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What Is a POS System & How Does It Work?

Person using a POS system

Keeping accurate real-time sales records, managing inventory, and tracking customer information can be difficult when you’re processing transactions manually. Fortunately, you can use a POS system to streamline these tasks and gather important sales data.

What is a POS system, and why do most small businesses have one in place? A point of sale system includes hardware and software that business owners and staff use to process transactions and payments at checkout. After a customer selects a product in a store or receives a service, they need to pay for it, and this is where a POS system comes in.

How Does a POS System Work?

A POS system records product details of the purchased item, tracks its details, and provides order feedback. This feedback is typically in the form of the total cost of the order to the customer and sales reports to the store owner.

To serve both customer and owner, a system includes software and different types of hardware to get the job done. These include barcode scanners, cash drawers, and computer monitors.

POS Hardware

For a POS system to work, you’ll need the right software and pieces of hardware at the checkout counter. The point of sale hardware market in the U.S. is projected to be worth $9.54 billion by 2025, indicating an increase in use at retail locations. Common hardware that small businesses use to set up a POS include:

POS Terminal

The primary hardware of a sales POS system is the terminal. The terminal is the device where you install the POS software. It can be a desktop computer, a tablet, or a smartphone. You’ll have to connect all other pieces of hardware to the terminal to complete your POS setup.

Monitor/Display

The monitor shows transaction details when you use the various POS hardware. In most retail stores, the display used is a desktop computer. Many small businesses also use smartphones or tablets.

Barcode Scanner

Retail staff use a barcode scanner to capture details about the product on sale. It reveals the price, special discounts, and tax charges on the product.

Card Reader

Modern POS systems include a card reader that allows customers to make payments using credit or debit cards. Credit card reader providers typically charge a monthly maintenance charge and may also charge per-transaction fees.

To use a card reader as part of your retail POS, you’ll need to connect it with your POS software. When you swipe a card through the reader, the POS terminal transmits the card data for approval. If the customer’s bank approves the transaction, you’ll receive authorization to complete the sale.

Receipt Printer

A receipt printer prints out sale receipts after the transaction is done. A receipt is given to customers as a record of the sale, and it also helps businesses keep track of product performance and inventory levels. Receipts also record details such as sales tax, method of payment, and the time and date of the sale. For some business owners, digital receipts will suffice, so a printer may be unnecessary.

Cash Register

A POS system calculates and registers cash transactions using a cash register. Cash registers are often attached to a cash drawer beneath, used for storing cash from payments. Cash registers aid in inventory management and financial reporting when paired with barcode scanners, card terminals, and receipt printers.

Types of POS Systems

There are several types of retail POS systems, each suitable for various businesses. It’s advisable to familiarize yourself with all types to identify the one that’s right for your small business.

Here are the main types of POS systems:

Server POS System

A server retail POS system is one where the data gathered is stored on-premise at the business. This type typically comes with the highest setup costs and monthly maintenance fees. When you have a traditional server system, you’ll need to be on location to utilize it. To create a server POS system, you’ll need to buy hardware from various providers.

Cloud-Based POS System

With cloud-based systems, sales data is stored on the internet instead of an on-location server. Once you’ve installed your chosen POS software into your hardware, you’ll have access to your data as long as you have an internet connection.

Cloud-based POS software works with physical and online stores, unlike the server system that only serves a physical retail store. With e-commerce sales growing each year, introducing cloud-based POS systems into your business can boost growth significantly.

A good example here is the Clover POS system is a popular cloud-based system that allows businesses to complete transactions online.

Hybrid POS System

A hybrid system incorporates features from both on-premise and cloud-based systems. It’s an ideal option if you’d like to have the best of both sides. Hybrid point of sale systems are good for businesses with both physical and online stores. The Lightspeed POS system is an example of a hybrid system that utilizes both on-location and online features.

Mobile POS System

Mobile POS systems use a device such as an Android tablet or iPad as the point of sale. This system typically involves only two pieces of hardware: a smartphone or tablet and a credit card reader.

You can bring POS mobile devices to your pop-up shops, trade shows, and other events outside your physical store. A mobile sale POS system also comes in handy at physical stores to reduce customer queues and speed up checkout. An example is the Square POS system, which you can use on your mobile device without requiring additional hardware.

Features of a POS System

Most POS systems offer the same basic features, while others, such as restaurant POS systems, include additional specialized tools. The following are the features you’ll find in most POS systems for retail businesses:

  • Checkout
  • Payment processing
  • Inventory management
  • Reporting and analytics
  • Employee management
  • Customer relationship management
  • Multichannel sales

Checkout

Checkout tools are the primary basis of a POS system; hence, this is a feature you’ll find on all point of sale systems. With checkout features, you can easily ring up customer purchases to find out their worth.

Payment Processing

Payment processing is another basic feature found on all POS systems. A POS system allows various payment methods, from credit and debit cards to cash.

To use these, you’ll need additional hardware such as a card reader or cash register to process sales. For online ordering, you’ll need POS software that enables digital payments.

Inventory Management

When you ring up a sale, POS software brings up so much more than price information. It also shows crucial information about inventory levels. You can easily tell when a product needs restocking with the inventory management feature.

Reporting and Analytics

Retail point of sale software draws various insights from daily sales data. You can identify products that sell the best, those that take long to clear, and identify intervals with the most sales using POS data. With this data, you can plan everything from restocking to marketing campaigns.

Employee Management

Most POS systems come with an employee management feature to aid staff scheduling and tracking. With this feature, you can track what each staff member is doing at any moment, how many hours they worked, and set permissions for each of them. This feature also helps prevent losses due to staff fraud, such as after-sale transaction modification.

Customer Relationship Management

A customer relationship management (CRM) tool gathers important data about items bought, the amount spent, customer contact information, payment methods, and returns. It gives you important insight on what products a certain customer is interested in, their spending limits, and how often they shop.

With this information, you can create more targeted marketing campaigns that target each customer’s tastes. With the collected data, you can also enroll them in loyalty programs and easily provide solutions in case of return or exchange requests.

You can get more from your POS customer relationship management tool by integrating it with your VoIP caller phone system. This gives staff direct access to customer data when they have queries or complaints. You’ll need the best VoIP app for your business to benefit from this integration.

Multichannel Sales

Does your retail business have multiple locations serving as points of sale? Perhaps you have an online store and also sell in brick-and-mortar stores and mobile locations. A point of sale with a centralized multichannel sales feature consolidates all of your sales data from each POS into one place, making it easy to keep track and gather insights.

How To Choose a POS System for Your Small Business

What type of POS system is convenient for you, and which features does your business need? Asking these questions will help you find the best POS system for your business. Here are factors to keep in mind when choosing a POS system for your small business:

Hardware

Each type of POS system has hardware requirements you must meet to get it working. With an on-premise system, you’ll have to purchase or rent multiple pieces of hardware, including a display, barcode scanner, receipt printer, and card reader. If you want to go with a cloud-based system, you may only need a mobile device and a card reader.

