Payroll

October 30, 2020

Gusto VS Zenefits Comparison: Which Is Better?

	Gusto	Zenefits
Features	Excellent	Good
Pricing	Starts at $19/month + $6/month per person	Starts at $8/per employee per month
Ease of Use	Excellent	Excellent
Customer Support	Excellent	Fair
Reviews & Complaints	Excellent	Good
Integrations	Good	Poor
Best For	Small businesses looking for easy-to-use benefits administration and payroll processing	Small- to medium-sized businesses that need to scale their HRMS, BA, and payroll solutions with company growth
	Start Trial Read Review	Visit Site Read Review

Gusto and Zenefits stand out among other payroll and HR processing software apps as two of the most popular solutions. High-quality software solutions that streamline your businessâs processes usually include helpful features and competitive pricing, which both Gusto and Zenefits have in spades. But, which one of these products suits you and your business needs the best? This article provides you with definitive conclusions on the showdown between Gusto VS Zenefits.

Gusto VS Zenefits

Gusto focuses on payroll processing and benefits administration (BA), while Zenefits boasts a strong HR management system that bundles together companiesâ HR and employee data. Smaller businesses will enjoy Gusto’s simple interface that can handle 1099 contractor payroll as well as payroll for W2 employees. However, these companies can consider Zenefits as they grow and need to refine their HR management processes. Use Gusto for simple payroll and BA processing, but consider Zenefits for better business scaling and HR features.

Itâs clear that each of these software solutions has clear strengths that shine in different business niches. But how can you determine what your company needs the most from a payroll app? Before you choose between Gusto and Zenefits, it’s helpful to learn more about their best and most prominent features — and the companies theyâre most targeted towards.

Letâs compare each product in detail to see which one makes the most sense for your business.

Gusto Overview

Gusto combines processes to manage payroll, new employee onboarding, and benefits administration into one sleek package. Businesses that are especially new or staff fewer than one-hundred employees are best off with Gustoâs âCoreâ — or lowest-priced — tier package. This is because Gusto was initially created to simplify HR and payroll processes for startup and small businesses.

Gusto’s 401(k), HR, benefits administration, and new hire onboarding services all use a platform that exists on the cloud. This cloud platform automates services like Gusto’s AutoPilot payroll process. This process saves literally countless hours on payroll calculations, deductions, and withholdings. Other services that Gusto offers to streamline your business’s processes include options to file taxes and communicative, highly rated customer support.

Gusto makes itself available to business owners nationwide in every state. If your business happens to staff employees across various states in the U.S., Gusto can also support them as a platform. Gusto does limit its health benefits capabilities to certain states, as well as its reporting and time-tracking capabilities.

Pros

Highly rated customer support
Excellent integration with business platforms
âOne-stop shopâ employee dashboard
Cloud-native automated payroll processes
Transparent pricing with zero hidden fees

Cons

Health plans limited to certain U.S. states
Limited reporting and time-keeping capabilities
Poor scalability with company growth

Zenefits Overview

Zenefits, like Gusto, uses a cloud-based platform to offer its services to business owners. But Zenefits targets more medium-sized businesses that are looking to grow even larger.Â Zenefitsâ bread and butter is its HR and benefits administration service, which it wraps up nicely in an easy-to-use, intuitive interface.

Launched in 2013 as a San Francisco startup, Zenefits has used a software-as-a-service business model to centralize its services for businesses’ off-the-shelf use. A SaaS model works best for growing businesses that need a smarter method of streamlining the way they process HR and benefits administration. This still holds true for smaller businesses, although Zenefits isn’t valid for use if you staff fewer than five employees.

Pros

Completely cloud-based platform
Excellent HR and BA capabilities
Easy-to-use mobile app version
Package tiers scale well with company growth
No base rate for any pricing tiers

Cons

Invalid for extremely small (<5 employees) businesses
Requires purchase of payroll processing add-on
Benefits features limited to 26 states

Features

The main, eye-catching features of Gusto and Zenefits are similar, but there are several key differences. Both platforms have easy-to-use interfaces that allow for customizable features and a range of services. Gusto tends to dominate the payroll processing side of the feature battle, whereas Zenefits is in its greatest element with HRMS and HR data connectivity capabilities.

Gusto’s payroll processing solution comes built-in, whereas Zenefits requires its users to pay an additional amount for a new module. Zenefitsâ payroll services are also a relatively new addition to its suite of tools, whereas Gustoâs payroll solution is much more mature and arguably more robust.

Time-Tracking

Zenefits slightly edges out Gusto when it comes out to tracking employees’ time worked. Gusto’s two, higher-tier ‘Complete’ and ‘Concierge’ plans do offer basic time-tracking capabilities. But Zenefits links time-tracking capabilities directly to its payroll systems, which allows for a more seamless way to pull information for the end-user.

Reporting

Zenefits is the clear winner when it comes to reporting capabilities. Its “Business Intelligence” reporting system allows access to about 50 premade reports based on categories like HR, attendance, and benefits, which are simple to access and use. Gusto, on the other hand, offers relatively barebones reporting services with just 11 premade reports. Gusto does offer basic reporting tools for payroll journals and summaries but lacks the advanced and customized reporting system that Zenefits boasts.

Paid Time Off (PTO)

Both Gusto and Zenefits allow for paid time off policies on any plan, although some options are only available under certain plans. Gusto only allows you to add in holidays if you’ve purchased their ‘Complete’ or ‘Concierge’ plans, which are also necessary for employees to request paid time off directly from their program portal.

With Zenefits, vacation and sick days are available under all plans, but you need to be using Zenefitsâ payroll add-on to set your sick and vacation days as well as accrued sick and vacation days.

Benefits Administration

Benefits administration is typically simpler and more straightforward with Gusto, which lets you view the benefits you already offer employees, the ones you don’t, and the ones you’re enrolled in. Gusto manages all BA tasks in one location to make it easy to manage your benefits. Zenefits, however, will charge additional fees to merge your BA with its program if you already use a broker. If you don’t already use a broker to administrate your benefits, Zenefits does let you connect with a broker to compare plans and choose your coverage.

Employee Portal

Zenefits’ employee portal stands out by offering a desktop as well as a mobile app version for employees. Zenefits’ portal merges company HR features with its HRMS for ease of access to all HR data. Gusto does not offer a mobile-based employee portal, but still provides an easy-to-use dashboard for employees, complete with a sidebar navigation pane.

Pricing

Both Gusto and Zenefits do a great job of being transparent and up-front about their pricing options. With Gusto, business owners can choose between three tiers of plans that steadily increase the per-month/per-person rates. Zenefits’ per-employee rates are higher, but are incredibly easy to understand and offer a free 14-day trial version in lieu of a guided demo.

A key difference between the pricing options these products present is the base rate and per-person/per-month structure. When it comes to a direct comparison, Zenefits offers business owners a cheaper pricing model that doesnât include a base rate. Gusto pricing tiers are marginally more expensive since they include a starting base rate of $19/mo on the âBase package in addition to their per-person/per-month rates.

Gusto Product Pricing

Basic:Â

$19/month base price + $6/month/person
Basic payroll features
Best for teams of 1 or 2

Core:Â

$39/month base price + $6/month/person
Payroll and benefits administration
Employee onboarding
Best for small teams

Complete:Â

$39/month base price + $12/month/person
All the features of the lower plans
Permissions
Time management tools

Concierge:Â

$149/month base price + $12/month/person
All the features of the lower plans
Access to certified HR pros and resources

Screenshot of Gusto’s pricing page, captured 10/29/2020

Zenefits Product Pricing

Essentials:

$8/month/employee
Core HR functions
Time tracking and scheduling
Mobile app

Growth

$14/month/employee
All the features of the lower plan
Compensation management
Performance management

Zen:

$21/month/employee
All the features of the lower plans
Well-being
Employee surveys
People hub

Screenshot of the three Zenefits pricing plans

Screenshot of the Zenefit’s pricing page, captured 10/29/2020

Ease of Use

Gusto and Zenefits both consider business ownersâ need for simple-to-use user interfaces. Zenefits gets bonus points for its social-media savvy that is apparent from its mobile app. Zenefits offers a robust suite of HR programs that run more smoothly than those of its industry counterparts and provides a great mobile application to boot. However, HR enthusiasts and experts will note that Zenefits can limit their customization options for their user interface.

Gusto, on the other hand, sports a host of major features easily accessible from its main dashboard. Business owners and employees can both enjoy a modern user interface complete with a dashboard and sidebar navigation tool. Unfortunately, Gusto requires users to manage the software implementation process themselves, which can be troublesome for the non-tech-savvy.

Customer Service & Support

Gusto’s customer service and support is one of the product’s most highly touted features. Gusto offers clients different ways to get in touch with customer service reps, including phone calls, emails, in-software support, and help and resource centers. The company also offers a dedicated team of HR and compliance experts for businesses that have upgraded to its ‘Concierge’ plan, but even with the basic ‘Core’ plan, Gusto’s communicative representatives are always quick to respond between 6 AM – 5 PM (PT), Monday through Friday.

Zenefits’s customer service is a mixed bag. Although it maintains a B+ rating from the Better Business Bureau, the bulk of customer complaints on the site have to do directly with customer service. This is likely due to the software-as-a-service business model that Zenefits relies on, which typically sacrifices industry and niche expertise for quicker, more responsive service representatives. Unfortunately, this means it’s not always easy to get an answer to your specific payroll, HR, or tax question if you contact Zenefitsâ customer service.

Reviews & Complaints

Gusto and Zenefits both enjoy generally positive reviews from their end-users across the board. Gusto maintains an average rating of 4.7 stars out of 5 on Capterra based on more than 2,000 ratings, with Zenefits close behind with an average 4.1 out of 5 rating based on more than 670 reviews.

Negative user reviews for these two programs are few, but there are several complaints levied against both that you should be aware of. As far as complaints toward Gusto go, by and large, the biggest issue for users is the limited reporting capabilities, followed by a lack of private payroll processing options and an inability to scale well for growing businesses.

When it comes to Zenefits, there are multiple complaints regarding its poor integration with certain platforms such as QuickBooks. Zenefits also has a track record of withdrawing its fees and funds from client payrolls even after businesses stop using the service.

Integrations

Both Gusto and Zenefits have good track records for integrations and partnering with recognized applications. Each platform also has an application programming interface — or API — that is ready for use by tinkering software developers. Notable, though, is Zenefits’ history of not playing nicely with other platforms (in particular, popular ones such as QuickBooks for accounting purposes).

Gusto has a conversely stellar record of integrating with notable platforms such as Xero, QuickBooks, and TSheets (time-tracking program).

