Using QuickBooks for Direct Deposit – Plus 5 Great Alternative Payroll Services for Small Businesses

by
Adam Rust

Unless you work in payroll, you probably didn’t start your small business so that you could learn about direct deposit. Nonetheless, everyone in small business wants to find ways to cut down on costs – especially for functions outside of your core competency. Every business owner loves finding a new opportunity to reduce expenses on administrative overhead. It’s what might be called a “no-brainer.”

Paying workers by direct deposit is a no-brainer. First off, you will save money. The National Automated Clearing House Association estimates that businesses spend two dollars each time they pay a worker with a paper check. Such a high cost might sound odd if you have never thought about it – after all, how much does it cost to write a check – but it reflects the real costs of your time, the risk of fraud, and the occasional snafu arising from a lost check. Your time is what counts the most. Direct deposit will save time – which is one of your most precious resources. Your employees will appreciate it as well, as they’ll have access to their pay on payday.

So, how do you go from paper to direct deposit? It starts with how you run payroll. Many small businesses pay workers in cash or check as a matter of technical proficiency, unaware that there are easy-to-use services out there that can work with any size company.

The first thing to understand is the pricing. The general rule across the industry is to charge employers a monthly base rate service fee plus a per-employee charge.

Many small business owners rely on an add-on QuickBooks service to facilitate the payment of wages by direct deposit.

At QuickBooks by Intuit, you can choose from several QuickBooks Payroll. Intuit’s “self-service payroll” package costs $35 per month. With self-service, employers can send direct deposits around the clock, calculate paycheck amounts, file year-end forms, and run an unlimited number of payrolls. With the Full-Service Payroll plan, you get all of that plus help with filing taxes, an option to run same day direct deposit, and assistance from customer service agents. With both, you will pay an additional four dollars every month for each employee.

To set up direct deposit, you will need to be able to give information to QuickBooks about both your company and the employee to whom you want to send wages. With regards to your company, QuickBooks needs to know your company’s zip code, the industry classification (there’s a drop-down menu), the email address of the firm’s principal owner, his or her 9-digit social security number, and date of birth.

Additionally, if the business owner is not the payroll person, then QuickBooks will ask for information about the person who has the responsibility to administer payroll. QuickBooks will ask you to verify your ownership of the bank account from which you want to withdraw funds to make the direct deposit. QuickBooks will make two micro-deposits, each of less than one dollar, and you’ll have to verify the amounts. Last, you’ll need to let QuickBooks know your employee’s bank account information: the routing number of the bank, the account number associated with the employee’s account, the name and address of the bank, and then the sum of funds to be withdrawn. Except for wages, you will only have to enter the information one time.

People tend to say that QuickBooks is a great out-of-the-box solution for small businesses who don’t mind a bare-bones product. Customer service can be mixed, but the simplicity of setting up your account means that you may never need much customer service support.

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Other great payroll options for small businesses

While many people use QuickBooks because it is the most likely product you will find on a shelf at a local retailer, I still think it is worth shopping around for the right fit. I have chosen services that would fit well with very small businesses that want a solution specialized to their needs: low cost, functional with only a few employees, and designed to reduce the work needed to establish direct deposit.

Gusto integrates critical functions that you will use at tax time with a flexible payroll and employee benefits suite. With the Core service, you can set up the direct deposit of payroll, establish a paid time off account, and administer a worker’s comp program. Additionally, it will help you create and deploy a benefits program. Currently, it costs a flat fee of $39 per month plus $6 for each employee to use the Core service. You can customize your plan, too. For example, you can build a 401 (k) program or establish a 529 college savings plan for your staff. Gusto is an excellent option for a growing business that wants to introduce a rich package of benefits for its workers. You can pay 1099s with Gusto.

OnPay:  If you more than one worker but fewer than ten, OnPay could be your lowest-cost option. It lets you manage up to 10 employees for a flat fee of $47.95. If your business grows and you need to add an 11th worker, OnPay charges only one dollar per employee after the first ten. You can run payroll as many times as you like. It can fit for the needs of unique businesses, too. For example, its system will accommodate for reporting on tips or to manage payroll with particular types of agricultural workers. It is possible to let employees manage their onboarding. Some people say that it needs to improve how it operates paid-time-off.

Payroll4free: There is no flat fee to use Payroll4free.com. It works well for brand new small businesses. The shortcoming is that you will have to do a lot of the work yourself. If you can survive without a lot of the extra features that a Gusto or an ADP might offer, then you try this company. You can pay 1099s, too. It’s an excellent service if you want to pay by direct deposit and manage the tax records associated with payroll. If you like, you can integrate QuickBooks into payroll4free.com’s system.  

Sure Payroll: Sure works best for companies in specific sectors: non-profits, restaurants, churches, and anyone who tends to hire nannies. It only takes about 30 minutes to run payroll with Sure.

Patriot Software: Another low-cost solution, albeit one with only a few services, that can work with even the smallest of businesses. Patriot has a useful app, making it possible to run payroll even when you are not in the office. Pricing for online payroll starts at just ten dollars per month. You can add support for fifteen dollars per month. With the full-service solution, Patriot gives you the tools to administer all of your tax filings.

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