QuickBooks software is the most widely-used accounting application for small businesses, according to Forbes. For decades, QuickBooks has been a popular option for small business owners and finance professionals to use on-premise, usually with one individual taking sole responsibility for accounting and payroll internally. More recently, QuickBooks has released a cloud-based version named QuickBooks Online, and along with it have come several new competitors in the online payroll and accounting software space.
While many of these platforms have similar features, relying on these accounting and payroll Software-as-a-Service (SaaS) applications also have many potential drawbacks for small business owners. The following are some of the things small business owners should take into consideration when choosing between a platform like QuickBooks or outsourcing these services.
Software and Add-On Costs
There are numerous versions of QuickBooks accounting software (beyond on-premise and online), depending on the depth of features that your organization needs. However, the monthly pricing that QuickBooks offers can be misleading, as it often doesn’t include add-on costs that are essential to doing business.
Specifically related to payroll, QuickBooks currently offers at least two add-ons for “Enhanced Payroll” and “Full-Service Payroll” that each require an additional fee per month, in addition to a monthly per-employee fee. While these “add-ons” may seem like optional features, they include important functions like direct deposit, online tax filing, the option to print and file W-2’s, and possibly most important feature of them all: the transfer of your existing payroll information.
On-Going Training
The more basic versions of QuickBooks are designed for users with limited accounting and financial needs This gives it less of a learning curve, but also means that it isn’t likely to have all the functionality and features that a business owner needs.
On the other hand, more advanced versions of QuickBooks require significant ongoing training to ensure that it is being used correctly. Most bookkeepers and accountants that have QuickBooks certifications and training are going to demand a higher salary than those that aren’t. And having an in-house, credentialed QuickBooks user means that on-going training will need to be planned for due to continuous updates to the software.
Liability
As a small business owner, relying on one internal employee to manage payroll can carry a high margin for error. Manual entry, limited training, and no support can result in errors than can be costly not only to the organization, but also to employees who may be on the receiving end of payroll errors and issues.
Consider all the different types of data that payroll includes: wages and salaries, time tracking, invoicing, expense tracking… the list goes on and on. When all of this information is manually entered by employees and/or novice QuickBooks users, there is always a risk of human error.
Benefits of an Online Payroll Provider
Using an outsourced payroll provider can help you retain control and flexibility of payroll, reduce risks and costs, and increase the overall efficiency of the payroll process. Even better, a provider can offer a dedicated payroll specialist, which can be beneficial for answering complex financial questions and free up a significant amount of time formerly being used for data entry and ongoing training.
Leveraging a Professional Employer Organization like Group Management Services also means that small business owners can look at payroll from a “big picture” standpoint, understanding how it ties into their overall business and talent management strategy. A PEO can also help organizations reduce risk and tie in benefits management to their overall payroll strategy.
In addition, PEO’s handle HR, compliance, unemployment taxes, recruiting, and a variety of other essential functions that small businesses may not have the internal resources or expertise to handle.
Contact GMS today to learn how a Professional Employer Organization can reduce risk and increase efficiency for small businesses.