The Key Differences Between Gusto & Zenefits

Gusto and Zenefits both do a great job of simplifying your businessâs internal processes and helping you stay organized. Of course, we wouldnât be comparing these two solutions if they didnât have at least a few differences. Here are the biggest differences between Gusto and Zenefits that will help you decide which solution is best for your business:

Payroll Capabilities: There are no two ways around the fact that Zenefitsâ payroll act isnât quite as together as Gustoâs. Payroll is, after all, a relatively recent addition to Zenefitsâ suite of tools. Zenefits started as an HR management system and is still catching up to Gusto in terms of robust and operational payroll solutions.
Customization: Zenefits again pales in comparison to Gustoâs extensible, customizable user dashboard. One of the areas this issue arises most prominently is in Zenefitsâ HR processing solutions, which are restrictive to HR managers who are used to adding features of their own and fine-tuning their options. Gusto has a history for robust simplicity and takes the win when it comes to overall customization.
Benefits Administration: Gusto’s benefits administration is decidedly more straightforward than Zenefits’. This is due in large part to Zenefits charging an extra fee for companies who already use brokers to administer benefits. Gusto charges no extra fees for benefits administration and will make it easy to manage all your benefits from one localized dashboard.
Security: The big difference between Gusto and Zenefits’ security measures is encryption standards. Gusto relies on the highest-level encryption technology to transmit data: 256-bit Secure Sockets Layer transmission. The company uses SSL to protect sensitive employee data and makes constant backups in multiple locations of its critical data. Zenefits encrypts data using Transport Layer Security and layers its resting data with AES-128 technology. Zenefits uses two-factor authentication to grant access to data, whereas Gusto makes implementation of this added security layer optional.
Pricing: The pricing models between Gusto and Zenefits are quite similar. Both offer tiered levels of service packages that offer exponentially greater features. However, Zenefits does edge Gusto out when it comes to overall affordability. Gusto slips in a base rate for each of its three packages in addition to its per-person and per-month fees, whereas Zenefits does not include any base rates with any of its packages.
Employee Portal: Zenefits’ employee portal stands out by offering a desktop as well as mobile app version for employees. Zenefits’ portal merges company HR features with its HRMS for ease of access to all HR data. Gusto does not offer a mobile-based employee portal, but still provides an easy-to-use dashboard for employees, complete with a sidebar navigation pane.

Which Is Best For My Business Needs: Zenefits Or Gusto?

Zenefits and Gusto overlap in many ways, but each fills a niche that caters to a different kind of business. The best product for you will depend on what your businessâs immediate and long-term focuses are, and what youâll be using the product for most often.

Gusto is best for…

Companies that need to streamline payroll for fewer than 100 employees
Business owners who need easy-to-reach customer service reps
Companies handling 1099 contractors as well as W2 employees

Zenefits is best for…

Companies that need to scale their HRMS processes
Business owners who want an emphasis on mobile app usability
Companies that donât need to integrate with many platforms

Gusto VS Zenefits Comparison: The Final Verdict

Gusto is renowned for its seamless combination of payroll processing, new hire onboarding, and HR and benefits management services. Gusto medical, vision, 401(k), dental, and savings plans are all easily accessible through the companyâs benefits options. And the best part is the transparent pricing model and structure that Gusto provides its clients.

Zenefits shines brightest with its HRMS and HR data aggregation, benefits management options, and robust add-ons for payroll to boot. For business owners who are just starting to build out their HR infrastructure but are also focused on growth, Zenefits may be the perfect choice. Zenefitsâ HR management is structured for novices and is easy to hit the ground running with. Their all-in-one system for managing employees offers the benefits of a professional employer organization, and its pricing structure includes no base rates for any tier packages.

When ultimately stacked up against each other, though, Gusto comes out as the winner with more consistent quality, reliable features, and well-rated customer service. Unfortunately, Zenefits’ overall quality is weighed down by serious integration issues, a constant stream of complaints regarding customer support service, and relatively barebones payroll processing options. Gusto, while limited in certain areas such as reporting and health care coverage, has an all-around more customizable and complete package to offer small-sized, up-and-coming businesses.

The post Gusto VS Zenefits Comparison: Which Is Better? appeared first on Merchant Maverick.

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October 23, 2020

Top 5 Reasons Why Small Businesses Were Denied Government Funding During The COVID Crisis

The PPP/EIDL funding process upended the small business community these past few months as places scrambled to stay open — and solvent — during the COVID pandemic shutdowns and closures. Since March, Merchant Maverick has been paying attention to reader comments to try and put our finger on the pulse of the everyday business owners’ experiences.

In Early October, Treasury Secretary Steve Mnuchin said in a press release that the government provided 5.2 million PPP loans worth $525 billion to small businesses, which saved 51 million jobs. Congress also added another $20 billion to the Economic Injury Disaster Loans program and made the (up to) $10,000 advance forgivable.

Despite those numbers, the PPP and EIDL programs failed to give a lot of business owners the help they needed. What went wrong? Why were small businesses denied those funds? And what does the future look like in terms of government COVID aid?

Keep on reading to find out the top five reasons why small businesses missed out on government loans during the coronavirus pandemic.

1) Issuing Banks Failed Big Time

The first, and most challenging, hurdle for many small business owners involved problems with the actual banks issuing the loans. It’s important to understand that the Small Business Administration (SBA) itself does not directly lend money; it relies on partner banks and lenders to actually provide the cash. Instead, it smooths out the lending process by guaranteeing all or a portion of the loan, making the process less risky in general.

When the PPP and EIDL programs launched, partner banks were unprepared to deal with the volume of applicants.

Banks were overrun with applications within hours
Funds were depleted quickly
Paperwork was filed too slowly, and without a good system for tracking applications

According to reader comments, Chase Bank and Bank of America, in particular, struggled with serious issues around applicants and applications. But in general, nothing about the rollout of the SBA loans was well-thought-out, and that left many banks scrambling to come up with their own internal policies amid confusion. The general chaos within the banking community meant that many business owners, even when filing applications correctly, missed out on their piece of the PPP or EIDL funds.

Our reader Naomi wrote:

This PPP is such a farce on so many levels. We applied early with Chase, tried to check on the status and was told that they aren’t in charge of approving the loans and don’t even have access to the applications. Essentially, they said that the applications automatically go directly to the SBA and the SBA reviews the applications. When we called the SBA, they told us the exact opposite: That the bank approves the applications and likely didn’t get to ours before the funds ran out — essentially that it was just sitting there for two weeks! … The process generally has just been unbelievably inequitable from the start and not transparent … Shame on the US Government.

Reader Kim replied to Naomi, writing:

Well said! I went through the same thing. Waiting, wondering, worrying… no answers, then BAM the money is gone. Then to hear Chase and the SBA gave millions to businesses that, no doubt, have countless resources at their disposal. Resources that actual small businesses wouldn’t even qualify for. Shame on Chase and shame on the SBA as well.

Chase Bank was not alone in its failure to handle the SBA disaster loans rollout. Bank of America also came under heavy scrutiny for the way they processed their loans, resulting in a lawsuit from four small businesses that allege Bank of America prioritized businesses needing larger loan amounts so they could maximize their own profits. Our Merchant Maverick readers experienced the same kind of forced delays in filing loan paperwork that are cited in the lawsuit.

Our reader Monica said, “Shame on you, Bank of America! All documentation submitted and confirmed. Then nothing! After 30 years as a small business banking customer, we are disgusted. Enjoy the $18 billion you will make while screwing your small business clients.”

The financial toll of COVID has affected all business owners, but it’s been particularly hard on those that provide essential services. Karen, a physical therapist and owner/founder of a clinic in Issaquah, Washington, wrote:

As an essential healthcare business, we’ve remained open and have been providing care to our critical needs patients and many front-line responders in the COVID-19 crisis. Located in King County, we’ve been struggling since the original outbreak in Kirkland, Washington only 6 miles away. We applied through Bank of America for the Payroll Protection Plan within three hours of the process opening online on April 3, 2020. We uploaded our supporting documents within four hours of the email request for them. As of today, we’ve had no response from BOA and can only assume we won’t be receiving any Federal assistance… I’m not sure what future opportunities may arise to fill this critical gap in funding for small businesses, but as a front-line health care provider, I certainly hope some priority will be given to businesses like ours.

Jocelyn, another physical therapist from Redmond, Washington, replied to Karen:

Like you, we applied for the PPP through Bank of America (our business bank for 21 years) on day one and did not end up getting any funds. All along the way, it seemed there were delays on their end. We would jump whenever they requested information, but then days would go by before we would get another email. Eventually, the money just ran out and we were out of luck. There is no one to give us any information. Now learning that BofA funded some larger businesses that used up millions instead of the small businesses like ours makes me really upset. I’m not optimistic about having any chance the second time around either.

2) SBA & Lender Technology Floundered

Another huge complaint about the PPP/EIDL process surrounded the major technology glitches that prevented people from navigating the application process with ease. Errors abounded, the most of common of which were:

Small business owners never received log-in information
Websites were overrun with traffic and timed out
Applications failed to upload at all
Users received error messages during the process and didn’t know how to proceed
Applications were resubmitted due to website error and then flagged as suspicious

Even during the second round of funding, technology issues ran rampant. The SBA’s processing site experienced extreme slowing. In a comment to Fortune, the SBA said: “SBA notified lenders yesterday that pacing of applications into the E-Tran system would occur, meaning all lenders would be able to submit at the same rate per hour. The pacing mechanism prevents any one lender from submitting thousands of loans an hour into the E-Tran system. If a lender goes above the pacing limit they will get timed out.”

A handful of Merchant Maverick readers encountered a similar technology issue: Accidental flagging of potential duplicate applications. If computers timed-out and a small business resubmitted, there was a potential for a double-submission. Or in one reader’s situation, she submitted applications to two separate businesses but it was still flagged as a duplicate. Corina wrote, “I had to call and ask them to reinstate the main application for my larger business.”

A reader named Smith wrote:

Today, I received the following email with the subject line: Multiple SBA Economic Injury Disaster Loan Applications. ‘We received multiple applications from your business for economic injury as a result of Coronavirus (COVID-19). Your earliest application will continue to be processed and we have withdrawn [other] application number from active consideration.‘ Does this mean I’ve been denied? I only submitted one application.

Reader Anne wrote:

My business was initially declined because the system though I’d applied multiple times. Turned out it was because, in the system, my application showed the same numbers for my bank account and routing number. There were a number of people from my bank who made the same mistake when applying, so it showed multiple accounts applying for the loan — which were considered duplicates — when it was really multiple people applying who use the same bank. My guess is there’s a bug in the application software, but no use focusing on that to resolve.

Our reader Valerie ran into similar problems with her EIDL loan after receiving mixed messages from the bank. She wrote:

After I confirmed my identity and approved the amount, it wouldn’t let me review and sign the documents. I received an email saying I was approved for an amount and it gave me the option to select the maximum amount or a lower amount. I checked the [bank] online about 3 hours later, and now the status shows declined and they will email me with the details. I am so confused, because they emailed me and told me that I was approved.

3) The SBA Wasn’t Prepared

News agencies widely panned the rollout of the SBA disaster loans with a slew of adjectives, including chaotic, sloppy, bumpy, flawed, glitchy, messy. An article from NPR outlined many of the problems surrounding the program and some of the questions that small business owners still have about the funds. In general, users found that the SBA guidelines were too vague or they failed to answer questions in a timely manner. Phone lines went down — phone numbers that worked for some didn’t work for others. Misinformation and exhaustion reigned.

Merchant Maverick reader Micah captured the frustration many of our readers encountered during the EIDL process. He wrote, “[I] just received a denial email. After jumping through so many hoops and re-entering my bank info, they just decided to deny me.”

David wrote, “I got an email on 5/10 that my EIDL was being processed and created the account, gave verification and bank info… and today, I went to check on it and the status has gone from processing to DECLINED! It says I’ll get more info by email.. I was really counting on that money, especially when they said it was processing.”

Reader Hollie responded to David’s situation with her own experiences, writing that the same thing happened to her with her EIDL loan:

I got the email from the SBA saying congratulations your application is processing. It gave me a loan amount that I was approved for. I accepted the amount. Created the account, verified my identity, and put in my bank info… Then boom: Next day, Email saying I was denied. It also said it would send via email the reason for denial. Welp, that email never came. I’ve called and sent them emails asking what happened, but have yet to hear back. That was two weeks ago.

4) Unqualified Businesses Snatched Funding Not Meant For Them

Shake Shack. The Laker’s. Potbelly. A handful of successful hotel chains. When the funds were dispersed and the scrutiny started, small business owners who had been left out of the two rounds of funding were irate to learn that some businesses that didn’t seem to meet the criteria were walking away with the bulk of the resources. The backlash, however, prompted many of the larger companies to return the money.

