse. And if your spouse is in a lower tax bracket, you’ll pay less tax as a couple

Kim and Henry

Kim, an executive at a health care firm, is the couple’s primary income earner, and Henry is a self-employed photographer. The couple saves tax in several ways, all involving investments.

If Kim simply gave money to Henry to invest, as a way to pay less tax on income and returns, attribution rules would pass the tax bill back to Kim. But she uses a prescribed rate loan. Kim loans $100,000 to Henry that she received as an inheritance. She charges Henry interest at the government’s prescribed rate, currently 2%, and investment income is taxable to Henry at his lower rate. It takes a large loan like this and a significant difference in marginal tax rates for the strategy to be worthwhile

Mark and Laura

Mark owns an event planning business. His wife, Laura, has been working part-time to bring in new business, largely through social media. She is paid by the company with dividends taxed at her personal rate. But when the new Tax on Split Income (TOSI) rules took effect on January 1, 2018, their previously acceptable income-splitting arrangement was in jeopardy. Laura worked fewer than 20 hours per week, which subjects her dividends to tax at the highest marginal rate

The couple had a decision to make – switch payment to salary, which is not subject to the TOSI rules, or meet the new requirements. They prefer the relative simplicity of dividends over the paperwork that salary involves. So Laura now works a minimum of 20 hours per week and continues to receive tax-friendly dividends. The couple still benefits from income splitting and Laura keeps time records to demonstrate they are onside of TOSI rules

 

most powerful postmortem planning pointers for trusts and estates

After a client passes away, there is much more to do than just prepare a final Form 1040, U.S. Individual Income Tax Return. Taking control of the postmortem planning process can be a powerful way to save tax dollars for the decedent’s estate and family. Postmortem planning also applies to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return; state death tax returns, if needed; and income tax returns for the estate and any revocable trusts set up during life

Select a Fiscal Year End for the Estate

The assets that earned income during a client’s lifetime will continue to do so after his or her death. Until the estate distributes those assets to beneficiaries, an estate income tax return will need to be filed each year, generating a Schedule K-1 to each residual beneficiary to the extent distributions are made. Using a fiscal year end can be a powerful tool to defer tax on that income and allow beneficiaries time to plan for its inclusion in their personal returns. Any of the 12 month-end dates that follow the decedent’s death can be the fiscal year-end date, but the year cannot exceed 12 months.

Elect to Include Income Earned in the Decedent’s Trust on the Estate’s Income Tax Return

Trusts are required to use a calendar year end. However, a tax adviser can elect to include the income from a decedent’s qualified revocable trust on the estate income tax return. Doing that provides an array of benefits not normally available to trusts, the most significant of which may be the ability to use the estate’s fiscal year end for trust income. This election lasts two years beyond the decedent’s date of death (longer if a Form 706 is required to be filed; consult the instructions to Form 8855, Election to Treat a Qualified Revocable Trust as Part of an Estate), which is normally plenty of time to deal with closing out a trust. Known as a Sec. 645 election, it is made by filing Form 8855 with the Form 1041. This election can be made even if there are no income-producing probate assets in the estate.

Manage Distributions to Minimize Overall Tax

Estate and trust income taxes reach the highest tax bracket of 35% at $11,650 of taxable income for 2012. If residual beneficiaries are in lower brackets, it will save tax for the family overall to distribute income out of the estate to them in a timely fashion. The fiduciary has until 65 days after the end of the tax year to make distributions for that tax year. Capital gains stay at the Form 1041 level and are taxed there, except on a final return

Prepare Form 1041 on the Accrual Basis

Excess deductions over income on an estate Form 1041 do not carry over to the next year and therefore are wasted (except on a final return; see below). If the fiduciary finds that the estate has paid large expenses without much income during the first year or, as is more often the case, the estate has ample income but will not pay related legal and administrative expenses until later, the fiduciary can prepare Form 1041 on the accrual basis and accrue the income or expenses into the current year

Must Use Tax Planning For Your New Company

How to Start Tax Planning

Start a filing system

Start a filing system to organize your documents. Any successful tax planning strategy requires you to maintain records of all transactions and receipts that may affect your tax return. This helps to keep track of important documents and avoid forgetting about transactions that occur months before the tax filing deadline.

Understand tax deduction requirements

Before you get too far along in the tax year, you should evaluate all available IRS deductions and the requirements to claim them. By doing this beforehand, you can be proactive in preparing to claim a deduction at the end of the year.

Evaluate the tax credits offered

Tax credits offer a significant opportunity to save money on income taxes since they reduce your actual tax bill on a dollar-for-dollar basis. The types of tax credits offered each year change more frequently than deductions. Credits are often available for a limited time and cover specific types of expenses.