Ease of Use

A good POS system should be easy to use, both for you and for your customers who are checking out by themselves online. An easy-to-use system streamlines checkout activities and saves time for everyone involved.

Features

Besides checkout and payment processing, what other features would you like to have on your point of sale system? Some of the vital features to look out for include inventory management, analytics and reporting, and customer relationship management. With these features, you not only speed up checkout but also keep an eye on your inventory and make informed marketing decisions.

Credit card processing software is also a crucial feature for businesses today. This is due to the rising preference for credit card payments among consumers, which the Federal Reserve reported to total $97.04 trillion in 2019.

Scalability

Choosing a point of sale system that will scale with your business is advisable. Otherwise, if your system is unable to keep up with a growing business, you might end up losing customers due to an unsatisfactory shopping experience.

For example, you might not be able to take payments quickly at checkout leading to long queues in your store. It  might also be difficult to keep track of all your customers. This means that loyalty programs might be difficult to implement.

As your business grows, you’ll need more elaborate and specialized features to make the most of your POS data. If your system cannot keep up, it’ll be challenging to get the insights you need to improve or plan your business operations. Opt for a system that scales with your business to avoid hiccups and save you from spending money on new hardware or software each time your needs change.

Reviews

Before purchasing a POS system, check what other business owners say about it. Reviews will give you a good idea of how the system works and performs.

Note that what works for one store won’t necessarily suit you because the type of business determines the ideal software. For instance, if you own a restaurant, you’ll be better off checking reviews for the best restaurant POS systems rather than checking feedback from general retail store owners.

Customer Support

It’s wise to choose a POS system from a provider with good customer support. In case you run into any problems with your system during business hours, you should be able to reach them instantly for assistance. This will prevent delays caused by a problematic system.

Benefits of a POS System

The right POS system can bring several benefits to your business. These include:

  • Time savings
  • Improved customer experience
  • Important insights
  • Increased accuracy
  • Multiple payment methods

Time Savings

A point of sale system saves a lot of time during the checkout process. You can check product details within moments, process payments, and gather important customer information. This takes a much shorter time than if you were checking products manually.

Improved Customer Experience

Thanks to cloud-based POS systems, customers can shop from an online store without requiring assistance from an in-store employee. They can also purchase items on the go without joining long checkout queues.

Important Insights

Using a POS system leaves you with a lot of useful data you can use in marketing, inventory planning, and goal setting. Features such as inventory management allow you to see your best-selling products and the customers buying them.

Over time, you’ll be able to identify periods when you should stock up more or switch more attention to other products based on seasonal trends.

Increased Accuracy

There’s much less room for errors when using POS software to ring up sales than when doing it manually. This accuracy also extends to when you have to collect and merge data from multiple points of sale. With the software doing the heavy lifting, your reports are guaranteed to be accurate and well-organized.

Multiple Payment Methods

Nowadays, it’s important to give your customers a wide array of payment methods to choose from. Gone are the days when most sales were completed with cash transactions. Today, the most common in-store payment method in the U.S. is credit cards, followed by debit cards. Cash comes third in popularity, followed by digital wallets. Go for a POS system that allows you to integrate all popular payment options into your business.

Frequently Asked Questions (FAQs) for What Is a POS System

Here are answers to frequently asked questions about POS systems.

Conclusion: So What Is a POS System?

To find the best POS solutions for your store, always begin with your business needs in mind. Your needs will dictate which POS features are vital for you, after which you can look for POS system providers offering what you need.

Remember to choose a system that will scale with your business for maximum value.

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14 Payroll Laws You Must Know in 2023

Payroll Laws You Must Know

Payroll laws determine how you pay your employees, calculate payroll taxes and file them. Failure to comply with these can result in fines, interest on unpaid wages, employment lawsuits, and in the worst case, you may have to shut down your business. 

Getting yourself familiar with payroll laws might make you feel just a little overwhelmed. Especially because you find yourself surrounded by legal jargon and technicalities in both federal and state laws.

We’ve summarized the most important payroll laws below in plain language. And although this is a good 7-minute read, consider speaking with a tax professional or financial advisor for the most current laws and advice for your business.

Got confused with payroll laws? check out some of the best payroll services for small businesses

 

14 Important Payroll Laws You Don’t Want to Break

Here’s a list of the most important payroll laws every business owner should know:

  1. Minimum wage: Must pay state minimum wage if its higher than federal wage
  2. Overtime pay: Must pay for non-exempt employees
  3. Pay frequency: Must pay employees on time 
  4. Payment methods: Must offer multiple options at times
  5. Payroll Taxes: Must calculate taxes correctly and pay them on time
  6. Tax forms: Must file payroll tax forms on time
  7. Paid family leave: Must send paid family leave benefits to the state
  8. Paid sick time: Must pay for state-mandated paid sick leave
  9. Worker’s compensation insurance: Must buy for most states
  10. Wage garnishments: Must manage court-ordered garnishments 
  11. Recordkeeping requirements: Must keep payroll records for at least 3 years
  12. Paying tipped employees: Must comply with state tip reporting laws
  13. Final paycheck: Must pay a worker’s last paycheck on time
  14. PTO payout: Must pay employees for earned but unused paid time off 

Minimum Wage

The Fair Labor Standards Act (FLSA) states that you must pay your employees a minimum of $7.25 per hour. However, this might not always be the minimum wage you need to pay your employees. 

Some states have higher minimum wage requirements. For instance, if you’re in California, you must pay your employees at least $15 per hour. We recommend you check your state’s minimum wage law and compare them with federal requirements. You are required to pay whichever wage rate is higher. 

Overtime Pay

Some employees are exempt from overtime pay, while some are not. You must pay non-exempt employees overtime if they work more than 40 hours a week. According to federal law, employees must be paid one and half times their regular rate for hours worked overtime. 

Some states have additional overtime pay laws. For instance, in some states, you may have to pay overtime if an employee works more than 8, 10, or 12 hours daily. You may have to repay the wages along with late fees and penalties if you fail to comply with overtime laws. Not just that, you will have to eventually pay additional taxes on late wages too.

Pay Frequency

There are typically four different payroll schedules businesses choose to use. You may choose to run payroll weekly, biweekly, or monthly. However, each state has a minimum pay frequency law to determine what is the longest period you can have between paydays: a week, two weeks, or a month.

Payment Methods

Usually, you’re free to choose which payment method you use to pay your employees. However, it’s better to check your state law on which payment methods are allowed. For instance, state laws may not let you pay with pay cards or direct deposits if:

  • You don’t have the employee’s permission
  • You don’t offer additional payment options like paper checks or cash
  • You don’t cover payment fees
  • You don’t notify employees of the fees

It’s always a good idea to check the payment options you can use before you run payroll to avoid unnecessary trouble.