Readers responded with frustration to the news that big businesses walked away with the money that small businesses had been promised. During the first round of PPP loans, reader Lee wrote:

Our government has scammed us. I applied to Chase for an SBA loan during the first week. Our banker walked us through it. A few days later, he finally answered, after texting and calling him constantly. He said the program ran out of money, so our application was in the queue for the next release. Then, today, I heard that Shake Shack got $10 million! They have way over 500 employees. I can’t wait until November.

Reader MC shared a similar sentiment:

I understand that the PPP came with no user manual and is extremely confusing. But it doesn’t excuse some blatant and grotesque approvals of loans to filthy-rich businesses. Take the Los Angeles Lakers as an example. They were approved for $4.6 million although their estimated value is $3.7 billion! Why in the world did they apply in the first place? It’s truly, truly appalling.

Reader D. Hewett wrote:

I work financing small business loans. I’ve been working and following up nonstop on programs to try and help other business owners. I filed end of March… There is no place to check for your loan application. If small business owners don’t die of the coronavirus trying to get promised funds will kill them. Meanwhile, large, large corporations got millions of dollars while little small business owners are getting denied unemployment? No word on EIDL, denied or turned away from PPP. Haven’t received stimulus checks. I am one of those, and this shows me the ineptness of our government in every way from managing the coronavirus to disaster loan programs.

5) Simple User Error

Lastly, another common thread among the denied was good old-fashioned user error. Thanks to hugely mixed messaging, and confusing and conflicting information from banks and the SBA, the process wasn’t smooth to start with. Compounded with technology issues, many small business owners made simple mistakes in the application process that slowed down the process or precluded them from receiving funds at all.

Many readers reported being told to fix issues, only to have the money run out in the meantime. Others had their credit pulled (and their credit score affected by the pull), but suffered from small errors that prevented their applications from fully going through. Faulty log-ins, wrong bank information, missing information — all of those things contributed to loan failure. One reader was frustrated when she accidentally entered zero on her loan amount and was unable to receive help from the SBA to correct the amount.

Some small businesses that were denied because of error were allowed to submit reconsideration letters, although it is unclear how many of those went on to receive funds.

The Future Of Government Aid During COVID

As this article goes to press, more COVID relief is being discussed, but there is no further news about the government’s plans for the small businesses still in need of aid. With the November presidential election mere weeks away, it is apparent that COVID aid is an election issue and a government bargaining chip. However, while Federal aid may be in limbo, small business owners may also want to check out other forms of funding, including what their local governments are offering in terms of grants — as many state, county, and city governments are dispersing funds from the CARES Act to local businesses.

Follow Merchant Maverick on Facebook or Twitter for more news content related to the pandemic. Comment on social or on this article about your experiences or venture on to check out our COVID-19 hub — we’ll also be posting any need-to-know stories there.

Do you have a story idea, tip, or press release for the Merchant Maverick news team? Shoot us an email: [email protected]

The post Top 5 Reasons Why Small Businesses Were Denied Government Funding During The COVID Crisis appeared first on Merchant Maverick.

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October 21, 2020

Gusto VS ADP: Which Payroll Software Is Better?

	Gusto	ADP
Features	Excellent	Excellent
Pricing Start Point	Good	Fair
Ease of Use	Excellent	Excellent
Customer Support	Excellent	Excellent
Reviews & Complaints	Excellent	Good
Integrations	Good	Good
Hardware & Software Requirements	Fair	Excellent
Security	Excellent	Good
Best For	Small to midsize businesses	Large and growing businesses
	Start Trial Read Review	Visit Site Read Review

Payroll software can cut down on errors and reduce time spent calculating paychecks, handling tax withholdings, and getting employees paid on time. But with so many options, it can be challenging and time-consuming to find software that best fits the needs and budget of your small business.

To help take out the guesswork and narrow down your search, we will compare two leading payroll software apps available to small businesses: Gusto and Run by ADP. For each, we will evaluate several criteria, including features, pricing, user-friendliness, customer support, and candid feedback from small businesses.

Read on for our side-by-side comparison and decide which software is best suited to your business.

Gusto VS ADP Overview

There is no one-size-fits-all solution to payroll. In assessing Gusto vs. ADP, we aim to highlight how and when businesses might benefit from each software. Notably, there are some key differences in features and pricing to be aware of when comparing Gusto vs. ADP.

Before diving into the details of how Gusto vs. ADP stack up head-to-head, letâs begin with an overview of each, including pros and cons.

Gusto

Formerly known as ZenPayroll, Gusto has been in the payroll software industry since 2012. The cloud-based payroll platform has a reputation for its straightforward interface and the ease with which it automatically calculates payroll and tax filings. Gusto supports flexible payment schedules too, which comes in handy whether following a standard bi-weekly plan or periodically doling out bonuses and commissions.

Gusto is effective at integrating other aspects of business too, such as HR, employee onboarding, and benefits administration. Through the employee portal, workers can log hours and keep track of PTO with any of Gustoâs three plans. Additionally, Gusto can sync up with third-party applications, such as the popular accounting program QuickBooks.

Gusto has the essential nuts and bolts of payroll covered, but its provision of extra features isnât extensive across any of its three plans: Core, Complete, and Concierge. Conversely, this actually makes Gusto a budget-friendly option, even with some extra add-ons like health insurance and 401(k) plan support. Between pricing and features, Gusto is a fit for many small and midsize businesses looking for a practical platform to take care of payroll.

Pros

Transparent pricing for tiered plans
Integrated time tracking and HR
Intuitive user interface
Prepares year-end tax forms
Unlimited payroll runs (for businesses with <100 employees)

Cons

Limited time tracking
Less reporting than ADP
Health insurance offered in only 38 states and D.C.

ADP

Automatic Data Processing, Inc. (ADP for short), is a leader in workplace management for companies around the world. ADP has been helping businesses run payroll since the 1940s (beginning with an ice cream parlor before acquiring 12% of the payroll market today). The global firm helps deliver payroll and HR solutions to small businesses and major corporations alike.

For that reason, ADP offers multiple plans catering to diverse business needs. ADP Run, which is structured for companies with 1-49 employees, is the most suitable ADP package for small businesses. ADP Run has four tiers: the Essential Plan, the Enhanced Plan, the Complete Plan, and the HR Pro Plan.

Across all four plans, ADP Run handles core payroll functions, including payroll processing, direct deposit, tax filing, and new hire reporting. Each plan also comes with useful HR applications, namely PTO tracking and approvals, time tracking, and assistance with workers’ compensation, retirement, and health care. An employee portal (My ADP) connects workers with these HR functions, while also giving access to their pay stub and tax information.

As a major global firm, ADP has made a name for itself on customer support on top of its cutting-edge technology. Though reviews tout how intuitive the platform is, ADP staff are on hand 24/7 for phone and live chat support. Customer service also includes user tutorials and getting started with the software.

Pros

A total of four plans helps with customization
Strong payroll and employee management features
Payroll and HR reports can be exported to Microsoft Excel
24/7 customer service compared to Gustoâs Monday-Friday coverage

Cons

Pricing is not disclosed online
Additional features come with added fees
Charges per payroll run, whereas Gusto offers unlimited

Both Gusto and ADP possess an array of features to take care of payroll, as well as employee and HR management. They also pack many of the same features, including full-service payroll, tax filing, direct deposit, time tracking, new hire reporting, generating reports, and employee management. There are two distinctions in features that stand out. First, ADP offers health insurance in every state, whereas Gustoâs coverage is limited to 38 states and D.C.. Second, Gusto supports free unlimited pay runs, while ADP charges extra for frequency of payment.Â

Features

Features	Gusto	ADP
Payroll Processing	â	â
Tax Filing	â	â
Direct Deposit	â	â
Unlimited Pay Runs	â
Time Tracking	â	â
Benefits Administration	â	â
New Hire Reporting	â	â
Reports	11	50+
Employee Management	â	â
	Start Trial Read Review	Visit Site Read Review

Although both software programs tout many of the same features, some tools and components differ considerably in scope and practice. To help make sense of it all, weâll compare Gusto vs. ADP on a number of important payroll features for small businesses.

Payroll Processing

Getting payroll taken care of in less time and without errors are major reasons why small businesses utilize payroll software. Therefore, itâs worth examining how Gusto and ADP help achieve these ends.Â

Across all their plans, Gusto and ADP offer full-service payroll for W2 and 1099 employees in all 50 states. For small businesses with tipped workers, Gusto can automatically adjust wages to claim the tip credit and abide by FLSA minimum wage requirements. Gusto can also handle garnishments and multiple pay rates and schedules, which can come in handy if employees earn commission or bounce between multiple roles (host and server at a restaurant, for example). ADP Run only offers garnishment for its three heftier plans (Enhanced, Complete, HR Pro).

Small businesses can choose to automate payroll with either software. ADPâs payroll services are accessible from its mobile app too.Â

Payment Methods

Both Gusto and ADP Run allow small businesses to use direct deposit and cash cards to pay their employees across all plans. With Gusto, the Core, Complete, and Concierge plans allow users to run payroll just two days before employees need to be paid. The most notable difference in payment methods between the two is that Gusto supports in-house printing of paychecks, whereas ADP Run can only mail checks through the Enhanced, Complete, and HR Pro plans.Â

Reports

On paper, both Gusto and ADP deliver payroll reports with any plan. However, ADP reporting features go incredibly in-depth. ADP Run users can access dozens of reports related to payroll, taxes, benefits, and HR. Some examples include employee time card comparisons, earnings by department, tax withholdings, and PTO per employee. On the flipside, Gusto supports just 11 reports. Although it is considerably less extensive, users can still view and export reports related to payroll summary, taxes, benefits, and employees too.Â

HR Support

In addition to paying employees and calculating tax withholdings, payroll software can bring HR support to small businesses too. Only Gustoâs priciest Concierge plan comes with HR compliance help, policy guides, and templates. Meanwhile, ADP Run has HR features available with all four plans. The essential plan gives access to an HR newsletter and checkups. Upgrading to more advanced plans can bring additional HR perks, including poster compliance assistance, background checks, ZipRecruiter subscription, legal assistance, and employee training.Â

Pricing

Gusto

Gustoâs straightforward pricing lets small businesses make easy cost comparisons and determine how a prospective plan would fit within their budget. The monthly cost per plan is characterized by a base rate plus a flat fee added for every person in a customerâs payroll.

Basic: $19/month + $6/month per person (employee or subcontractor)
Core: $39/month + $6/month per person
Complete: $39/month + $12/month per person
Concierge: $149/month + $12/month per person

Extra Services

There are extra costs for adding on benefits administration services and other features to complement Gustoâs payroll software. For instance, customers can tack on health benefits, 401k retirement plans, workersâ compensation insurance, 529 college savings plan, and tax-advantaged spending accounts

ADP

As previously mentioned, ADP does not have set pricing for each of its plans. Instead, interested customers receive a quote based on their business, desired features, and number of employees. On ADPâs website, getting pricing for any of the ADP Run plans requires entering your businessâs name, zip code, number of employees, and a contact email.Â

Research by the team at Merchant Maverick reports that there is generally a $20-$50 per month increase in pricing between each tier of ADP Run. Although pricing does not give ADP a competitive edge, an offer for three free months of ADP Run upon sign-up could lower the cost barrier to give it a test run.Â

Ease Of Use

Finding payroll software that fits your budget and needs is an important first step to narrowing down your options. Being able to quickly learn how to navigate the platformâs interface is another critical factor in selecting payroll software.

Gusto and ADP are both well-organized and intuitive on the user end. For Gusto, the employer and employee portals have dashboards containing the main payroll information, while sidebars provide quick access to its features. On the other hand, business owners can easily find ADPâs payroll and HR features from the home page or employer portal dashboard.