Use an IRA

Use an Individual Retirement Account (IRA) instead of a savings account. Many taxpayers put their savings into a typical bank account that earns taxable interest. However, you can avoid paying tax on the interest each year by depositing money into a traditional IRA instead where the interest will accumulate tax-free. When you do, you might also be also eligible to claim a deduction each year for a certain amount of contributions you make to the account.

 

Good tax planning includes good recordkeeping

Taxpayers should develop a system that keeps all their important info together. They can use a software program for electronic recordkeeping. They could also store paper documents in labeled folders.

Throughout the year, they should add tax records to their files as they receive them. Having records readily at hand makes preparing a tax return easier.

It may also help them discover potentially overlooked deductions or credits. Taxpayers should notify the IRS if their address changes. They should also notify the Social Security Administration of a legal name change to avoid a delay in processing their tax return.

Records that taxpayers should keep include receipts, canceled checks, and other documents that support income, a deduction, or a credit on a tax return.

Taxpayers should also keep records relating to property they dispose of or sell. They must keep these records to figure their basis for computing gain or loss.

In general, the IRS suggests that taxpayers keep records for three years from the date they filed the return.

 

What Is a Tax Advisor and How Do You Choose One

Enrolled agents

Specially trained enrolled tax agents must pass a rigorous test and meet annual industry regulatory requirements to meet and sustain their professional credentials. Enrolled agents are licensed by the federal government, and are fully approved to represent clients before the I.R.S. They also provide general consumer and business tax services like preparing income taxes and offering specialized tax planning advice.

Certified public accounts (CPA)

A certified public accountant shares many of the same attributes as an enrolled agent, but with a key distinction. While enrolled agents are licensed by the federal government, a CPA is licensed by the state where they set up shop, and must complete 150 hours of undergraduate and/or graduate school study and clear a CPA test given by the American Institute of CPA’s

How to Find a Tax Advisor

No matter which type of tax advisor you choose, finding one isn’t difficult. You can either opt for word-of-mouth (asking co-workers, neighbors, family and friends for recommendations) or through industry trade groups.

Coronavirus Market Update

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Make sure to vet your tax advisor

Unfortunately, there’s been an uptick in shady, fly-by-night tax preparers in recent years. So, job one is to thoroughly research a tax advisor. Ask for professional credentials and references – any tax advisor who can’t deliver on either front should be dropped from your list. Also, check your local Better Business Bureau for any record of complaints against a specific tax advisor.

 

Tax Preparation Tips Every Entrepreneur Should Know

Hiring employees vs. hiring subcontractors

Your business is ready to bring on employees, but should you pay them as W-2 employees or 1099 subcontractors? It’s a good question, and one Seaman is asked a lot. Freelancers work in their own environment and are hired on a project-by-project basis. Employees work regular hours, which are dictated by the company, and receive regular checks. If you get the two mixed up, you could be in for a big surprise, Seaman says.

Keep your accounts separate

No business owner is 100 percent sure if the business will float when it firsts opens, but that’s no excuse to run your business from your personal bank account. When you start a business, get a business checking and savings account and make sure business income and expenses come out of the business account, Seaman says.

Get your payroll straight

From income tax to Social Security, the IRS gets a little touchy if you’re not paying your dues. There are a lot of tax forms and scheduled payments that come with employees, so it’s important to understand the ins and outs of payroll, Seaman says.

Take a startup deduction on taxes

The expenses you rack up while preparing to start a business can be used as a tax deduction, Seaman says. “Be sure to take the allowable deduction for a startup,” she reminds entrepreneurs. “You can deduct up to $5,000 of research and development and startup costs.” Research and development deductions can include investigating whether or not the business idea is viable, training employees, and ordering supplies

Claim depreciation

You can claim the wear and tear or deterioration of business items over time. For example, you can claim the depreciation on your business computer or the fleet of company cars. According to the IRS, tangible items like buildings, machinery, vehicles, furniture, and equipment are depreciable. Intangible property like patents, copyrights and software is also depreciable. You can claim depreciation of property over time to help your tax situation a little each year, or you can take it in one lump sum

 

Great Year-end Business Tax Planning Tips

How the 2017 Tax Changes Affect Year-end Tax Planning

The 2017 Tax Cuts and Jobs Act (the “Trump Tax Cuts”) should be a factor for your business tax planning for the 2018 tax year and beyond.First, take a look at the new 20 percent deduction from net business income that’s available to small businesses. There are some restrictions and limits.  Second, look at the deductions and credits that are no longer available, like the deduction for entertainment expenses.