Payroll Taxes

When running payroll, you must calculate payroll taxes correctly and withhold that money from paychecks. You are also required to pay those taxes on time to stay clear of tax problems. 

You have to consider both federal and state tax rates when calculating taxes, and this can at times be tough. This is why we recommend you use payroll software. Payroll software automatically calculates taxes according to your state and pays them in time.

Tax Forms

We’re not done with taxes yet. After correctly calculating and paying taxes, you also need to file them on time. You must report this information to the IRS and relevant tax authorities. This includes submitting the quarterly and year-end tax forms like the W-2 and 1099-NEC. 

Quality payroll software like Square Payroll can handle tax filing for you on its own. This means you won’t have to face any failure to file penalties. 

Paid Family Leave

Some states mandate businesses to give their employees PFL (paid family leave). However, employers don’t have to pay this money on their own. According to the PFL law, employers must withhold funds from employee wages and remit them to the state. The state then sends paid family leave money to workers that qualify. 

Paid Sick Time 

Not all states mandate employers to provide paid sick time. But this is a popular law and will soon expand to most states. Paid sick time laws ascertain the number of paid hours an employee can use when sick. These laws also determine how employees can use sick time, the maximum number of hours one gets per year, and whether unused paid sick time carries to the next year. 

Workers’ Compensation Insurance

Businesses are rarely exempted from this law. Texas is the only state that doesn’t require employers to purchase workers’ compensation insurance. 

All other states require you to purchase workers’ compensation to make sure there’s coverage for potential unexpected expenses like on-the-job accidents and employee injuries. So, if you’re starting a business out of Texas, you don’t want to ignore workers’ comp insurance. 

Wage Garnishments

Sometimes you may receive a legal notice to withhold funds from an employee’s paycheck. This usually happens when an employee has unpaid debt or is behind on child support and authorities take their funds directly from their employer to cover it. This is not to be taken lightly. You may have to pay that money out of pocket if you fail to act on court orders. 

Recordkeeping Requirements

Employers must keep payroll records on file for at least three years. Many employers make the mistake of discarding payroll information sooner than that and may incur penalties if asked to provide records from the past. 

The best practice is to keep all relevant information such as paycheck stubs, tax forms, and timesheets for at least four years. An online payroll service like Square Payroll or Gusto can help you in this regard. It records all the relevant information and keeps it safe in an online database so you don’t have to worry about recordkeeping. 

Paying Tipped Employees

If you operate a restaurant or any other business where employees frequently receive tips, you should be aware of tip reporting laws. The federal tipped minimum wage is $2.13 per hour. You may be subject to a higher tipped minimum wage by your state, and in that case, you’ll have to go by the state law. Also, we recommend restaurant owners use restaurant payroll software to help them run payroll with ease. 

Final Paycheck 

This law governs when you pay an employee’s dues if any when you terminate their contract or they quit on their own. States like California require employers to pay all dues to the employee at the time of termination. Other states like Washington and New York give employers until the next payday to clear final paychecks.

PTO Payout 

Paid time off (PTO) laws vary from state to state. Some states may not have a PTO policy while some do. According to this law, if you offer paid time off, you have to pay employees for earned but unused paid time off at the end of the financial year or when terminating an employee’s contract (depending on state, of course).

How to Avoid Payroll Lawsuits?

If you’ve just started your business and are still learning what payroll is and how to run it, you should take extra care to avoid payroll lawsuits. The first step would be to familiarize yourself with the most important laws. If you’ve read the sections above, you’ve already done that. 

Still, you must be really meticulous if you’re running payroll yourself. There are a lot of minute details you need to consider for both federal and state laws, and it becomes difficult at times to stay updated with them. If you want to know how to do payroll the safe way, go with quality payroll software, or hire a tax advisor. 

Investing in payroll software can keep you safe from all kinds of payroll troubles by taking over and automating all aspects of paying your employees. This way, you can rest assure you pay your employees and file taxes correctly and on time. 

A quality payroll software automatically considers all the payroll laws your business is subject to by your state. You will no longer have to worry about payroll and spend long hours filing taxes. With payroll automated, you can concentrate on things that matter the most. 

Best Payroll Software to Avoid Payroll Problems

We’ve shortlisted some of the best payroll software that helps you comply with all payroll laws with ease. 

Gusto logo

Gusto: Best Full-Service Platform

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Gusto is one of the best payroll processing software out there. It lets you expedite all aspects of running payroll from payment processing to filing taxes. Moreover, it also offers other business management features which makes it an all-in-one solution for all your administrative tasks.

Why we chose it: Gusto offers automatic payroll processing, auto tax filing, HR support with information about payroll laws, and many other features making it an excellent choice for payroll law compliance.

  • HR support center with payroll laws information
  • Unlimited payroll runs
  • Auto processing and submitting payroll taxes
  • HR assistance only for Concierge users
  • Customer service is slow
  • Costlier than other options

Pricing

  • Core: $39/month + $6/month per person
  • Complete: $39/month + $12/month per person
  • Concierge: $149/month + $12/month per person
Gusto HR support center laws page
Square payroll logo

Square Payroll: Best for Ease of Use

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Square Payroll is one of the easiest to use payroll processing software. If you work with hourly wage contractors only, this might be the best option for you. Although it works for both salaried employees and contractors, Square charges no base fee for the contractor-only plan. It also offers useful features like automatic payroll, tax filing, and tax form submission.

Why we chose it: Square Payroll is easy to use, sophisticated, and offers all the features you need to comply with payroll laws in your state.

  • Low pricing
  • Easy to use
  • Integrates with other tools
  • Basic HR functionality only
  • Slow customer support
  • Basic payroll reports

Pricing

  • Pay Employees & Contractors: $35 monthly subscription + $5/month/per person paid
  • Pay Contractors only: $5/month/per person paid
Screenshot of Square payroll overview, tax forms
Rippling logo

Rippling: Best for Mid-sized Businesses 

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Rippling offers a great combination of HR and payroll functionalities. It is a brilliant option for mid-sized businesses as it lets employers simplify personnel management. It offers a lot of integration options too for syncing with other management services.

Why we chose it: Rippling is great for mid-sized businesses that are looking for greater insight into their payroll and want to streamline their employee payments.

  • Reasonable price for mid-sized businesses
  • Can pay any employees internationally 
  • Integrates with hundreds of apps
  • Quote-based pricing
  • Can’t completely automate payroll
  • 1-year minimum contract length

Pricing 

Rippling has a quote-based pricing system. Generally, you can expect it to cost $8/month/per person paid.

Screenshot of Rippling payroll report

Frequently Asked Questions (FAQs) for Payroll Laws

Here are some of the most frequently asked questions about payroll laws. Have a quick look at them to resolve any queries you might have. 