In the case of ADP, customers may work with a company representative to work through the payroll set-up process. This support also comes with tutorials to guide customers through utilizing ADP Runâs various features. Meanwhile, Gusto users will need to take a more DIY approach to setting up payroll. Step-by-step instructions and customer support can take most of the guesswork out of it. Once the payroll information has been inputted, Gustoâs AutoPilot can take care of payroll moving forward or employers can manually run payroll as they see fit.

Employee Portal

Employees can access payroll and HR resources and information with either software. After logging into Gustoâs employee portal, workers can look into pay stubs, time off, benefits, and upcoming payday with just a few clicks. ADPâs portal and mobile app â MyADP â help employees get to their pay stub, tax information, and HR features, such as making PTO requests or updating personal information.

Customer Service & Support

Gustoâs quality customer support is one of its main selling points. Once youâre a Gusto customer, you can reach support staff by phone, email, live chat, and social media during business hours from Monday through Friday. If youâre in need of assistance outside these hours, youâre still in luck. Gustoâs Help Center, Resource Center, and Ask Gusto how-to articles are loaded with useful tips and information. Although all four Gusto plans have access to customer support, the Concierge plan delivers the extra perk of a dedicated customer service team to help with HR and compliance.

Over the past six decades, ADP has built its reputation on attentive and quality customer service and support. ADP customers can reach a company representative 24/7 by phone and live chat. Community forums, email, and social media are other options for advice and help too. Visual learners will appreciate the fact that ADP has its own YouTube channel with tutorials and resources to help customers make the most of their payroll processing and HR management features.

Reviews & Complaints

Small business owners undoubtedly know their needs better than anyone else, but tapping into the knowledge and experiences of other small businesses can be informative when it comes to payroll software.

When it comes to Gusto, most small business customers are pleased with the softwareâs features (especially tax support, reminders when itâs time to submit payroll, and customer service. Generally speaking, reviews have also praised the softwareâs intuitive nature, transparent pricing, and its ability to save business owners time and energy. On the flip side, some customers have complained about limited reporting and analytics. In some cases, customers have expressed the wish that Gusto covered international employees and contractors too.

As a veteran provider, ADP Run has worked out many bugs and internalized customer feedback over the years. This experience has been praised in some customer reviews. Users also appreciate the round-the-clock support, multitude of features, and easy-to-use interface. Conversely, customer complaints have touched on hidden fees and undisclosed pricing for its various plans. Some customers have voiced frustration with having to request a demo from a sales representative to get a sense of the softwareâs interface.

Integrations

There are many aspects to running a small business beyond payroll and HR, including accounting, project management, recruiting employees, and sales. Some small businesses may even utilize other software or applications for these needs. Gusto and ADP both recognize this reality and have chosen to offer a host of integrations.

Both Gusto and ADP offer plentiful integrations, including accounting programs, QuickBooks, and Xero. ADP also supports dozens of time and attendance software, including ClockShark, Deputy, Homebase, and TSheets. Although the company doesn’t disclose every available integration on their website, ADP is known for working to customize integrations when needed.

If small businesses donât find Gustoâs time tracking features up to par, they can also integrate with a more robust app time tracking app like TSheets. If you have in-house developers, Gusto offers API to support any further integration needs.

The Key Differences Between Gusto & ADP

Between features, pricing, ease of use, customer support, reviews and complaints, and integrations, there is a lot to consider when choosing between Gusto and ADP. If youâre still undecided, letâs examine how these payroll software applications differ through the lens of a small business:

Pricing Structure: Gustoâs pricing is upfront and transparent. The cost will incrementally go up with the number of employees, and some optional add-on features can be included for a fee. On the contrary, ADP does not advertise pricing for any of its plans. Interested customers must obtain a quote and negotiate a deal, which could put smaller employers at a disadvantage.
Payroll Scheduling: Gusto grants the flexibility to pay employees on multiple pay schedules without charging extra. ADP charges per payroll, so paying employees on a weekly basis or processing contractor invoices would rack up extra expenses.
Reporting: Gustoâs 11 reports can inform users on some payroll basics, but ADP offers a wider and more in-depth selection of reports for small businesses. ADP lets users analyze employee data, including overtime and performance, as well as create custom reports.
HR Support: Only Gustoâs Concierge plan includes HR features. ADP Run has significant HR capabilities, such as an HR toolkit and dedicated HR advisers, in its more robust Complete and HR Pro plans. These resources could be advantageous for small businesses without a dedicated HR person.

Which Is Best For My Business Needs: ADP Or Gusto?

There isnât a single model for success when it comes to processing payroll. Many small businesses are satisfied with how ADP and Gusto have enhanced their operations. Letâs consider some scenarios when each software could be a better solution for small business needs.

Choose Gusto If…

You run a small or startup businesses
You value streamlined payroll, HR, and benefits management over sophisticated analytics and reporting.
You need flexible payroll runs for contractors, tipped workers, or employees earning bonuses or commission.

Choose ADP Ifâ¦

You have a mid-size or rapidly expanding businesses.
You want to integrate payroll with other apps and software.
You require more extensive HR features to recruit applicants and perform background checks.

Gusto VS ADP Comparison: The Final Verdict

Gustoâs success in the payroll realm can be attributed to its transparent, budget-friendly pricing structure and easy-to-manage interface. The softwareâs leading features â automated payroll processing, direct deposits, tax filing, and PTO management â are available across all four plans. Benefit options, such as medical, vision, dental, 401(k), and tax-advantaged savings accounts are affordable add-on features if desired. For these reasons, small and startup businesses stand to benefit from the straightforward features, pricing, and integration with other software and applications.

Across all four plans, ADP Run is more comprehensive in its features and customization. Beyond its full-service payroll processing, ADPâs most prominent features are its extensive reporting and analytics, HR support, and time tracking. Additionally, 24/7 customer service can give small businesses peace of mind, especially if working outside standard 9-5 business hours. Since ADP doesnât disclose pricing, the time demand and uncertainty of negotiating a price (plus hidden fees) may not be right for smaller businesses. Instead, mid-size businesses with greater HR needs and plans to grow may better afford and appreciate ADP Runâs added features

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October 20, 2020

QuickBooks Desktop 2021: Everything You Need To Know About Intuit’s Latest Release

We can all agree that 2020 has been quite a year. Many of us are ready to put it behind us and are looking forward to the year ahead. Intuit has gotten a jump on the new year with the release of QuickBooks Desktop 2021, the latest version of its best-selling accounting software.

But before you jump headfirst into an upgrade, take a few minutes to understand what’s new about QuickBooks Desktop 2021. In this post, we’ll explore the new features and new pricing to help you determine if this latest version is right for your business.

What’s New With QuickBooks Desktop 2021?

QuickBooks 2021 has introduced a handful of new features that make it easier for small businesses to balance their books. These features include improvements to bank feeds, automated statements, categorized receipt entries, and receipt customization.

QuickBooks 2021 Features

Let’s take a look at each of the new features offered by QuickBooks Desktop 2021 so you can see how these changes affect your business.

Automated Statements
Bank Feed Improvements
Receipt Management Tools
Customer Groups
Customized Receipts

Of course, you’ll also still have access to the same great features offered in the previous version of QuickBooks Desktop, including cash or accrual-based accounting, expense tracking, invoicing, estimates and quotes, contact management, inventory, and more.

If you’re a Mac user, QuickBooks for Mac offers a number of new features in its latest software. These features include:

Automated Payment Reminders
Statement e-Payments: Add a payment portal link directly within your statements, making it easier and more convenient for you and your customers.
Combined Invoices: Combine multiple invoices into one simple email.
Sales Tax Codes: Now you can record sales tax for out-of-state orders, non-profits, and multiple districts.
1099 e-Filing: You can now e-file 1099s through QuickBooks for Mac.

QuickBooks Desktop 2021 Pricing Changes

QuickBooks Desktop 2021 also brings increased pricing. There are several different pricing options available to you. Let’s break down the costs of each option to help you determine which is right for you.

	2020 Pricing	2021 Pricing
QuickBooks Pro	$199.95/year $299.95 one-time license	$299.99/year $399.99 one-time license
QuickBooks Premier	$299.95/year $499.95 one-time license	$499.99/year $649.99 one-time license
QuickBooks Enterprise	Starting at $924/year	$1,213/year
QuickBooks Mac	$399.99 one-time license	$399.99 one-time license

QuickBooks Pro 2021

Your first option is to purchase an annual subscription. QuickBooks Pro Plus 2021 is priced at $299.99/year, although you may qualify for discounts when purchasing directly through Intuit. With this subscription plan, you’ll have full access to QuickBooks Desktop, as well as unlimited customer support, automatic backup and recovery, and automatic updates and patches. You also have the option to add on payroll and hosting services. Additional users can also be added for a fee.

You may also opt to purchase a QuickBooks Pro 2021 license for a one-time fee of $399.99. While this may seem like the less expensive option, there are a few things to consider. Automatic updates, data recovery, and backups are not included. You will also pay an additional $299.95/year for a Care Plan that offers unlimited support. These are all included for no additional fee when you subscribe to QuickBooks Pro Plus 2021. Payroll, hosting services, and additional users can be added for an additional fee.

QuickBooks Pro Plus 2021 + Payroll

If you have employees and plan to use QuickBooks for payroll, QuickBooks Pro Plus 2021 + Payroll has what you’re looking for. This plan costs $749.99/year. It includes everything from the QuickBooks Pro Plus 2021 subscription, as well as QuickBooks Enhanced Payroll. Hosting services and additional users can be added for a fee.

QuickBooks Premier 2021

If you want everything offered by QuickBooks Pro but want industry-specific software, QuickBooks Premier 2021 is a good choice. QuickBooks Premier 2021 can be purchased for a one-time fee of $649.99. Payroll and the QuickBooks Care Plan can be added on for an additional cost.

If you prefer an annual subscription that includes unlimited customer support, updates, and automatic data backups, you can sign up for Premier Plus 2021 at a cost of $499.99/year.

QuickBooks Premier Plus 2021 + Payroll

You can sign on for Premier Plus 2021 with the addition of Enhanced Payroll for a cost of $949.99/year.

QuickBooks Enterprise 21.0

Businesses looking for a more scalable solution may want to give QuickBooks Enterprise 21.0 a try. With this plan, you can have up to 40 users and get access to additional features including advanced inventory, priority support, and industry-specific software versions. QuickBooks Enterprise costs $1,213/year.

QuickBooks For Mac 2021

There are no complicated pricing tiers for QuickBooks for Mac. This software is available for a one-time cost of $399.99.

QuickBooks Desktop 2020 VS QuickBooks Desktop 2021

Features	QuickBooks Desktop 2020	QuickBooks Desktop 2021
Automatic Statements		â
Receipt Management	â	â
Customer Groups		â
Live Bank Feeds	â	â
Custom Payment Receipts		â

Intuit has always added new features to further simplify its accounting software and the release of QuickBooks Desktop 2021 is no exception.

One of the biggest additions is automated statements. This feature lets you automatically send scheduled statements or payment reminders to your customers. With automated reminders, you can get paid faster without having to manually set up statements.

Another feature added to automate processes is improved receipt management. Users can be given access to upload expense receipts from a computer or mobile device, making it quick and easy to track expenses. You can also automatically categorize and record multiple transactions at the same time, helping cut down on the time spent importing receipt data.

QuickBooks Desktop 2021 now offers customer groups. With this feature, you can group customers based on set criteria such as location, customer status, or customer type. Once your groups are created, you can send automated statements, payment reminders, or create custom mailing lists.