Save on Taxes by Stocking Up and Pre-Paying

As mentioned in Step One, you can increase expenses (and lower profits) by stocking up on inventory and supplies and pre-paying expenses. If you have any cash sitting around, or you can reasonably use your credit line or a business credit card for purchases, stock up on supplies

Save on Taxes by Setting Up a 401k Plan for Employees

If your company will be profitable this year, and you have some excess cash, you can save on taxes by setting up a 401(k) or Safe Harbor 401(k) for yourself and your employees. Even if you have a sole proprietorship, you can still use a 401(k) to set aside money for your retirement and save on business taxes. In fact, the process is easier with no employees, because there are fewer rules.

Write off Bad Debts to Save on Taxes

Bad (Un-collectible) debts can be written off before the end of the year and the uncollected debts can be used to lower your profits

Writing Off and Writing Down Obsolete Equipment and Inventory Can Save on Taxes

Obsolete, damaged, or worthless equipment can be taken off your accounting records to increase your expenses and lower your tax liability

Must Learn To Use Payroll Service In Your Company

Small Businesses Relying on Online Payroll Services

Today, online payroll software is the payroll system of choice for small business owners. It’s affordable, easy-to-use, and can grow with your business.

Accurately Pay Employees and Deduct Payroll Taxes With Online Payroll

The first and most important advantage of online payroll is being able to accurately pay your employees. Both employees and employers can enter hours into the software. You provide payroll information about each employee – like their wage, salary, overtime rate, and other unique data. Then, the software calculates payroll taxes and deducts those from the paycheck.

Payroll taxes vary from state to state and payroll software is guaranteed to be accurate no matter where you are (and yes, payroll software is available in many countries outside the United States as well).

 

How to process payroll with a payroll service:

Just like with the DIY option above, you need to have all your employees complete a Form W-4 and find or register for Employer Identification Numbers.

From there:

Step 1: Choose a full-service payroll provider. If you’re not sure how to do payroll yourself, use payroll software that reduces the risk of errors or fines. Many payroll processing services, like Square Payroll, handle your payroll taxes, filings, new hire reporting for you, and allow you to complete payroll online. Sign up takes minutes — so you can quickly start doing your own payroll the same day you sign up.

Step 2: Add your employees. You need to set up your employees before you process their payroll. Adding employees you’re paying for the first time is generally quicker; if you’re switching to a new payroll provider, then you also need to add your current employees’ year-to-date payroll information. Either way, you generally need to enter employee names, addresses, Social Security numbers, and tax withholding information. If you’re using Square Payroll and would like to pay employees using direct deposit, you can just enter your employees’ names and email addresses so they can enter their personal information themselves.

Step 3: Track hours worked and import them. The U.S. Department of Labor requires employers to keep track of wage records such as timecards for up to two years. Certain states may have longer retention requirements; be sure to check the specific requirements in your state. You can track time using your Square Point of Sale and import the timecards to payroll.

 

Manually do calculations

When you manually run payroll, you have full control over your payroll. You know when and how your payroll is completed. But doing payroll yourself likely means you don’t have someone to check your calculations. Doing payroll manually has an increased chance of errors—and errors are often followed by fines.

Doing payroll by hand also takes a lot of time. You have to do all the calculations, distribute wages, and file taxes. You could spend a lot of time working on payroll instead of working on your business.

There are many steps to follow for manual payroll:

  1. Gather information
    1. Find all business information related to payroll, such as your EIN and tax rates.
    2. Collect employee information, such as pay rate and withholding information (e.g., Form W-4).
  2. Track time
    1. Use an attendance management method to track employee time. Or, you could have employees track their own time.
  3. Calculate payroll
    1. At the end of each pay period, use employee time cards and the rate of pay to calculate wages.
    2. Make sure you include all types of compensation, including any tips and overtime for the pay period.
  4. Subtract deductions
    1. Begin by subtracting pre-tax deductions.
    2. Then, deduct employment taxes.
    3. Finally, withhold post-tax deductions.
  5. Pay employees
    1. Distribute paychecks to employees using your designated method. You can pay employees with checks, direct deposits, or pay cards.
  6. Pay taxes
    1. You will periodically have to file and remit employment taxes. How often you do this depends on your depositing schedule and form due dates.

 

The 5 Best Payroll Options for Small Businesses

Did you know that 1 in every 3 small business owners gets penalized by the IRS for payroll errors?

Those fees and fines add up. When you add on the extra time and energy of figuring out the complicated payroll system, it suddenly doesn’t seem like a great place to cut costs. That’s why many small business owners choose to pay for a payroll service instead. That way, you won’t need to worry about legal mistakes, clerical errors, or wasted time.