Bottom Line on Payroll Laws

A payroll nightmare is something you don’t want your business to face. Make sure you follow federal and state payroll laws to stay in the clear. The easiest and most straightforward way to do that is to use a quality payroll processing software that can automatically process payroll and file taxes on its own. 

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What Are the 4 Types of Payroll Schedules

4 Types of Payroll Schedules for Businesses

One of the first decisions you must make as a business owner is concerning payroll schedule. A payroll schedule determines how often you pay your employees. There are four types of payroll schedules to choose from, and we’ll go through them in this article, looking at their pros and cons and determining which suits what business.

Maintaining a payroll schedule seamlessly is possible with the right payroll app, like Gusto. With Gusto, you can keep track of employee hours, accurately calculate payments, deductions, and file taxes automatically for hassle-free paydays.

What is a Payroll Schedule?

A payroll schedule refers to the frequency with which you pay your employees. There are several types of payroll schedules, each suitable for different businesses.

To choose the right schedule for your company, it’s crucial to understand how each schedule works. You also must pay attention to other factors, such as state laws, that determine which schedule is suitable for your business.

What’s a Pay Period?

A pay period is a duration between one pay date to the next. If you pay your employees weekly, the week serves as the pay period. If you pay workers twice monthly, you’ll have two pay periods each month and 24 pay periods every year. The type of payroll schedule you choose determines your pay periods.

The 4 Types of Payroll Schedules

4 types of payroll schedule

The most common types of payroll schedules include:

  • Weekly
  • Bi-weekly
  • Bi-monthly/Semi-monthly
  • Monthly

Here’s a look at each of them:

Weekly

In a weekly payroll schedule, employees are paid every week. This translates to 52 pay periods every year. A weekly payroll schedule is suitable for businesses with independent contractors or freelance workers paid hourly. It’s also a great option for paying workers who work overtime.

Pros

  • It’s great for employees: Most employees like getting paid as soon as possible, and a weekly payroll schedule is highly preferred. This is especially true with non-permanent workers with irregular work schedules.
  • Perfect for overtime payments: Paying for overtime hours is easier on a weekly schedule than other lengthy schedules. Overtime payments will be irregular every other week based on how many hours employees put in. Allowing them to remain uncalculated or unpaid for longer periods can lead to more tasking budgeting down the line.

Cons

  • Too much work for employers: With a weekly payroll schedule, you have to run payroll every week, 52 times every year. This requires a lot of time commitment from your payroll team, especially if you have a large workforce.
  • It’s costly: If you’re using a payroll service provider who charges a fee for every time you run payroll, the process will cost you considerably throughout the year.
Pros and cons of weekly payroll schedule

Bi-weekly

You’ll pay your employees every other week with a bi-weekly payroll schedule. This results in 26 payroll periods each year, half as much as you get with a weekly schedule.

Pros

  •  Less time-consuming for employers: When you pay your employees once every two weeks, you’ll spend half as much time processing payroll as with a weekly schedule. This also results in fewer costs spent on outsourced payroll services and providers.
  • Suitable for hour-based payments: The sooner you can calculate and pay hourly-based payments, the better it is for your budgeting.

Cons

  • Makes monthly deductions tricky: Bi-weekly payments do not smoothly transition into monthly schedules. Unlike a weekly schedule, you’ll have to pay more attention when determining when to include deductions such as health insurance payments.
Pros and cons of biweekly payroll schedule

Bi-monthly

Bi-monthly payroll schedules have 24 pay periods every year. This means that in every month of the year, you’ll make two payments. Many businesses make payments on either the 1st and 15th or the 15th and 30th.

A bi-monthly payroll schedule is more employer-friendly than a bi-weekly one because it makes monthly budgeting and reporting much easier. For employees, there’s the certainty of receiving payments consistently on the same dates every month.

Pros

  • Consistent pay dates: Employees receive payments on consistent dates when payroll is on a semi-monthly basis. This increases employee satisfaction since it simplifies personal financing.
  • Lower time and cost requirements: Time and money spent running bi-monthly payroll are less than with weekly and bi-weekly schedules. This makes it more convenient for employers.

Cons

  • Payday irregularities: Since bi-monthly payroll schedules feature fixed pay dates, paydays occasionally fall on weekends or holidays. This creates a delay in how fast employees can access their payments.
Pros and cons of bimonthly payroll schedule

Monthly

The monthly payroll schedule comprises 12 pay periods throughout the year. Compared to other schedules, this is the most convenient for employers. Often used for salaried workers, a monthly payroll schedule uses up the least resources regarding time, money, and paycheck processing.

Pros

  •  Low processing costs: Since there are only 12 pay periods each year with a monthly payroll schedule, it incurs minimum expenses compared to all other types of schedules.
  • Convenient paycheck processing: Making deductions is easiest when paying employees monthly. This makes paycheck processing much more convenient than with weekly or bi-weekly schedules.

Cons

  • Not suitable for hourly employees: Many hourly workers may not be willing to wait an entire month to receive their pay, and many states require employers to pay such workers more frequently.
Pros and cons of monthly payroll schedule

Tip

If you want to save money on payroll, consider using the best free payroll software. It’s easier than doing it by yourself, and more affordable than hiring a payroll service to do it for you. 

How to Choose a Payroll Schedule for Your Company

To choose the right payroll schedule for your company, you must first consider several factors. These include the following:

State Laws

Different states have different payday requirements governing payroll schedules. Regulations differ between industries and occupations, so it’s important to check specific laws affecting your business.

For instance, in Arizona, employers must have two or more paydays in a month, and they should not be more than 16 days apart. In New York, manual workers should be paid weekly, while a semi-monthly payroll schedule is required for clerical and other workers.

The only exceptions are South Carolina, Florida, and Alabama. These three states don’t have specified payroll frequencies, so how often you pay your workers is up to you.

Types of Employees

Are your workers salaried, hourly, or on contract? A monthly or semi-monthly schedule is suitable for salaried employees, but more frequent payments are better for hourly workers.

This is not just because of simplified paycheck processing but also because of employee satisfaction. A shorter pay period may be more favorable for hourly workers who earn irregular incomes over different durations.

Read: How to Process Contractor Payroll in 6 Steps

Cash Flow

Having an established payment schedule on paper will not serve much purpose if you cannot pay employees on time. Employees prefer working for businesses that can pay them on time, so ensure to settle on a schedule that your cash flow can support.

Frequently Asked Questions (FAQs) for Payroll Schedule

Here are answers to frequently asked questions regarding payroll schedules:

Bottom Line on Payroll Schedules

Paying employees consistently without delay ensures smooth business operation and maintains the business’s reputation. Fortunately, you have several payroll schedules to pick from, making it easier to choose a reliable frequency. Be sure to keep crucial factors such as your company’s financial capabilities and state regulations in mind. 