QuickBooks Desktop 2021 also brings improvements to bank feeds, making it faster than ever to review, add, or match bank transactions. The latest improvements to bank feeds save time by automatically categorizing bank transactions by accounts, payees, and classes. You can take advantage of batch editing and enhanced rules to cut down on data entry, while also making it easier and faster to find and resolve discrepancies.

Finally, the latest version of the software allows you to customize your payment receipts with a logo or custom fields to give your receipts a more polished and professional look.

Should You Upgrade To QuickBooks 2021?

The first factor you should consider before upgrading to QuickBooks 2021 is what version your business is currently using. If you’re using QuickBooks 2018 or an earlier version, support for your software may have already expired (or is set to expire soon). While you can still use your software, you lose technical support, as well as important features like security updates and access to QuickBooks Payroll. So, if it’s been a while since you’ve updated your software, it may be a good idea to upgrade to the latest version.

On the other hand, if you’re using a more recent version of QuickBooks Desktop, an upgrade may not be necessary. While there are a handful of new features, these features may not be worth the increased pricing that comes with upgrading to QuickBooks 2021.

If you’re an annual subscriber, you’ll automatically be updated to the latest version and will be able to use all of the new features. But if you made a one-time purchase, you will need to evaluate if the new features will be beneficial for your business and worth the additional cost of upgrading to QuickBooks Desktop 2021.

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October 19, 2020

How Will PPP Loans & EIDL Advances Affect My 2020 Taxes?

The post How Will PPP Loans & EIDL Advances Affect My 2020 Taxes? appeared first on Merchant Maverick.

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October 16, 2020

How To Maintain A Healthy Cash Flow For Your Business

There are several key components that contribute to the success of your business — hardworking employees, identifying and marketing to your target audience, and providing high-quality goods and services. However, one of the most important components that contributes to the success of your business is bringing in and maintaining a healthy cash flow.

Let’s face it: Without capital flowing in and out of your business, your doors aren’t going to stay open for long. Maintaining a healthy cash flow will help your business stay afloat and make it profitable and successful.

In this post, we’re going to look at different ways to manage your cash flow. Now, this article won’t be centered on improving cash flow (you can read more about that here). Instead, we’re going at ways you can manage and maintain a healthy cash flow. In other words, we’re going to help you more strategically work with what you’ve got. Let’s jump in.

Cash Flow Basics

Before we break down ways to manage and maintain a healthy cash flow, it’s important to understand what cash flow is and what it means for your business.

Simply put, cash flow is the cash that comes in and goes out of your business. Cash flows in from things like sales, business loans, and returns on investments. Cash flows out to cover expenses like operating costs, inventory, supplies, and payroll.

Cash flow can be positive or negative. This means:

Positive Cash Flow: The amount of cash that is coming into your business is more than the amount of cash going out of your business.
- Example: This month, your business brings in $20,000 through sales, investments, accounts receivable, and financing. Your total liabilities, expenses, accounts payable, and payroll total is $15,000. In this example, your cash flow is positive.

$20,000 – $15,000 = $5,000

Negative Cash Flow: The amount of cash that is coming into your business is less than the amount of cash going out of your business through things like payroll, expenses, and accounts payable.
- Example: Last month, your business earned $10,000 through sales, investments, accounts receivable, and financing. Your total liabilities, expenses, accounts payable, and payroll are $12,000. In this example, your cash flow is negative.

$10,000 – $12,000 = -$2,000

If your cash flow is positive? Great! That’s exactly what you want to see. But don’t sit back and think you’re completely in the clear. Your cash flow can be impacted positively or negatively from month-to-month — or even day-to-day! This is why it’s so important to always keep an eye on the numbers and take steps (like those we’re about to dive into) to manage and maintain a healthy cash flow.

What Is Cash Flow Management?

Cash flow management means tracking the cash that is coming into and out of your business. Utilizing cash flow management within your business helps identify where money is coming from and how much is coming in. It also helps you identify the outflow of money and where it’s going.

Not only does this give you an idea of how much cash you have on-hand at this moment but it can give you insight into your cash flow in the future. By tracking your company’s cash flow, you can spot trends, changes, and potential problems that can be corrected sooner rather than later.

How To Manage Cash Flow

Managing your cash flow — tracking cash that flows in and out of your business — is imperative to the success of your business. The good news is that there are a variety of tips and tools at your disposal that make it easy to manage your cash flow.

Open A Business Bank Account

A common mistake that many new business owners make is mixing their business and personal finances. This can get complicated over time, making it confusing to track business income and expenses, and can be a nightmare come tax time. Keep your business and personal finances separate by opening a business bank account.

Your business bank account can be used for your incoming payments and to pay your business expenses. You can link this account to your accounting software (more on that later) to easily track your cash flow. As a bonus, most lenders require a business bank account if you seek financing, so it’s good to go ahead and get your account set up as soon as possible.

Build A Cash Reserve

Even if your cash flow is positive now, things can change in an instant. It’s best to be prepared for these potential setbacks with a cash reserve. Having a cash cushion at the ready can help you navigate unexpected financial challenges — seasonal slowdowns, an emergency expense, or a pile of unpaid invoices, for example.

A general rule of thumb is to keep at least three months’ worth of expenses as a buffer. This number may be adjusted up or down based on your specific cash flow situation and the needs of your business. While setting your own funds aside for this purpose is best, you may also choose to add a business credit card, revolving line of credit, or bank overdraft protection in the mix to further boost your reserves.

Keep Track Of Money Owed

Do you invoice your customers immediately, or do you tend to procrastinate? Once you’ve sent the invoices, do you stay on top of payments by sending out statements and reminders … or does this typically fall through the cracks?

Keeping up with money owed to you and actually collecting it is critical to maintaining a healthy cash flow. Sure, you may be working with a positive cash flow now, but what happens next month when those invoices remain unpaid? Accounting software makes it easier than ever to create professional invoices, send invoices to clients, collect payment, and even set up automated reminders or recurring invoices to repeat customers. Which leads us to…

Choose The Right Accounting Software

Accounting software is a must-have for any business. There’s a long list of reasons why you should be using accounting software, but one of the most important is that it allows you to track money that’s coming in and out of your business — often, in real-time, depending on your software’s capabilities. You can also send invoices, statements, estimates, and payment reminders. Additional features offered by your software may include inventory tracking, payroll, and other helpful tools to help you maintain and grow your business.

If you’re new to accounting software, take a look at our software reviews and our top picks, and give a few programs a try. Some are free to get started, while others offer free trials. If you already use accounting software, evaluate its features to determine if it’s offering everything you need to manage your cash flow.

Stay On Top Of Your Accounting

Finding the right software for your business is only the first step. To efficiently and effectively manage cash flow, it is up to you to monitor and maintain accurate accounting records.

Sure, your software will automate a lot of processes that you don’t have to perform manually (for example, automatically updating transactions through live bank feeds). This doesn’t mean that you can set it and forget it. Make a habit of looking over your transactions, checking in on unpaid invoices, and performing other tasks to ensure your cash flow is stable.

Run Reports

Another way to track your cash flow both now — and in the future — is with reports. Remember that accounting software we talked about? Most programs can (at the very least) pull basic financial reports, giving you an overview of your current cash flow situation. You may even have access to advanced reporting that allows you to look at future cash flow projections based on current and previous trends. You can use these reports to determine where you’re falling short (i.e., unpaid invoices or an expense that can be cut) and make changes to maintain your cash flow.

Know Your Risks & Be Prepared

Running your own business can be, well, risky business. A number of challenges can affect your cash flow — from a slow-down in customers to a more widespread crisis. In the 2000s alone, we’ve already faced the Great Recession of 2008 and the COVID-19 pandemic of 2020 — and no one knows what the future holds. However, you can assess risk and be prepared for these situations.

Since every business is different, the risks and challenges you face will be unique to your business. Think of possible scenarios that may have a significant impact on your business (and your cash flow). Use your accounting software or reports to look over the numbers and experiment with different scenarios. For example, what would happen if you lost one of your biggest clients? What would happen if you were forced to shut your doors for a week … or longer? Knowing the numbers and running through various scenarios can help you determine factors like how much money you need to bring in to continue to operate, where you could cut expenses if absolutely necessary, and could help you plan for the future — no matter what it may hold.

Getting A Handle On Your Business’s Cash Flow Management

Managing your cash flow doesn’t have to be difficult, especially when you’re willing to put in a little time to track the numbers, analyze your cash flow, and use software and tools that are at your disposal. Looking to improve your cash flow? Check out our post on 10 Strategies To Improve Cash Flow. Want to boost your cash flow? Take a look at our article The Best Cash Flow Loans For Small Businesses In 2020.

For now, though, focus on strategizing, planning, and tracking your cash flow to keep your business more secure now and in the future. Good luck!

The post How To Maintain A Healthy Cash Flow For Your Business appeared first on Merchant Maverick.

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October 15, 2020

Everything You Need To Know About Doing Payroll In California

Small business owners in California who run their own payroll are responsible for paying the right payroll taxes — and paying them on-time. To avoid legal penalties and serious consequences, it’s vital to know what payroll rules businesses in California need to follow.

These laws can get complicated, since California has a unique blend of state-level taxes in addition to federal and local ones. Letâs break down the payroll taxes you need to report and contribute when hiring employees in the state of California.

California Payroll Laws & Regulations

California requires multiple payroll tax contributions from both business owners and their employees. The different rates at which you and your employees contribute typically changes on an annual basis, and are broken down based on things like your employeeâs wages and how long your company has been in business.

Letâs cover how Californiaâs payroll laws and regulations affect your business and your employees at the federal, state, and local levels.

California Payroll Taxes

The Employment Development Department, or EDD, oversees California’s four separate payroll taxes: Unemployment Insurance (UI), Employment Training Tax (ETT), State Disability Insurance Tax (SDI), and California Personal Income Tax (PIT), which weâll cover in more detail later on.

As a business owner, youâre responsible for withholding the appropriate amount of taxes from each of your employees’ paychecks (and your own wages). Under most circumstances, employees also need to contribute parts of their paycheck toward State Disability Insurance (SDI) and Personal Income Tax (PIT). Weâll cover these in more detail later on, since they need to be paid in addition to federal taxes.

Employers pay contributions toward Unemployment Insurance (UI) and Employment Training Tax (ETT). Certain industries grant exemptions to some of these four state-level payroll taxes, although youâre typically responsible for withholding the proper amounts for these state-level taxes as a business owner.

The following California-specific taxes need to be withheld in addition to federal taxes:

Income Taxes: California sets its personal income tax based on an individual’s income. The state doesn’t cap its limit for how much it can tax personal income, which your employees are responsible for paying themselves. California calculates the tax rate for personal income tax based on supplemental tax rates, but employees can also withhold personal income tax on their W-4 form or DE4 (Employee’s Withholding Allowance Certificate)
Property Tax: California’s Proposition 13, enacted in June of 1978, capped the rate against which the state could tax real property at one percent. What’s more, the law requires that local elections achieve a two-thirds majority in favor of increasing this one percent. Since its passage, Proposition 13 has remained virtually unchanged and still applies to all residential and commercial real property in the state of California.
Sales Tax: The Bradley-Burns Uniform Sales and Use Tax Law of 1956 created sales and use taxes that split between the state, the city, and the county. California’sÂ current rate for use and sales taxes is 7.25%, six percent of which goes toward the state of California, one percent toward the local city or county, and the remaining toward local transportation. California uses additional district tax rates of higher than 7.25% for certain parts of the state.

California’s Tax Exclusions & Exemptions

California State’s Board of Equalization works with county-wide assessors to exempt religious, hospital, scientific, and charitable properties, or any properties that can be reasonably determined as owned and operated for nonprofit purposes. The board is also responsible for exempting properties qualifying for Welfare or Veteran’s Organization Exemption tax withholdings. California relies on the Board of Equalization to work with county-wide assessors to decide on how best to administer additional property tax exemptions for the state.

