If you run a small business, one of the most important decisions you face is selecting the right payroll service. After all, as difficult as choosing a payroll solution is, transitioning to a different solution is even more difficult.
That's why it's important to get it right the first time. And while price is certainly a factor, the cheapest solution isn't always the best.
Capabilities aren't the issue either. Pretty much any service you choose can process payroll and calculate tax liabilities. The differentiators are customization, automation and reporting. Based on those criteria and my experience, I've narrowed the search down to what I consider the three best choices.
Intuit Full Service Payroll ($100 per month + $2 per employee)
Business owners know Intuit best for QuickBooks, but the company also offers this strong payroll solution. My recommendation comes with a caveat, however: Use the "Full Service" version only. The others require filing and paying taxes manually. Paying a little extra to take that responsibility off your plate is well worth it.
- Customization: I haven't found many businesses that need custom features that Intuit doesn't provide, from compensation methods to payroll frequency to deductions.
- Automation: For obvious reasons, Intuit Full Service Payroll integrates directly with QuickBooks. The general ledger mapping is very simple, and the accounting and payroll functions are so intertwined that they act as a single solution.
- Reporting: The reporting module is simple yet robust.
- Drawbacks: Intuit Full Service Payroll doesn't withdraw tax payments until they are due, which can be three months after payroll is processed. Although some business owners love hanging onto their cash as long as possible, it can cause havoc when several thousand dollars of taxes suddenly come due from prior payrolls. Most businesses I work with prefer to have all payroll liability handled as soon as they pay their employees.
Gusto Payroll ($39 per month + $6 per employee)
Gusto is much newer than the other two on my list, but has made significant process and continues to improve. It's been a very good solution for many of my clients. The basic fee is low, though the per-employee cost is higher — something to consider if you're planning for substantial growth. I typically recommend it for companies that intend to have no more than 10 employees.
- Customization: I'll be honest — it's weak. I often have to come up with workarounds.
- Automation: Gusto automatically syncs with QuickBooks Online and a few other popular online accounting platforms. It also allows you to establish automated payroll that will run each period based on your company's payroll setup.
- Reporting: Solid, but not as robust as Intuit. You can always find what you need, but it might take some digging.
- Drawbacks: I wouldn't use Gusto for a more complex business that requires extra bandwidth from the payroll provider. I recommend it all the time for small businesses, but that's all I recommend it for at this stage of its development.
ADP Run (price varies)
ADP Run is by far the best solution for small businesses. They were the original innovators in this space and continue to be the industry leader.
- Customization: Best in class.
- Automation: Best in class.
- Reporting: Best in class.
- Drawbacks: As with most things in life, the best solution is also the most expensive. So, yes, ADP is pricey. But if you can afford it, it's well worth it. In fact, I got so tired of my clients settling for lesser products because of price that I partnered with ADP to discount the price to a level competitive with the other solutions. Because I think having the best available payroll solution for your small business is that important.
The Expertise You Need
Evaluating and comparing all the payroll solutions out there would be quite a task. How do you know which one is right for your business? Working with a bookkeeping and accounting services provider like Supporting Strategies can help. We can assess your options and make recommendations based on your goals and budget.
Feel free to contact me if you have any questions on this topic!