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What Is a VoIP Caller & How Does VoIP Work?

A VoIP caller using a voip system to communicate with client

One of the best ways for businesses to connect with customers is through the phone. With phone communication, sales teams reach out to prospects, customers call help centers, and internal teams collaborate.

However, costs quickly add up when businesses are handling hundreds and thousands of calls daily. This makes it necessary to find a solution that is cheaper and more convenient.

We will look at what a VoIP caller is, how to set it up, and why your business should use a VoIP system.

Looking for a premium service? check out Vonage!

 

If you’re looking for an affordable VoIP that also happens to be one of the best solutions on the market today, look no further than RingCentral. It offers a complete phone system for your business with apps, AI, and automation on a single platform. You can get all of this, including the reliability and unique phone number, for less than $19.99 per month. If you act fast you can take advantage of the current 7-day free trial offer that is happening.

Sign up with RingCentral now.

What Is a VoIP Caller?

VoIP stands for Voice over Internet Protocol, which is a technology that allows you to make calls over the internet instead of a regular phone line. The cloud software will connect you to any phone around the world, by converting your voice into a digital signal that is transferred over the internet and then converted into a regular phone signal.

What is a VoIP caller illustration

As a VoIP caller, you enter a phone number (or VoIP number) and dial it through the internet. The receiver’s phone will ring as if coming from another phone, except that it may display “VoIP caller” as the caller ID.

VoIP technology offers services like caller identification and screening, easy digital file sharing, email notifications, call conferencing, and even reports. Examples of VoIP phone services include Nextiva, RingCentral, Facebook Messenger, and Skype.

However, VoIP caller has two meanings. The VoIP system itself and the person calling you using a VoIP system. 

Therefore, a VoIP caller is someone calling you from a VoIP system. A VoIP caller is anybody who uses a digital signal to transmit their call through an internet connection, rather than analog phone lines. 

With the global VoIP services market expected to reach $102.5 billion by 2026, more and more businesses are making the shift to cloud-calling technologies. 

Do Businesses Need To Use a VoIP Service?

Businesses benefit from using a Voice over Internet Protocol service for many reasons, such as:

  • Better remote team collaboration
  • Large scale sales campaigns
  • Reduced spending
  • Increased scalability
  • Increased brand awareness
  • Easy digital file sharing

Leads to Better Remote Team Collaboration

For a business with many remote employees, VoIP systems make it easy and cost-efficient to keep in touch with your team and organize conferences. VoIP technology costs less than a regular telephone service. Businesses with multiple locations often set up VoIP phone systems to operate only within their offices using the business phones and computers.

Enables Large Scale Sales Campaigns

Many businesses use outbound calls to acquire and nurture leads, through cold calling and follow-ups. A VoIP system reduces the cost of constantly reaching out to people over the phone and makes it possible to contact anyone anywhere in the world.

Reduces Spending

VoIP services cost less than a traditional phone service, and they don’t require a lot of costly hardware. Companies can use existing computers and phones and simply download the required software. Moreover, there are free basic VoIP services available as well.

Increases Scalability

Businesses can easily add more lines using the same VoIP number, rather than calling in professionals to install a traditional phone line when they want to expand. 

Increases Brand Awareness

VoIP services allow businesses to include custom tags and caller IDs. These IDs can be kept the same no matter which employee is calling a customer. A consistent caller ID increases brand awareness and recognition.

Allows for Easy Digital File Sharing

A VoIP phone system allows users to share digital files during a call. These include documents, images, audio files, and videos. File transmission will depend on the receiver’s device.

Sign up with RingCentral now.

How Does a VoIP Caller Work?

A VoIP caller transmits your audio signal over a broadband internet connection.

VoIP technology converts your voice into data packets that are moved through internet fibers until they get to the area of the receiver. If you’re calling another VoIP phone line, the data packet is converted to audio and connected directly with the receiver. If you’re calling traditional phones, the data packets are converted to regular phone signals before reaching the user.

A VoIP phone system uses the TCP/IP and Intelligent Endpoint protocols. TCP breaks your audio down into data packets while IP transmits it over the internet’s fiber optic cables. The Intelligent Endpoint protocols locate and send signals to the receiver.

How to Set Up & Use a VoIP Caller

Step-by-step guide on how to set up a voip caller system

You need very little equipment when setting up a VoIP phone. Make sure you have access to the internet, an adapter, a software provider, and a phone or computer.

An internet broadband connection is what transmits your signal. The adapter converts your audio to data packets. An adapter is connected to a regular phone or built into a special VoIP phone.

Not every VoIP caller requires an adapter. With a smartphone or computer, you can simply install the VoIP software. Depending on the device you use, you may need to buy a microphone and speaker. If you want to use your existing phones, you may need to install special adaptors. 

When you select a VoIP provider such as Nextiva, simply sign up for an account and log into your dashboard. Decide your business hours and build your call flows, then install the desktop software. If you want a VoIP adapter or a softphone, reach out to Nextiva’s sales team.

How to Get a VoIP Number

You will need to sign up with a provider to get a VoIP phone number. VoIP providers have various methods of obtaining a VoIP number, but it’s usually simple depending on your requirements. 

Nextiva, for example, gives you a number when you sign up for an account. A VoIP number can be a new number or an existing phone number that you connect to the VoIP through number porting.

Depending on the residential VoIP services of the VoIP caller, you get a fixed or a non-fixed VoIP number.

A fixed VoIP number is tied to your address. This does not limit features. Instead, you have benefits like being able to contact emergency services like 911. However, you pay taxes that come with using that area code.

With non-fixed VoIP telephone numbers, you can choose any area code to use no matter your location. Unlike a fixed number, there is limited access to government and emergency services. 

VoIP phone numbers can be connected to different devices. For example, the same VoIP number is attached to a number of computers in a help center. This increases the rate and speed of pickup, because if someone calls, several phones ring at the same time, and the nearest agent picks up. It is also possible to speak with multiple users at the same time.

Get a VoIP Number with RingCentral today.

How Do I Identify a VoIP Caller?

To access VoIP services, a user is assigned a VoIP number. You can identify a VoIP caller by enabling caller ID information or looking up the VoIP number. Enabling caller ID software like Truecaller will automatically look up and display the ID. 

Other ways to find out who is calling you with a VoIP phone is to track the number during the call, ask your service provider to provide you with details, or use a reverse phone lookup service.

It is possible to trace a VoIP call after it has ended if you have installed a pocket analyzer. This software saves traffic details during a VoIP call. Look through those details to find the IP address. 

Businesses using Nextiva and other providers can customize their VoIP caller ID so that instead of “VoIP Caller”, you will see the brand name. Some callers use VPNs and Proxy servers to prevent IP address lookup. If a caller is doing that, it is probably better to block them. 