California’s Minimum Wage

Just like other states, California has minimum wage laws that business owners need to follow when they record and report their payroll. For businesses that staff fewer than twenty-five employees, owners must pay a minimum wage of eleven dollars per hour. Any business that staffs more than twenty-six employees must bump their minimum wage up by a dollar, to a wage rate of $12/hr.

One of the highlights of California’s minimum wage laws is the way they deal with tipped employees. There’s no reduction in the minimum wage rate that tipped employees receive. Employees still need to form a collection amongst themselves, though, to pool tips and share it equally among their co-workers.

Itâs good practice to document your minimum wage rates for each fiscal year and report changes you make to your companyâs minimum wage policy.Â California is relatively strict about compliance poster obligations for business owners. The state asks that all business owners post their business’s policy regarding wages earned, which includes minimum wage rates.

Reemployment Tax

California uses its UI tax to keep compensation programs afloat for people who are unemployed. Any employer who has spent more than one-hundred dollars on employee wages needs to record and report UI taxes. This is an important difference between California and most other states, which usually follow federally mandated unemployment tax provisions. California’s cap on annual taxes paid to the state — $7,000 — applies to UI taxes as well. The EDD is responsible for modifying the rate schedule unemployment insurance uses on an annual basis. Business owners take that year’s given rate schedule and contribute 3.4% for at least two years.

New Hire Reporting

You’re responsible for reporting new employee information to the California New Employee Registry within the first twenty days of their employment. These reports also go to the EDD, so be careful not to miss deadlines for reporting information on your new employees.

This rule also applies to anyone you’re rehiring if it’s been more than sixty days since their departure. Your information on new hires, as well as rehires, gets reported straight to the New Employee Registry (NER), which helps California work on existing new hire reporting laws. Currently, California does not offer any exceptions for new hire reporting. If you hire or rehire a new employee, you must report their first and last name, social security number, home address, and the date they began work.

California’s Fair Employment and Housing Act requires business owners to adopt equal hiring policies. It’s against the law to discriminate against potential hires on the basis of their race, sex, gender, and much more. The state offers employees multiple ways to file a claim for workplace discrimination. At the state level, the California Department of Fair Employment and Housing (DFEH) is responsible for addressing workplace discrimination claims; the same is true for the Equal Employment Opportunity Commission (EEOC) at the federal level.

PTO Policy

Technically, you’re not legally bound to give your employees vacation time and PTO if you operate your business in California. With that said, it’s a good idea to have a way for employees to accrue a fixed amount of PTO per year so that they can take some personal time off. If you do establish a company-wide PTO policy, California considers the PTO you distribute as wages earned by an employee.

California does, however, mandate paid sick leave to be given to all exempt and nonexempt employees. And, if an employee collects more PTO than they use in a given year, youâre responsible for paying the amount equal to wages accrued. You need to do the same thing for employees who quit or are fired, since PTO distributed under PTO policies is technically wages owed to your employees.

Labor Laws

California defines rest breaks as 10 minutes of paid rest. The state makes a compromise with employers by defining lunch as an unpaid break of 30 minutes. However, employers are responsible for paying employees a paid hour of time worked if they don’t get to take a break on a given day.

Certain urban districts in California require that employers pay out sick leave to their employees. This varies based on the area, but it’s important to be aware that the state fines businesses that don’t comply with these labor laws. These rules are typically most common in urbanized districts with different local-level laws.

Child Labor Laws

California’s child labor laws prevent anyone who is 13 years old or younger from working at a business operating within the state. Labor laws in California restrict people who are under 18 years old from working without a permit. Youth between 12 and 13 years old can only work during school holidays and vacations, and only up to four hours per week. The laws exist generally to prevent persons under 18 years from providing exploitable labor and economic vulnerability.

Payment Obligations

You’re responsible for paying your employees twice monthly on your designated paydays. Per California’s Labor Code Section 207, business owners need to show some proof of payment to their employees. This notice of proof includes when you paid an employee, the day you paid them, and where they were paid. For employees whom you have terminated, youâre required to reimburse them with any remaining unremitted wages they have earned.

Disability Insurance

Your W2 employees fund their own insurance for state disability, usually referred to as State Disability Insurance (SDI). This means you can choose to provide benefits for disability insurance on top of what your employees already get. These laws can get trickier for 1099 contractors who don’t do business for you or anyone else within California.

Insurance for state disability accounts for illness or injury that happens in your place of business. You need to withhold the SDI rate against the first $122,909 of your employee’s wages. Your employees are responsible for contributing taxable income toward this state-mandated program, and as of 2020, the rate for SDI taxes is one percent of their annual wages. Employees can’t contribute more than ten percent of their first $122,909 in annual income toward SDI taxes.

Workers’ Compensation Insurance

Rates for your workers’ compensation coverage start with work classifications for your employees’ positions. Perhaps you staff someone whose class code comes out to a nice, round number you can use to calculate their rate, say $0.50. Take their salary, another hypothetically round number of $100,000, and divide that by 100. You’re left with the following formula: $.50 x $1000. Obviously, this will change based on your employeesâ state-designated class codes and salaries earned, but this formula gives insight into the calculations you can expect to see.

Workers’ compensation provides required coverage to employees in nearly every state of the country. In California, businesses are required, at a minimum, to put down $500,000 toward a workers’ compensation insurance policy for their company. You need to cover each of your employees with $100,000 and put the same amount toward a minimum limit toward occurrences your plan covers. Employers are allowed to dispute claims for occurrences off-premises of work or during volunteering. You are still, however, required to cover injury and illness that occurs during work hours.

How To Calculate Payroll Taxes In California

California’s federal-level payroll taxes include the Federal Unemployment (FUTA), Social Security (FICA), Medicare (FICA), and Federal Income (FIT) Taxes. You can calculate payroll taxes at the federal level in California largely the same as you would in other states.

Employers are responsible for contributing toward these tax withholdings except for FIT, while employees only contribute toward FICA and FIT.Â Remember that California also requires employer and employee payment toward UI, ETT, SDI, and PIT Taxes.

How To Do Payroll In California

Now that you’re familiar with California’s different levels of payroll taxes, you can begin looking at ways to submit your payroll reports and how to accurately calculate what you owe the state and federal governments.

Step 1: Make Sure You’re Following All California Payroll Laws

Be certain that you have the correct state and federal forms to submit payroll by each due date. Federal forms (Form 941) and state forms (DE9, DE 9C) should be submitted on a quarterly basis. Business owners who miss these deadlines are subject to federal and state penalties that accrue exponentially the longer you wait to report your payroll.

Step 2: Gather Employee Documentation

Now that you’re ready to calculate your payroll contributions, you can decide on the way you’ll report your information. Choose either a printed or digital version of the Deport of New Employee(s) (DE 34) form, a completed W4 form, or an in-house form that satisfies the California New Employee Registry’s requirements. Remember that you need to start processing payroll for employees who’ve started work within the last twenty days.

Step 3: Calculate Your Employee’s Hours

Once you’ve picked your method to submit payroll information, make sure you have the correct rates to calculate your four different taxes: UI taxes, ETT taxes, SDI taxes, and PIT taxes. As a refresher on calculating California’s four state-level taxes, remember to:

Contribute a percentage between 3.4 to 6.3% of the first $7,000 of your employee’s wages. The percentage you contribute depends on how long you’ve been in business.
Put .1 percent of an employee’s initial $7,000 of reported income toward ETT. You’ll be contributing seven dollars to each person you staff annually.
Remind employees that they are responsible for submitting one percent of SDI-taxable paychecks on an annual basis against the first $122,909 of their wages.
Ensure all of your employees have completed a W4 form or DE 4 to report PIT tax.

For businesses with just a few people, you can consider using the wage bracket method to calculate payroll. The Wage Bracket method relies on your manual input, so be sure to closely follow the instructions detailed in the stateâs 2019 withholding schedules. The Exact Calculation method should be used when you need to automate your calculations. Multiple small business payroll software processing solutions exist to do just that. We suggest that you take advantage of any of the powerful payroll software tools available to crunch your staffâs payroll contribution numbers without errors.

The post Everything You Need To Know About Doing Payroll In California appeared first on Merchant Maverick.

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October 14, 2020

The Complete Guide To Doing Payroll In QuickBooks

Millions of small business owners rely on QuickBooks Desktop to handle their accounting tasks. If you’re reading this, then you’re one of those people … or maybe you’re shopping your software options and are ready to sign up for QuickBooks. No matter what the case, QuickBooks is a leader in the industry because of its feature-packed software, which helps you balance the books, track expenses, and even pay your employees.

One of the standout features of QuickBooks Desktop is its payroll. This software makes it quick and easy to pay your employees on time each pay period while providing adding benefits to you such as calculating payroll taxes and even filling out tax forms.

Unfortunately, though, the purchase of your license or the monthly subscription fee for QuickBooks Desktop doesn’t include payroll. QuickBooks Payroll is an add-on that costs an additional fee. Depending on the plan you choose, you’ll pay $29/month – $109/month plus an additional $2/month per employee (either per paycheck or per month, based on your chosen plan). The good news, though, is that you may be able to give QuickBooks Payroll a test drive through a 30-day free trial before you make the commitment. You may also qualify for discounts, which are available through the QuickBooks Payroll website.

Some more good news? Once you’re signed up for a subscription, QuickBooks Payroll can be accessed easily through your QuickBooks Desktop dashboard — no additional downloads required. Within minutes, you can set up and process your payroll.

In this guide, we’ll walk you through all of the steps to get your payroll off the ground in QuickBooks Desktop, from helping you gather the proper documentation to submitting your first payroll successfully. Ready to pay your employees? Let’s get started with QuickBooks Payroll.

Are you using QuickBooks Online? Check out our guide How To Do Payroll In QuickBooks Online to get started.

What You Need To Run Payroll In QuickBooks

To make the process of setting up QuickBooks payroll as quick and easy as possible, gather the necessary documentation and information first before you even get started with the software. We’ll go through everything you need to set up and process payroll. Later on in this post, we’ll go step-by-step through the process so you’ll know exactly when to use these documents and information.

W-4s: For tax purposes, you’ll need a completed and signed W-4 for each employee.
Pay Rates: What does each employee make within your company? Are they hourly, salaried, or commission-only?
Pay Schedule: How often do you pay your employees: weekly, bi-weekly, monthly, or on another schedule?
Basic Employee Information: You will need basic information for each employee, including their legal name, address, birth date, hire date, and termination date (if applicable).
Deductions: If your employees have certain deductions, you should know the type of deduction and the amount. Some common paycheck deductions include wage garnishments, employee contributions to retirement accounts, and health insurance premiums.
Sick Time & Vacation Hours: What are your company’s policies on sick time and vacation hours? Before setting up payroll, you should know this policy, as well as have documentation of current balances for each employee.
Compensation & Additions: To set up payroll, you’ll need information about compensation and paycheck additions for each employee. Some of the most common include mileage reimbursements, travel reimbursements, cash advances, or Flexible Spending Accounts.
Direct Deposit Information: If you offer direct deposit, you’ll need the routing and account numbers for each employee that prefers direct deposit over receiving a paper check. Have each employee fill out a direct deposit authorization form and provide a voided check to help make the process error- and hassle-free.
Company Bank Account Information: If you’re going to use direct deposit, you’ll also need to have your business bank account information handy so that funds can be drawn from your account and paid to your employees.
Tax Information: It’s no secret that you have to file and pay taxes. To simplify the payroll tax process, make sure you have information on hand including your state ID numbers and Federal Employer Identification Number (FEIN).
Prior Payroll Information: If you’ve currently been paying your employees, have your prior payroll information on hand so that payroll taxes can be accurately calculated.
QuickBooks Payroll Subscription: Unfortunately, QuickBooks Payroll does cost an additional fee each month. Make sure that you have signed up for the plan that’s best for your business. This can be done directly through the software or by visiting the QuickBooks Payroll website.

