Why Payroll Should Not Be Run In QuickBooks
That title comes off a little bossy, right? Well, that is how passionate I am about this topic. CAN QuickBooks (QB) handle your payroll? Sure… Can it handle it well and provide good reporting? Absolutely not. This will be controversial, but have you ever met me? Yeah, I’m not one for following the crowd. So, this may ruffle some feathers. If you are one of the many companies that run big payrolls in QB and you feel it works well, my thought is that you don’t know any better. There is far better out there that may surprise you.
QuickBooks Payroll is Designed for Small Business Payroll
It’s true. QuickBooks Online (QBO) should be used for even smaller payroll, maybe 20 employees or less. Intuit, the creator of QB and QBO, included payroll with its systems but it is honestly a very light platform to handle the most basic payrolls. While it can produce large but simple payroll, it is not designed for this and thus doesn’t have many of the features that bigger platforms offer. These missing features offer home care & hospice agencies much better reporting systems and may even include tax credit services which would result in tax credits that would more than pay for the full suite of services – meaning that many home care providers may be missing out on payroll tax credits that smaller platforms don’t offer and the amount of credits generated would be far greater than the cost to use these payroll services – specifically I’m thinking of the Work Opportunity Tax Credit (WOTC) and now during the COVID pandemic the Employee Retention Credit (ERC).
Hiring and Staff Retention
Beyond these tax credit services the more robust payroll systems can greatly improve your efficiencies in your back office by automating some HR processes. Most providers now offer electronic self-onboarding tools for staff where you only enter a few key pieces of information for a new hire and the employee enters the rest, signs documents electronically and uploads all required employment documentation. With the turnover rates experienced in home care, this is a huge timesaver, not to mention tree saver! Some payroll systems can help with talent tracking, employee terminations and benefits administration also.
Lack of Reporting with QuickBooks Payroll
Reporting is something that all providers need, regardless of size or complexity. Even if you don’t have cost reporting requirements, you still need good reporting so that you can properly state your financial statements. In another post I discuss the best practices for how your financial reporting should flow to give you the most beneficial information and make it easy for you to calculate your specific Key Performance Indicators (KPIs). To facilitate this type of reporting you must be able to retrieve good reporting on your payroll and this needs to be automated and not something you have to do manually. This is the real reason that I find QB to be not ideal for home care and hospice agency payroll. For most, the need for payroll to provide good reporting is fundamental. The other benefits listed above are a huge bonus. In addition, with the ongoing pandemic, many are looking for ways to make their operations more virtual, electronic onboarding and more electronic, cloud-based payroll platforms can greatly lead to more virtualized operations.
It May Be Time to Move on From QuickBooks Payroll
If you are currently using QB for payroll and you have more than 20 employees, I highly encourage you to take a hard look at your payroll processes and explore where you might be able to find ways to improve that function by utilizing a cloud-based payroll platform that can offer you many more tools and benefits. You might be surprised in what you’ve been missing out on!
About Knight Home Care Financial
Knight Home Care Financial is a Texas-based accounting firm that provides innovative accounting solutions for providers in assisted living, home health, hospice care, and nursing facilities. By focusing solely on post-acute and long-term health providers, the firm is able to offer tailored services that meet and simplify the business and regulatory demands of the industry. For more information, visit www.knighthcfinancial.com.