How to Block VoIP Calls

The easiest way to block a VoIP caller ID is to use your device blocking features. The method varies by device. Sometimes, it is as simple as selecting the number and clicking “Block number.” Other times, you may need to contact your traditional phone system provider and ask that a number be blocked.

You can use caller ID software, sign up for the Do Not Call registry, or reach out to the number and ask not to be contacted again.

VoIP Security Risks

While VoIP is certainly the future of business communication, there are some risks to be aware of. As with most things on the web, VoIP can also be abused by scammers and criminals to damage your business.

By breaching your phone system, hackers can listen to your phone calls, amass phone bills, or steal sensitive information related to your business, yourself, and your customers.

Since VoiP calls are made over the internet, these call systems are prone to many of the risks we see in the digital world.

So what are the most common VoIP Security risks?

Phishing

Phishing is a malicious activity when scammers call using numbers that appear similar to legitimate organizations. These organizations include banks, tax departments, and government agencies. The scammer leaves a message about “suspicious activity” on the recipient’s account and asks the recipient to “verify their identity”. 

As such, the victim may share sensitive information such as their bank account details or credit card information. In fact, over 59 million Americans lost money from a phone scam in 2021. 

Signs of a phishing attack include:

  • Extreme urgency from the person on the other line
  • Unexpected calls from known numbers or reputable organizations
  • Short and unusual phone numbers on caller ID display
  • The other person keeps requesting you to verify sensitive information

To prevent phishing, your organization should verify all phone requests, even if they seem to come from your IT department. You also need to train your employees to refuse to disclose sensitive information unless cleared by a supervisor. 

DDoS Attacks

DDoS (distributed denial of service) attacks occur when criminals overwhelm a server with data and use up all of its bandwidth. In turn, your network or machine will be unavailable to its users after the DDoS attack disrupts the service.

If you use a VoIP caller and are tagged with a DDoS attack, you can’t make or receive any phone calls. DDoS attacks are on the rise and your business could be at risk. To mitigate DDoS attacks, we recommend using a separate, dedicated internet connection for your VoIP caller. 

Virtual Local Area Networks, VLANs, are specifically dedicated for VoIP traffic and prevent DDoS attacks. For VoIP callers sharing across a wide area network (WAN), you can protect your organization from DDoS attack with managed encryption. 

Eavesdropping

Eavesdropping is how most criminals steal sensitive information by obtaining passwords, names, and phone numbers. This allows them to take control of voicemail, calling plan, call forwarding, and billing information.

Voice Over Misconfigured Internet Telephone, or VOMIT, is a VoIP hacking technique that takes data and voice packets from calls directly. VOMIT is a form of eavesdropping and converts phone calls into files straight from your business phone system.

To protect your small business from VOMIT attacks and eavesdropping, use a cloud-based VoIP system with the latest call encryption techniques. Reputable VoIP callers come with end-to-end encryption and protect eavesdroppers from listening in on your important phone calls.  

Pros & Cons of a VoIP Service for Businesses

In a nutshell, here are the advantages and disadvantages of using a VoIP service in your business.

VoIP Caller Pros

  • Can reach more people
  • VoIP calls cost less than traditional phone calls
  • More features like call forwarding and voicemail to email conversion
  • Portable
  • The same VoIP number can be connected to multiple phones
  • You can speak to multiple people at the same time
  • Easy to setup and use
  • Helps team collaboration
  • Can integrate with other apps like Slack and Zapier

VoIP Caller Cons

  • May be labeled as spam
  • Not everyone wants to receive VoIP calls

Frequently Asked Questions (FAQs) for VoIP Caller

Conclusion: What Is a VoIP Caller?

A Voice over Internet Protocol phone service affords amazing benefits to both businesses and individuals. Using an internet connection, VoIP calls help businesses and freelancers connect with more prospects, manage sales campaigns, and manage team productivity. To individuals, it gives the ability to reach anyone in the world while traveling, using the same number. 

Get your VoIP system set up with RingCentral.

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What Are Applicant Tracking Systems and How Do They Work?

Businessman studying a resume on his laptop

To screen a job applicant, an HR manager has to look carefully through a resume to confirm whether the experiences and skills listed meet the job requirements. When businesses receive hundreds of resumes, dozens of hours can be wasted going through them.

To fight this problem, many businesses are now using applicant tracking systems to automate hiring and significantly reduce cost-per-hire.

This article will detail what an applicant tracking system is, how it works, and how to get your resume past one as a job applicant.

What Are Applicant Tracking Systems?

An applicant tracking system streamlines the hiring process for a vacancy. This software screens job applications and ranks candidates based on experience and skill.

ATS software eases recruiting efforts for companies, especially for those with multiple vacancies that receive thousands of applications. From job postings to ranking applicants and scheduling interviews, applicant tracking systems are used at every hiring stage to minimize time spent on each resume.

These days, when someone submits an application online, there’s a high chance that it’s going to pass through an ATS before getting to a hiring manager. Over 90% of businesses use tracking systems to automate hiring.

For businesses, the best applicant tracking systems save money and time, and present only the best candidates to HR managers. For individuals, an ATS is another hurdle to jump before they can get a serious consideration from a company.

Why Do Businesses Use Applicant Tracking Systems?

Businesses implement tracking software in their hiring process for many reasons, including to:

  • Customize and automate the hiring process
  • Filter out spam and duplicate applications
  • Rank candidates in a searchable database
  • Save time and money

To Customize and Automate the Hiring Process

Businesses have custom hiring flows for different openings. For example, the hiring processes for a marketing manager may be different for a software engineer. 

ATS software allows HR teams to create customized recruitment steps for different job openings and automatically track candidates as they move along the recruiting process. For instance, once a software engineer’s resume has been ranked, the HR manager can auto send an email to schedule an interview.

To Filter Out Spam and Duplicate Applications

Many applicants online play the numbers game—send as many applications as possible and hope for one positive response. This means that hiring managers have to deal with lots of irrelevant spam and duplicate applications.

Applicant tracking systems have algorithms that filter out duplicate applications and rank spam applications low.

To Rank Candidates in a Searchable Database

When someone applies online, the ATS automatically creates a candidate profile, parses the applicant’s data, and adds that information to the profile. Hiring personnel can then search the database for resumes containing relevant keywords or for highly ranked applicants.

To Save Time and Money

A tracking software saves hiring managers extra hours of looking through resumes and organizing them. By reducing the amount of time spent on applications, businesses can direct their capital to onboarding the right talents.

How Do Applicant Tracking Systems Work?

The most basic task of an applicant tracking system is to auto-read a resume and score an applicant. When an applicant submits a resume through an ATS like BambooHR, the resume is parsed into plain text, scored, and added to a digital profile.

An ATS software typically searches for keywords indicating that an individual may be qualified for a job. For instance, when hiring for the position of digital marketing manager, the employer is interested in keywords like “marketing strategy,” “digital marketing,” “search engine optimization,” “social media,” etc. An applicant’s resume that doesn’t include relevant keywords is scored low.

