Your business is growing, and so is the amount of time spent on Payroll. What used to take an extra hour or two on Friday afternoon has turned into your weekly headache. You know there has to be an easier way to manage your payroll, but you don’t know where to start. If you’ve used Quickbooks, then you may have noticed that they also offer their QuickBooks Online Payroll services.
Have wondered whether it would work for your contracting business? Here’s an overview of their services to help you decide if QuickBooks can meet your payroll needs.
QuickBooks Online Payroll Service Options
There are two options for having QuickBooks Online manage your payroll, either the Enhanced Service, or Full Service. Both options share many features, but with Full Service filing and paying taxes for you. The price difference is significant, so you need to consider how much of a value to your bottom line it provides.
First, let’s consider what they both share: on either service, you enter hours, and QuickBooks calculates the taxes and deductions for you. From there, you choose whether you want checks printed, or to take advantage of their free direct deposit. If you’ve used QuickBooks Desktop in the past, you’ll see a huge cost savings right there, since Desktop charges a fee for direct deposit. Your employees can view their paystubs and their W-2s online, and then use that information to calculate their next paycheck. This reduces questions for you, and frees up more of your time for working on your business.
Both versions offer unlimited payroll runs, and can be used with an app for mobile service. They calculate vacation pay, deductions, and garnishments. There are no long term contracts, but you do get free phone and chat support. These features in particular are great for contractors: they save you time in the office, and give you help without tying you to their service as your business grows.
The Differences in Service Options
So what separates them? Transfers and Taxes. If you are switching from another accounting software package, you can have QuickBooks transfer all your data for you under the Full Service plan. For the Enhanced Service, they provide a step-by-step guide so you can transfer all your data to QuickBooks yourself.
They can file electronically and print W-2s for you at the end of the year; whereas, Full Service files with the IRS, mails the W-2s, and submits your payment to the IRS for you. They guarantee that it will be filed – on time and correctly. If there are disputes with the IRS, then they will resolve them for you. They also handle the paperwork for new employees.
For some contractors, those services would be well worth whatever extra price QuickBooks decides to charge. But, how much extra is it? For QuickBooks with Enhanced Payroll, you will pay $27 a month for the first three months, and then $54 per month, with an additional $2 per employee per month. QuickBooks with Full Service Payroll is $57 a month for the first three months, and then $114 per month, with an additional $2 per employee per month.
Some Limitations to Consider
According to a review by accordantco.com, QuickBooks is still a general accounting software package that might not do everything you will need. It’s not specifically designed for construction businesses, nor is it a custom package for your specific company. So what are the challenges that contractors might expect when using QuickBooks Online Payroll?
- Neither the Enhanced Service nor the Full Service is specialized for union wages.
- QuickBooks Payroll can’t manage different taxes when you cross state lines.
- Certified payroll records are only available through QuickBooks Desktop; it’s not an option with either Online Payroll service.
- It doesn’t track hours, ethnicity, union status, work type, fringe benefits, or compliance issues the way that specific construction software does.
Many of these concerns won’t be an issue for the self-employed contractor, but it might hinder rapid growth of the business. If you plan on needing software that can handle these features, remember that QuickBooks doesn’t require long term contracts.
If you find that QuickBooks Payroll just isn’t right for your business, there are other options. Other software companies offer online payroll services, like payroll4construction.com which offers integration with QuickBooks or surepayroll.com which doesn’t. You could also consider a CPA to do your payroll for you. However, you have to interview CPAs for yourself, and see who’s a good fit for your business.
Of course, you can also roll up your sleeves and do it yourself. Some contractors love saving money by DIY payroll, and the confidence of knowing all they details. Others just don’t have those extra hours every week to devote to calculations and deductions.
Making the Choice
But, you may never need to do that. Many contractors swear by QuickBooks as easy, simple, straightforward, and valuable. If it saves you disputing with the IRS, that alone may add more than $50 to your company’s bottom line every month. QuickBooks Payroll offers two great options that can add value to your company by simplifying the payroll process.
The post QuickBooks Online Payroll: The Right Option for Contractors? appeared first on FieldPulse Academy.