How To Set Up Payroll In QuickBooks

Sometimes, QuickBooks Desktop can get a bit confusing.

Fortunately, when it comes to payroll, Intuit has really simplified the process with a step-by-step payroll setup tool that walks you through the process. Let’s go through this process together so you can have your payroll up and running in no time.

If you’re still feeling uncertain before you get started, you can always practice using a sample company file like I’m using for this guide. This allows you to practice and test out payroll to get the hang of the system before running your own payroll. Whether you’re using your own company file or a sample, follow these steps to get started.

Step 1: Open QuickBooks Payroll Setup

Once you’ve gathered all of your documentation, it’s time to get started with setting up your payroll. Start by opening the QuickBooks Payroll Setup tool. This can be done by selecting “Employees” at the top of your screen, then selecting “Payroll Center” from the dropdown menu. Once the Payroll Center opens, select the menu option “Payroll Setup” to get started.

Step 2: Set Up Compensation

Once you’ve opened the Payroll Setup tool, the first step is to enter and/or confirm information about your company’s benefits and compensation.

For compensation, there are several options that may be used by your business. Those include:

Overtime Rate: Overtime pay for hourly employees.
Regular Pay: Hourly pay for employees.
Salary: Used for employees that receive a salary.
Bonus: Used for any bonus payments.
Mileage Reimbursement: Used if you reimburse employees for miles driven.

You have three options in this menu. You can delete any type of compensation not used by your company. You can also add any additional compensation that’s not already on your list. You can also edit entries on your list. If you choose to edit entries, you can change how the compensation is shown on paychecks, make the payroll item active or inactive, select the account type, and change the account name.

Once you’ve confirmed these entries, click Continue, and you will move onto the next section: Employee Benefits.

Step 3: Set Up Employee Benefits

In this section, you’ll add and edit employee benefits offered by your company. You’ll also add pay additions (such as mileage reimbursements or cash advances) and deductions (such as wage garnishments.) Some options include:

Insurance Benefits: Workman’s Comp
Retirement Benefits: 401(k), Simple IRA, 403(b), 408(k)(6)SEP, 457(b)
Paid Time Off: Sick Hourly, Sick Salary, Vacation Hourly, Vacation Salary
Miscellaneous: Direct Deposit, Health Insurance

Now that you have all of your compensation, benefits, additions, and deductions added, it’s time to add the numbers for each employee.

Step 4: Set Up Employees

Remember those W-4s and pay rates from earlier? It’s time to pull those out because we’re going to set up your employees.

Personal Information

To set up a new employee, start by selecting the “Add New” option. In this section, you’ll need to provide the following information:

Legal name
Contact information
Employee type
Social Security Number
Hire date
Release date
Birthdate
Gender

Pay Rates & Schedules

After entering this information, you’ll need to input the employee’s pay rate and schedule. You can also set overtime rates or add a bonus, as well as mileage reimbursement and health insurance costs.

Next, you will input how sick pay is calculated. You will need to enter information including how many hours of sick pay the employee receives, when these hours begin (i.e., at the beginning of each year), what happens to unused sick hours, and current balances. Once you’ve entered this information, you will do the same for vacation pay.

Direct Deposit

If your employees are receiving their pay via direct deposit, the next step is to add this information.

You can set up direct deposit for up to two accounts per employee. You also have the option to provide your employees with prepaid cards that can be used to receive their direct deposits. Cards can be requested through the setup tool. If you opt to not use direct deposit, you can pay your employees with a paper check.

State Tax Withholdings

After setting up direct deposit information, you will answer some tax questions about the employee. These include:

State subject to withholding
State subject to unemployment tax
Did the employee live or work in another state?

Confused as to how to fill this out? Fortunately, QuickBooks has help menus throughout the setup process, making it easier for you to ensure that your payroll is set up correctly.

Federal & State Tax Information

For this section, pull out the employee’s W-4. Use the information provided on the form to enter the employee’s filing status, number of allowances, extra withholding amounts, and other withholdings and credits.

Once you click “Next,” you will provide the same information for the state.

After wrapping up this section, you’ll be able to save the employee’s information. The employee’s name, social security number, and a summary should now appear in the Employee List.

If there is missing information or an error, the error will appear on the Employee List. Review each entry for error notifications and correct each as needed. The summary section in the Employee List will specify the exact error, so you don’t have to fumble around trying to figure out what is incorrect or missing.

You can revisit the Employee List as needed to update employee information, correct errors, add new employees, or delete employees as needed.

Step 5: Set Up Payroll Taxes

Paying taxes is a burden that we just can’t avoid. However, you can make the process a little less painful by using QuickBooks Desktop to calculate and even file and pay your payroll taxes. Let’s walk through how to set up your payroll taxes.

Federal Taxes

When you enter the Federal Taxes section, you’ll notice that QuickBooks has already set up several different taxes. This includes federal withholding, federal unemployment, Medicare for the company and the employee, and Social Security for the company and the employee.

The rates for these taxes are already set, so you don’t have to worry about calculating rates. However, you do have the option to Edit each type of tax by changing how it is shown on paychecks, editing the expense account, or editing the liability account. In most cases, you won’t be making any extensive edits in this section.

State Taxes

The next section is State Taxes. In this section, you may have to make some edits. There are several state taxes already set up for you, including state withholding and employee disability. The description shows the current rate.

However, if these rates need to be corrected, simply click on the tax that requires the correction, select “Next,” and make the necessary changes. If you’re unsure of the rates, click the link marked “Explain” and QuickBooks provides more information. Once all changes have been made, save your changes and proceed to the next section.

Scheduled Payments

In this section, you’ll set up your required tax payments. In the Scheduled Payments column, the types of payments are listed. In the Description column, the method of payment and the frequency of payments are listed. You can edit information such as the frequency or the payee by highlighting the payment and selecting the Edit option.

Step 6: Enter Year-To-Date Payrolls

If you’re paying employees for the first time, you can skip over this section. However, if you have employees that have been paid in the current year, you’ll be required to input year-to-date payrolls in order to make sure that tax payments and paychecks are accurate.

This section may take a bit of time depending on the number of employees you’ve paid and the number of checks issued.

Fortunately, QuickBooks has detailed instructions right on the page and the tool is pretty easy to use. You will input information such as the check date, pay period, check number, employee pay, and tax withholdings. This step will need to be completed for every employee that has been paid in the current year prior to using QuickBooks Payroll.

Next, you’ll need to enter payroll tax payments that have already been made.

QuickBooks will calculate the amount you’re required to pay, compare it to the total you’ve already paid, and show your remaining balance.

Finally, you’ll enter non-tax payments such as workman’s comp and health insurance. Again, QuickBooks will calculate the amount owed and use what you’ve already paid to show any remaining balance due.

Step 7: Finish Up & Prepare To Run Your First Payroll

Congratulations! If you’ve done all of the steps as outlined and have entered all employee and tax information correctly, your payroll is now set up and ready to go. At this point, you are ready to run your first payroll. You also have the option to go back through the tool and make any additions or corrections as needed.

Though the setup is pretty lengthy, it’s important to make sure that you take your time to accurately enter all information to ensure that your employees are all paid the correct amount on time and that payroll taxes are accurately calculated so you know exactly what needs to be paid and when to pay it.

How To Do Payroll In QuickBooks

Now that you have everything set up, it’s time to process your first payroll. Just follow each step, take your time, and you’ll have your employees paid in no time!

Step 1: Set Pay Schedule

The first step you need to take is to make sure that your pay schedules are accurate. In the Payroll Center, your pay schedule(s) should appear based on the information you added when setting up your employees. The Payroll Center shows information including:

When to process payroll by
The payroll status
Payroll schedule (frequency)
Pay period
Check date

If any of this information is inaccurate, you can use the payroll schedules button to edit, delete, or add a new payroll schedule.

Step 2: Start A Scheduled Payroll

Select your payroll schedule and click the Start A Scheduled Payroll option. In this section, you can review the payroll schedule, the number of employees being paid, the bank account being used to pay employees, the balance of that account, and check options. Check to make sure all information is correct and make edits as needed before selecting Continue.

Another thing to note is that if you’re running payroll off schedule, the Payroll Center also offers the option to run an unscheduled payroll.

Step 3: Check For Accuracy

Once you click Continue, you’ll be able to see a detailed breakdown of each employee’s paycheck. You’ll see gross pay, deductions, taxes, total hours, and other information for each employee. You’ll also be able to see accumulated totals for all employees. Check to ensure accuracy, then select Create Paychecks.

Step 4: Print Checks

Once you’ve selected Create Paychecks, you’ll see a pop-up that shows the number of paychecks available for printing and the number available for direct deposit. You’ll now have the option to print paychecks or paystubs. Once you return to the Payroll Center, you’ll see that the information for your next payroll is listed under the Create Paychecks section. The payroll that was just processed will be listed in the Recent Payrolls section.

Step 5: Explore Other Payroll Center Options

There are lots of options available directly in the Payroll Center. Some other tasks you can complete include:

Setting up direct deposit
Add employees
Edit or void paychecks
Create termination checks
Print paychecks
Run reports
Pay taxes and liabilities
File forms

If you don’t want to mess up your company file, using one of QuickBooks’ sample companies is an easy way to get the feel of the payroll system without worrying about making a potentially costly mistake.

If you get stuck at any point, go back through this guide or take advantage of the in-software support options to properly set up and process your payroll.

Tackle Your QuickBooks Payroll With Ease

Running payroll for the first time can be a little intimidating. But with QuickBooks, it’s all very straightforward and simple — even if you’re brand new to payroll and accounting. Just make sure to take your time, follow the steps in this guide, and utilize the help and support resources available to you within the software. Good luck!

The post The Complete Guide To Doing Payroll In QuickBooks appeared first on Merchant Maverick.

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October 7, 2020

Regular 3508 or 3508ez: Which PPP Forgiveness Form Is Right For My Small Business?

The Paycheck Protection Program (PPP) was created to provide financial relief to businesses suffering from the effects of the devastating coronavirus pandemic. Between the program’s creation and August 8th, 2020 â the day the program closed to new applicants â $669 million in forgivable SBA-backed PPP loans was distributed by lending institutions participating in the program.

If you received a PPP loan for your business, you can have the portion of the loan you used for qualifying purposes forgiven by the SBA. (Read our PPP loan forgiveness guide for details on how loan proceeds must be used to qualify for forgiveness)

Of course, to get your loan forgiven, you’ll first have to apply for forgiveness and have your forgiveness application accepted. While it’s true that legislation has been proposed in Congress that would make forgiveness of PPP loans under $150,000 nearly automatic, this legislation has not been passed by both houses of Congress, and there’s no guarantee that it will become law anytime soon. That’s why you may want to apply for forgiveness now, especially if you’ve spent the entirety of your PPP loan.

You’ll need to apply for forgiveness through the lender that serviced your PPP loan, not the SBA itself. To do this, you’ll need to submit one of the two available forgiveness application forms, depending on your circumstances: SBA Form 3508 or SBA Form 3508EZ.

I should point out that you’ll need to submit more than just a completed application form to qualify for loan forgiveness. Depending on how your loan funds were spent, you may also need to submit payroll documentation, bank statements, account statements, tax forms, receipts, and/or canceled checks in order to support your forgiveness claim. However, this article is exclusively dedicated to the two forgiveness application forms available.

