Top 5 To-Dos for Small Businesses to Complete by January 31st

Written by Natasha Goncharova on . Posted in Accounting, Blog, Finance, HR

The important date of January 31st is almost upon us, the day when the IRS requires all businesses in the US to mail W-2s and 1099s to their employees. To make sure you’re on time each year, follow these few simple rules:

1. Collect SSNs or EINs (Employer Identification Number) and current addresses from your employees and contractors.

2. Reconcile books and payments via cash, checks, and direct deposits.

3. W-2: In most cases, your payroll service provider should automatically create W-2s so you will just need to check them, print, and mail. Otherwise, you will need to use Intuit Forms and print them.

4. 1099: Instead of using pre-printed 1099 forms and wasting time on positioning them correctly in your printer, consider using one of these services:
Intuit — $39 for an unlimited number of 1099 forms
Wagefiling.com — $3.49/form
• If you search for 1099 on the IRS page of the recommended e-filers, you will find other options, most of which will be more expensive if you want to e-file in addition to printing the 1099s.

5. Be aware of Form 1099-K

Beginning with tax year 2011, the IRS requires businesses to exclude from Form 1099-MISC any payments made by credit card, debit card, gift card, or PayPal. For information about the IRS requirements, review the IRS Final Regulations on Payment Card Reporting.

This means the amount you record on Form 1099-MISC must equal the total amount you paid the contractor minus any portion you paid by credit card, debit card, gift card or PayPal.

Any amounts you paid using these other methods of payment must be reported to the IRS, not by you, but by the credit card company, the debit card company, gift card company or PayPal using Form 1099-K. You do not need to report these amounts on Form 1099-MISC.

The deadline for this year is only one day away so if you haven’t started yet, get going!

Comparing HR Management Options for Startups and Small Businesses: PEO & SaaS

Written by Michael Tauscher on . Posted in Blog, HR

This is the second in a series of posts about HR management options. For an overview of the three types (PEO, SaaS, and Offline) see our first post: 3 Options for HR Management for Startups, Small Businesses, and Distributed Teams

Jump to section:

SaaS (Software as a Service) HR

PEO (Professional Employer Organization)

SaaS (Software as a Service) HR

While we are evaluating SaaS offerings for HR management, these are some of the reviews from the market.

GigaOM‘s Amber Singleton Riviere compares SaaS options targeted specifically at startups and small businesses. She offers a side-by-side view of TribeHR, BambooHR, EffortlessHR, and iEmployee. Below is an abridged version of the review along with available pricing information:

TribeHR
- Employee records
- Vacation/leave tracking
- Employee development tracking
- Employee notes and feedback
- Shared resources (including tracking of document views)
- Job postings
- Reports
Price: from $19/mo [15 users] to $399/mo [unlimited]

BambooHR
- Employee records
- Vacation/leave tracking
- Training time tracking
- Benefit tracking
- Online document storage
- Reports
Price: from $79/mo [50 users] to $599/mo [1000]

EffortlessHR
- Employee records
- Employee portal (employees can update information, request time off, clock in and out)
- Employee email
- Time tracking
- Shared resources
- Reports
Price: from $29.95/mo [19 users] to $99.95/mo [1000]

iEmployee
- Online pay stubs
- Time tracking
- Vacation/leave tracking
- Employee portal (employees can clock in and out)
Price: available by request on their website

In addition, Start2Cloud‘s Michal Pulda offers a comparison of TribeHR and OrangeHRM Live in the categories of functionality, customization, look and feel, browser, language & general support, and price.

While Orange is found to be more customizable and Tribe more intuitive, ultimately Michal recommends Orange for larger companies that need the flexibility of options like descriptive fields and custom report structure in addition to training courses that outline the features of the software. On the other hand, he prefers TribeHR for small companies that don’t need advanced features like employee time monitoring or time allocation among projects.

TribeHR is quoted at $19/month for up to 15 employees ($1.27/employee) with the most expensive option being $399/month for an unlimited number of users. OrangeHRM’s pricing is not publicly available, but Michal was quoted at an initial price of $6.25/employee/month with larger companies being able to access rates as low as $0.25/employee/month.

A more expensive and a more comprehensive alternative to HR Management are Professional Employer Organizations.

PEO (Professional Employer Organization)

A PEO is a third party company that acts as your company’s HR department in place of a part- or full-time employee. Not only will a PEO provide an ‘one stop’ branded HR portal for your employees, they will manage your benefit plans, FSA, and health insurance, and will search for the best health insurance plans to suit the scale of your business and needs of your employees.

Competitors in the field include TriNetADPStaffOne, and Oasis Outsourcing though a search of ESAC-certified PEOs in your state will provide many more options.

Pros:
- No time is spent on managing HR internally
- Employees often have a choice of multiple healthcare plans
- Rates may be comparable or even lower than hiring a part- or full-time employee to manage HR functions

Cons:
- The onus is on employees to check benefits, change preferences, and research healthcare
- The company must rely on the customer service of the PEO to update or make changes to employee information/benefit plans. For a first-hand account, read Ed Shull’s experience with TriNet.
- Employees may feel a “chasm” between themselves and their management since they must contact the PEO to discuss all HR matters

Disclaimer: We have no first-hand experience with any of the tools discussed in this post. All references to services, pricing, or experience are cited.

3 Options for HR Management for Startups, Small Businesses, and Distributed Teams

Written by Natasha Goncharova on . Posted in Blog, Document Management, HR

You’ve got a team together, you’ve got an idea, and maybe you’ve even got funding or paying customers and you’re at a point where you really need to manage your team members’ HR matters. You find yourself facing the fact that, regardless of if your staff are employees or contractors, there are forms to be filled out and regularly updated, taxes to be paid, and benefits to be provided and managed.

These are the options currently available for HR management for startups, small businesses, and distributed teams:

PEO (Professional Employer Organizations): In this case, HR is completely outsourced such that there are no part- or full-time employees working directly for the company.

PEOs are third-party providers, often certified by ESAC (Employee Service Assurance Corporation), that serve your business HR needs from soup to nuts for approximately $120-150/employee/mo (~$1800/employee/year).  The assumption is that for up to 30 people, you get savings from hiring a PEO vs an HR Manager.  This fee covers managing all HR functions inclusive of benefit plans, FSA, and healthcare. PEOs provide a branded HR portal to employees to update their info as well as taking care of compliance requirements, issuing FSA (flexible spending account) cards for pre-tax medical expenses, and choosing the best health insurance plans for employees. You, as an employer do not have to.

SaaS (Software as a Service) HR Offerings: SaaS in the HR field are online software services that allow you to manage HR from a central portal. This includes a combination of some or all of the following: employee records, document/resource sharing among employees, job postings, benefit tracking, time management (can include clocking and leave tracking), and company/employee reports. In this case, you would hire a part-time HR administrator or include this in the duties of another person at the company to adminsiter the HR records via the SaaS option and ensure that all necessary forms are completed and updated regularly.

Offline HR: In this case, there is a part- or full-time employee of the company that is responsible for managing all HR functions.  Offline HR management is viable mostly for a team that works in the same office. For distributed teams it becomes increasingly difficult to manage especially for various employment forms and information updates that employees need to provide.

Image credit: thehrpractice.net

This is the first in a series of posts about HR management. Subsequent posts will discuss specifics of the options listed. To be informed about new posts, subscribe to our RSS feed or sign up by email on the right.

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