Recruiters search for qualified candidates by looking for relevant keywords in the database. When they search for “SEO,” for example, the tracking software pulls up all applicants who included this term in their resumes.

Employers set other parameters for applicant scoring. For instance, an employer may include a yes-no question to filter out inexperienced applicants. They may ask, “Do you have up to 2 years of experience?” or “Are you legally qualified to work in the U.S.?” When an applicant answers “No” to such questions, they’re automatically removed from the hiring process and auto-sent a rejection email.

ATS systems analyze the listed skills of an individual or the work experiences they’ve had. Modern applicant trackers implement artificial intelligence and natural language processing to improve accuracy.

How Accurate Is an Applicant Tracking System?

ATS software focuses on how a candidate’s listed skills and experiences match job descriptions. Over 80% of employers believe ATS inadvertently remove highly-skilled job seekers. This shows that ATSs are not entirely accurate.

Even though tracking software can filter out skilled applicants, employers are still willing to use it instead of manually sorting through resumes. The majority of recruiters find that application tracking systems speed up talent acquisition. Losing a few good talents to gain many others and maximize efficiency seems a fair price to pay.

How To Get Your Resume Past an ATS Software

Many applicants create sleek and visually enticing resumes that are designed to draw in a recruiter. However, hiring managers often never see those resumes unless it meets specific criteria. 

The most important factor in getting past a tracking software is to make sure it can correctly parse your resume. Applicant trackers read from left to right, top to bottom. We recommend that you use the chronological or hybrid resume formats. These list your work experiences in a way that an applicant tracking software can easily read.

Many candidates are discouraged when they see the list of requirements and skills in job descriptions. Nevertheless, make sure to include the major relevant keywords in your resume. At this stage, your resume is for the ATS and not for a human recruiter.

Include keywords wherever you can—in your career description, past job titles, and listed skills. Use both the long-form and acronyms of relevant keywords, and common headings. For instance, use “work experience” not “what I have done,” “skills” not “what I can do,” and “recommendations” or “references” not “who to contact.” Inserting tables or images may cause resume parsing errors.

Submit your resume in the best file format. We recommend using DOCX and PDFs. PDFs have the advantage of preserving formatting but older tracking software cannot properly read PDFs.

5 Best ATS Software for Businesses

Here are five of the top applicant tracking systems for businesses.

Pinpoint logo

Pinpoint

From $600

Visit

Pinpoint is a relatively new ATS software ideal for companies that don’t want to outsource hiring needs to a recruitment agency. Pinpoint is designed to be easy for company personnel to advertise openings, source employees, and fill talent acquisition pipelines.

Pinpoint lets you create custom career sites that enforce employer branding. It automatically creates candidate profiles and ranks applicants based on who matches the job description. A talent acquisition team can also collaborate to hire the right employees.

The app has a Chrome extension that lets you source top hires for talent acquisition. You can send templated emails, schedule video interviews, see employee referrals, and pull custom reports with Pinpoint.

A great advantage is the well-designed UI. The dashboard shows you how many total applications there are for jobs and makes it easy for you to review them. Qualified candidates can apply when there is no vacancy, so you store applicant information for when there is an opening. Pinpoint starts from $600 per month.

  • Fixed monthly fees.
  • Custom reports and recruiting analytics.
  • Unlimited active jobs.
  • Connects with many job boards.
  • No mobile app.
ICIMS Logo

iCIMS

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iCIMS Talent Cloud is a dominant ATS in the industry. For organizations with over a thousand employees and staffing agencies, iCIMS seems the best software for applicant tracking.

iCIMS is a cloud-based applicant tracking system that streamlines recruitment processes from job postings to making an offer. The tracking software integrates smoothly with a company’s career page and popular platforms like Indeed, LinkedIn Jobs, Monster, and Zip Recruiter. It can even integrate with other ATS software like BambooHR.

The ATS system adds a profile page for each applicant and parses every file they attach. Recruiters easily create custom hiring workflows, search for candidates, create a human resource information system, and pull data reports. The software has add-ons that make the recruiting process engaging for candidates and also a feature for social media posting.

iCIMS has a well-laid-out UI, but it can be a little overwhelming for new users. The number of features available may be too much for HR professionals who want to keep it simple. iCIMS has a mobile app that works for both Android and iOS.

  • Allows profiles and custom workflows.
  • Creates customizable recruiting data reports.
  • Has Text Engagement for a better candidate experience.
  • Pricey. 
  • Add-ons cost extra.
BambooHR logo

BambooHR

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BambooHR is not only for applicant tracking but for the entire life cycle of existing employees. From onboarding to offboarding, BambooHR helps you analyze employee engagement and pull talent acquisition reports.

BambooHR integrates with popular job boards like Indeed, Glassdoor, and LinkedIn jobs. It provides you with a database of applicants and ranks them on how they match your job descriptions. Hiring managers can then search this database to select which applicants move on to the next stage in the recruitment process.

The software makes it easy for you to send templated emails to applicants and schedule discovery meetings. Employees can track their time with the PM software and create reports of their own. You can even work payroll taxes with BambooHR. The app manages human resources for both full-time and contract employees.

With BambooHR, you can work as a talent acquisition team and use employee referrals. By granting permissions, you give different team members access to candidates’ job applications, allowing them to advise on the hiring process. BambooHR has a mobile app for both Android and iOS devices. 

  • Cheaper than other systems.
  • Tracks an entire employee lifecycle.
  • Great for talent management.
  • Not many applicant-engaging features.
Monday logo

monday.com

$8

Visit

monday.com is known for project management, but it also offers an applicant tracking system software. It helps you post jobs to popular platforms and your website’s career page.

To track applicants with monday.com, you have to create a dedicated board. There is a board template to customize, and you can even develop your own hiring flows.

Users can create an application form with a shareable link. You can then add the link to your website career page or job boards. Once an applicant fills the form, their details get added to the hiring board. 

From this board, managers have an overview of the applicants who matched the job description and can decide who moves forward in the recruitment process. Since monday.com integrates with Gmail, you can automatically send acceptance or rejection emails to candidates.

Apart from hiring, monday.com is used for team collaboration and employee management. monday.com charges $8 monthly per user, and has no special pricing for applicant tracking.

Read: The Ultimate monday.com Review – Pricing, Features & More

  • Removes the need to buy special tracking software.
  • Easy to view applicants and their documentation.
  • Does not rank candidates.
  • Not optimal for a large number of applications.
JazzHR logo

JazzHR

From $39 to $359

Visit

JazzHR is designed for companies with less than 500 employees. The software offers custom career pages and integrates with several job boards in the market to make talent acquisition easy.

With JazzHR, you can group applicants, rank their skills and experience, and move them along the hiring stages. You can create custom workflows for every job opening and collaborate with a hiring team.