Here are five of the best payroll options for small businesses:

  1. Intuit Payroll

Looking for the barebones when it comes to payroll services? Or do you want a fully-automated, everything-but-the-kitchen-sink payroll service instead? No matter where you fall on that spectrum, Intuit Payroll has an option for you.

Intuit Basic, for $20/month plus $2 per employee/month, will run your payroll instantly and calculate your taxes (but won’t go as far as filing those taxes for you). Their most popular package is called Enhanced, $31.20/month, which adds tax form completion, filing, and payment on top of that. And finally, their Full Service option will run payroll entirely, transfer data from other payroll services, and guarantee its accuracy — for just $79/month.

  1. OnPay

OnPay doesn’t have all the tools and add-ons that Intuit offers, but in exchange, it provides a simple pricing model with the straightforward payroll necessities that especially small small businesses need.

For $47.95 per month, you get up to 10 employees’ worth of unlimited pay runs, tax filings and deposits in one state (with additional states running you extra), and check printing. It’s an easy, quick, mobile-friendly system that doesn’t require a steep learning curve.

  1. Gusto

Gusto, previously known as ZenPayroll, is an intuitive payroll service for any sort of small business. PC Magazine named Gusto its payroll service of choice for a reason: after its one-month free trial ends, Gusto costs only $39/month, plus $6 per month per employee. That includes benefits planning, direct deposit and check services, and more.

  1. Namely

While it has an undisclosed price, Namely offers a full suite of payroll and HR tools to help you cut down on wasted time. It will automatically carry out benefits deductions, pay and file all of your payroll taxes, handle year-end reporting and time-tracking, ensure your small business is compliant with regulations, and give employees access to their paycheck histories.

  1. Sage

Like Intuit, Sage also offers different payroll packages depending on how big your small business is. If 10 or fewer employees, Sage Payroll Essentials comes in at the low price of $49.95/month. (For comparison, Intuit’s Enhanced plan would run you around the same price with fewer features.)

 

10 Steps to Setting Up a Payroll System        

Here are 10 steps to help you set up a payroll system for your small business.

  1. Obtain an Employer Identification Number (EIN)

Before hiring employees, you need to get an employment identification number (EIN) from the IRS. The EIN is often referred to as an Employer Tax ID or as Form SS-4. The EIN is necessary for reporting taxes and other documents to the IRS. In addition, the EIN is necessary when reporting information about your employees to state agencies. You can apply for an EIN online or contact the IRS directly.

  1. Check Whether You Need State/Local IDs

Some state/local governments require businesses to obtain ID numbers in order to process taxes.

  1. Independent Contractor or Employee

Know the Difference. Be clear on the distinction between an independent contractor and an employee. In legal terms, the line between the two is not always clear and it affects how you withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment taxes.

  1. Take Care of Employee Paperwork

New employees must fill out Federal Income Tax Withholding Form W-4. Your employee must complete the form and return it to you so that you can withhold the correct federal income tax from their pay.

  1. Decide on a Pay Period

You may already have a manual process for this, but setting up a pay-period (whether monthly or bi-monthly) is sometimes determined by state law with most favoring bi-monthly payments. The IRS also requires that you withhold income tax for that time period even if your employee does not work the full period.

  1. Carefully Document Your Employee Compensation Terms

As you set up payroll, you’ll also want to consider how you handle paid time off (not a legal requirement, but offered by most businesses), how you track employee hours, if and how you pay overtime, and other business variables. Don’t forget that other employee compensation and business deductibles such as health plan premiums and retirement contributions will also need to be deducted from employee paychecks and paid to the appropriate organizations.

  1. Choosing a Payroll System

Payroll administration requires an acute attention to detail and accuracy, so it’s worth doing some research to understand your options. Start by asking fellow business owners which method they use and if they have any tips for setting up and administering payroll. Typically, your options for managing payroll include in-house or outsourced options. However, regardless of the option you choose, you – as the employer – are responsible for the reporting and paying of all payroll taxes.

  1. Running Payroll

Once you have all your forms and information collated, you can start running payroll. Depending on which payroll system you choose, you’ll either enter it yourself or give the information to your accountant.

  1. Get Record Keeping Savvy

Federal and some state laws require that employers keep certain records for specified periods of time. For example, W-4 forms (on which employees indicate their tax withholding status) must be kept on file for all active employees and for three years after an employee is terminated. You also need to keep W-2s, copies of filed tax forms, and dates and amounts of all tax deposits.

  1. Report Payroll Taxes

There are several payroll tax reports that you are required to submit to the appropriate authorities on either a quarterly or annual basis. To get more information, visit the IRS’s Employer’s Tax Guide, which provides clear guidance on all federal tax filing requirements. Visit your state tax agency for specific tax filing requirements for employers.