In this article, we’re going to discuss the circumstances that call for using PPP 3508 vs 3508EZ.

As the name suggests, the 3508EZ application is the easier of the two forms to complete, as it doesn’t require you to fill out a Schedule A form or a Schedule A Worksheet (forms used to calculate total eligible payroll costs incurred). However, you have to meet certain criteria to use the easier form; otherwise, you’ll have to fill out the longer 3508 form.

When To Use The Regular 3508 Form

The 3508EZ PPP forgiveness form is shorter and easier to fill out, so, it will require less of your time than the standard 3508 form. However, if you don’t meet the requirements of the EZ form, you’ll have to take the time to fill out the longer 3508 form.

You’ll have to fill out the regular 3508 form if both of the following conditions are met:

When you originally applied for a PPP loan, you were not a self-employed borrower, an independent contractor, or a sole proprietor with no employees.
You reduced the salary or wages of employees earning less than $100,000/year by more than 25%.

If, on the other hand, you’re not self-employed/an independent contractor/a sole proprietor with no employees and you did not reduce the pay of employees earning less than $100K/year by more than 25%, you’ll still have to use the regular 3508 form if both of the following are true:

You reduced your number of FTE (full-time equivalent) employees.
You were still able to operate at the same level of business activity as before February 15th, 2020.

When To Use The 3508EZ Form

If you’re eligible to use the 3508EZ form when applying for PPP loan forgiveness, congrats! You’ll get to save some time and energy. However, you’ll have to meet at least one of the following three criteria in order to be eligible to use the 3508EZ form:

You are a self-employed individual, an independent contractor, or a sole proprietor who had no employees at the time you applied for a PPP loan
You didnât reduce salary or wages of employees making under $100K/year by more than 25% and you didn’t cut any FTE employees (other than employees you were unable to rehire and unable to replace with similarly-qualified employees)
You didnât reduce the pay of employees making under $100K/year by more than 25% and you were unable to operate at the same level as you had on February 15th, 2020, because of COVID-19 health and safety restrictions imposed by federal agencies.

Summary: Regular VS EZ Form

Here’s our final word on the PPP forgiveness 3508 vs 3508EZ comparison:

The 3508EZ form was conceived as a way for businesses to reduce the amount of paperwork required to apply for forgiveness of their PPP loan. However, only certain businesses are eligible to use the simplified form. While anyone who is self-employed, an independent contractor, or a sole proprietor who had no employees when they applied for a PPP loan is eligible to use the EZ form, it gets more complicated from there.

If you reduced the pay of your employees by more than 25%, use the regular 3508 form. If, on the other hand, you didn’t reduce the pay of your employees by more than 25% and can meet one of two other conditions (you didn’t cut any FTE employees or you couldn’t operate your business at the same level as you had back on Feb. 15 due to federal COVID-19-related restrictions), you can use the simplified 3508EZ form.

More On PPP Forgiveness

PPP EZ vs regular, Schedule A, etc. â it’s enough to give you a headache. We know this process is more complicated than it ought to be. Unfortunately, the current legal state of play requires businesses to navigate a complex web of considerations when trying to get a PPP loan forgiven by the SBA.

For more on getting your PPP loan forgiven, read our PPP forgiveness guide. You should also check out our COVID-19 hub as it gives you a base from which to explore all our content related to guiding your business through this pandemic.

We’re always here to help, so don’t hesitate to leave us a comment if you have any questions about COVID-19 business relief, PPP loan forgiveness, or anything else relating to the challenging times we find ourselves in.

The post Regular 3508 or 3508ez: Which PPP Forgiveness Form Is Right For My Small Business? appeared first on Merchant Maverick.

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September 30, 2020

The Best Payroll Practices Every Business Owner Needs To Know

As a small business owner, managing your own payroll may not always seem like a priority. Let’s face it: between juggling submission dates and figuring out what paperwork you need to fill out, payroll can be a chore that falls to the wayside. And itâs easy to see why, when so many businesses manage their payroll without following any best practices.

Even if youâre doing your employeesâ payroll as a solo job, best practices will help you keep track of submission requirements and deadlines without affecting how much you get done. Read on to discover nine payroll best practices you can start working on today to make your payroll process a breeze.

The 9 Best Payroll Practices For Small Businesses

These nine best practices, if followed carefully and regularly, can make managing your payroll go from nightmarish to predictable.

1) Classify Employees Correctly

Your payroll process relies on you properly classifying your employees. If you only staff a few people whom you know and trust, the idea that you might be at risk of misclassifying your salaried employees may just seem silly — but it’s no laughing matter. Your company can quickly run into serious, tax-related issues with the IRS if you misclassify someone as a 1099 contractor, for example, when they’re really working for your company as a W2 employee.

In fact, based on state-level research, somewhere between ten and twenty percent of employers are guilty of misclassifying workers, recording an employee as a 1099 contractor, for example, instead of as a salaried W2 employee. Mistakes like that can ultimately impact your company’s revenue if you get hit with federal-level fines. Before you get your payroll process going, doublecheck that you have each and every one of your employees correctly classified, no matter how many of them you employ.

2) Spend The Proper Amount On Payroll

Small business owners often worry that their cash flow will affect their payroll deadlines, and for good reason. If you don’t know how much of your revenue to put toward your payroll, an unhealthy cashflow could be disastrous. Setting aside the proper amount for payroll ahead of time will keep your system chugging along just fine without any cash flow-related hiccups.

One of the most critical payroll best practices is to make sure your business has a positive cash flow before estimating the amount of your gross revenue to put toward payroll expenses. Once you’ve adopted a few strategies to increase your cash flow, it will make much more sense to then go ahead and carve out a rough (while youâre starting out) percentage of funds you should be spending on payroll.

It’s not the end-all, be-all number, but as a small business owner, you should beÂ keeping your payroll below 30 percent of your total gross revenue funds. Staying at (or preferably below) this number will still make it realistic for your business to manufacture its products and provide its services without confronting negative cash flow numbers.

The great part about planning on a set amount of funds to put toward payroll is that you can always scale that amount up or down in the future. You and your HR and/or payroll manager can decide to move funds around if you notice that you’re spending too much or too little on payroll after a few months. Your business will enjoy increased profitability once you have methods to keep your cash flow positive and youâre certain how much to spend on payroll.

3) Keep Track Of Dates & Deadlines

Collecting and completing your employees’ payroll documentation won’t do much good if you miss deadlines for submission. The Department of Labor has strict requirements about when and how small businesses must submit payroll documents. You and your company are at risk of being dinged with brutal fines if you neglect to pay attention to these deadlines.

Keeping track of your submission dates and deadlines is a great way to help you plan out the rest of your payroll best practices. Many of the other important habits you develop will fall into place if you get your deadlines in order first.Â Some of the most important payroll tax dates and deadlines include:

Retirement Statements: Businesses are required to keep their employee’s statements of retirement, including enrollment, payment, and deduction forms, for at least six years.
Pay Stubs: As a business owner, you’re responsible for proving to the government that you pay your employees on-time, every quarter. To that end, you’ll need to hold onto pay stubs for four years, which includes any changes you’ve made to your wages along the way.
Additional Tax Info: Tax forms like employee W2s and W4s are required to be kept for at least four years.

On top of these federal deadlines, you need to make sure that you consistently set smaller deadlines for when your payroll must be processed monthly. Get all of these dates, whether theyâre on a monthly, quarterly, or annual basis, onto your payroll calendar. You can choose to use a cloud-based calendar app, for example, if you want to move your payroll operations completely online.

4) Set Payroll Notifications and Reminders

Keeping track of important payroll dates and deadlines is all well and good, but youâll probably want to set up a system of notifications and reminders to make sure you donât miss them as well. Companies have traditionally relied on physical calendars to keep track of tax deadlines and dates, but more and more businesses are now switching to cloud-based payroll solutions that sync up with important government submission dates and send them reminders automatically.

If you aren’t yet using software to help with deadline notifications, there are also plenty of calendar apps you can use to manually track dates. These calendar apps can sometimes be more beneficial for extremely small companies that only staff a few employees. Coordinate with your other employees and departments to settle on a notification and reminder solution that makes the most sense for your employees and the size and scope of your business.

5) Use Direct Deposit

Direct deposit, thankfully, has found its way into the vast majority of businesses’ payroll systems. Small business owners who use direct deposit to help manage their payroll process eliminate tons of manual work that they’d otherwise need to slog through.

Electronic deposits also make your end-of-year payroll reporting much more painless, since you won’t have physical files to sort through that you then need to furnish for reporting purposes. This takes a huge burden off you or your HR/payroll manager and frees up their time to help you continue to build out your businessâs internal infrastructure.

6) Use Online Payroll Software

There’s no reason to fuss with traditional ways of organizing payroll when thereâs easy-to-use, online payroll software available at the tips of your fingers. Instead of searching through filing cabinets to furnish important employee data every time a deadline rolls around, you can use powerful payroll software to make it easy to search through all your employees’ historical data and organize it the way you want.

What’s even better about powerful payroll software, and something that traditional payroll organization systems can’t offer, is flexibility and customization. No two businesses are alike, so it doesn’t make sense to settle for anything less than a solution that’s tailored to your needs. From help with taxes to HR compliance assistance, there are multiple online payroll options to choose from.

7) Create An HR Handbook

HR handbooks are a company’s standards, values, and ethical guidelines, put into words. As you may have guessed, these handbooks can be great ways to define your payroll processing procedures as well. Creating an HR handbook is one of the most effective methods of solidifying your payroll best practices and making it easier to follow them.

Try and get together with your HR and/or payroll managers to help you create an HR handbook. Your employees in HR and payroll can give you valuable insight into payroll best practices they already use themselves and can help you define answers for questions they frequently get in their day to day interactions with employees. Remember that your HR/payroll handbook should do a good job of answering frequently asked questions as well as defining your payroll best practices.

8) Have Organized Payroll Records

Keeping tidy, organized payroll records is essential for your own business records and taxes. First, you’ll want to settle on a storage solution to keep your records organized and in one place. There are multiple electronic payroll storage solutions that are easy to use and can be tailored to your business needs.

You also need to keep in mind which records you need to keep, and for how long. The IRS lets businesses know that most payroll records need to be kept handy for at least three years. For other, more sensitive payroll documents, like your employees’ retirement records, wage records, and tax information, there are different requirements for how long you need to keep them.

Organize your payroll system based on how many employees you staff, as well as how many additional documents you keep for your personnel. Choosing a good storage system will also go a long way to keeping your records organized for the long-term.

9) Protect Your Online Data

Strong cloud accounting security measures are the pretty bow that ties up your carefully planned best practices into one package. These days, there’s no such thing as having too many security measures in place to protect your digital assets, especially for assets as sensitive as your employees’ payroll records. Cloud-based security solutions put your employees’ sensitive data first and decentralize how you store your data so that it’s much harder to compromise.

Software solutions that protect your employees’ data on the cloud eliminate nearly all manual work you’d otherwise have to do. For instance, with cloud-based storage solutions, you don’t need to worry that youâre running out-of-date software with bugs that compromise its security. Smart solutions on the cloud will run updates for you, automate your account security and remediation activities, and immediately alert you about fraudulent or suspicious activity that it detects.

What Other Payroll Problems Does Your Business Face?

Payroll processing software and electronic solutions make doing your own payroll easier than ever. But as any business owner knows, there’s always something new to learn about payroll, no matter how long you’ve been doing it either on your own or with the help of colleagues.

As a business owner, are there parts of payroll that you still struggle with? What steps have you taken to try and resolve them? Leave us a comment below about your greatest challenges processing your own payroll, and the solutions youâve come up with to tackle them.

The post The Best Payroll Practices Every Business Owner Needs To Know appeared first on Merchant Maverick.

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