JazzHR integrates with hundreds of apps including Microsoft Outlook and Gsuite for scheduling interviews, Bob and Gusto for doing payroll taxes, and PeopleG2 for running background checks. It also integrates with tracking software like BambooHR.

Publish job openings on several job boards at once with just one click. You can also work with third-party apps to run candidate skills assessments. 

JazzHR has different pricing models from $39 to $359 per month.

  • Affordable for small to medium sized businesses.
  • Has features of enterprise ATS software vendors like iCIMS.
  • No applicant tracking for the lowest pricing tier.

Pros and Cons of Using an Applicant Tracking System in HR

Let’s look at the for and against of using the right ATS system for hiring.

ATS Pros

  • Streamlines the recruitment process
  • Ranks applicants by comparing their resumes to the job description
  • Reduces cost-per-hire and increases recruiter productivity
  • Filters out spam applications
  • Creates candidate profiles
  • Makes resumes searchable
  • Helps in interview scheduling and candidate communications
  • Automates recruitment marketing and job posting

ATS Cons

  • May filter out skilled applicants
  • Cannot parse complexly designed resumes

Frequently Asked Questions (FAQs) for Applicant Tracking Systems

Bottom Line on Applicant Tracking Systems

Applicant tracking systems are here to stay. Hiring teams minimize cost-per-hire when they set up a tracking system for talent acquisition and create customizable job reqs. Applicants craft more relevant resumes when they write with ATS software in mind. Maximize efficiency in your business by implementing an applicant tracking system—and transform the way you handle recruiting.

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What Is a Business Line of Credit & How Does it Work?

A credit card on a bluish tech background

Lack of capital is a leading reason many small businesses fail in their first year or soon after. Fortunately, the right business financing option can help your startup survive cash flow hiccups. A business line of credit is the ideal solution.

What is a business line of credit, and why should you consider it as a financing option? Read on to find out.

What Is a Business Line of Credit?

A business line of credit is a revolving financing option you can draw from whenever you need money for business expenses. However, a line of credit has a fixed limit for the amount of money you can withdraw.

Once you get a line of credit, you can make multiple withdrawals until you reach the limit. There will be a stipulated repayment period which you should honor to avoid higher interest or having your line terminated.

Types of Business Lines of Credit

There are two main types of credit business lines: secured and unsecured credit lines.

Secured Line of Credit

A secured line of credit is where the lender requires collateral to approve your loan request. Collateral can be assets such as property, business inventory, or accounts receivable.

Most lines of credits offering higher amounts of money are usually secured. Many lenders are reluctant to give unsecured loans to newer businesses, so keep this in mind when applying for a line of credit.

Unsecured Line of Credit

An unsecured business line of credit is when you don’t need to give any collateral to qualify for a loan. Instead, your lender will need proof of good personal and business credit rating and financial statements showing annual revenue and profits to help them gauge risk.

Also, they’ll impose higher interest rates on an unsecured line of credit than on a secured one. An unsecured business line will typically offer lower credit limits than secured types.

Requirements for a Business Line of Credit

Before a lender can consider you for a line of credit, they’ll need to access your business to determine your risk.

Many of the requirements for a business line of credit go towards proving your business’s financial health and your ability to make payments. How well you meet the requirements will determine the limit your lender gives you.

Here are some of the things lenders check before approving credit requests.

Financial Statements and Reports

About 50% of startups fail in the first five years of operation. Hence, creditors need financial statements and tax reports to decide whether to give you a line of credit. With these, they can determine whether you’re generating enough revenue to support your line of credit payments.

Operating Time

Most lenders require you to have been in business for at least a year to consider you for a line of credit. Large banks will often only approve you if you’ve been in operation for at least two years.

Being in operation for a more extended period with sound financial health is proof that your business is making good revenue, which presents less risk to the creditor.

When you’ve not been in business for very long, you may have difficulty accessing a line of credit. If a lender does approve you, they’ll probably impose a high-interest rate and require collateral.

Credit Score

Some lenders have a set minimum credit score that small business owners must meet before they can approve requests for a small business line of credit. The higher the amount of credit you want, the higher the minimum credit score you’ll need to meet.

Note that lenders will need to see your business credit score besides your individual one, so open a business bank account to start building your score.

If you have a poor personal or business credit score, you might want to check out the best bad credit business loans available today.

Collateral

To get a secured business line of credit, you’ll need to provide collateral. Collateral could be anything from business assets to real estate equity. Banks are more likely to give you lines of credit if you can provide qualifying collateral.

Personal Guarantee

What happens if you cannot pay back your used credit amount? Your bank may require you to provide a personal guarantee as the business owner. A personal guarantee allows them to hold you individually responsible if you cannot repay the small business loan. In such a case, they may take your personal assets as collateral.

When Should You Get a Business Line of Credit?

Different types of small business loans come in handy when your business fails to generate enough capital. However, it’s best not to wait until you’re in financial trouble to apply for a business line of credit.

The best time to get a credit business line is when your business is doing well.

One reason is that when your company has good financial health, lenders will be willing to lend you higher amounts at lower interests.

Secondly, applying for a line of credit can take time, which is inconvenient when you need immediate funding. Having a line of credit on standby means that you can access it immediately when you need money.

Reasons To Get a Business Line of Credit

As a small business owner, you’ll need funding at different times for various reasons. To keep from getting into debt trouble, it’s crucial to get the right loan for the correct purpose. A business line of credit could be your best option to:

  • Get working capital.
  • Buy new equipment.
  • Acquire extra inventory for a busy season.
  • Hire new staff.
  • Take advantage of time-limited opportunities.

To Get Working Capital

Many startups lack working capital for daily business expenses for reasons such as delayed payments by clients or seasonal cash flow gaps. Both are temporary setbacks that you should not allow to run your business into the ground.

A business credit loan can provide you with the working capital you need while waiting for clients to fulfill your accounts receivables or for sales to pick up again. Since both scenarios may be repetitive over the years, a line of credit with a fixed amount you can draw from regularly is more suitable than a term loan that only gives you a lump sum amount once. You can also read here the best banks for startups to get more information.

New Equipment Purchase

As your business grows, you may need to buy new equipment to expand operations and meet rising demand. Having a line of credit available to you allows you to draw funds to buy the new equipment immediately.

Acquiring Extra Inventory for a Busier Season

Various industries have business seasons with higher demand than the rest of the year. You’ll need extra inventory to take maximum advantage of the increased activity when this time comes.

Since this increases your expenses, it might be challenging to pay for the new inventory with your usual cash flow. Drawing from a line of credit comes in handy at such a time.

Also, due to the guaranteed higher returns from a busier season, you’re more assured of making enough profits to pay back your drawn amount in the provided repayment period.

Hiring New Staff

Sometimes, hiring new staff is necessary to keep up with a growing business. Before your revenue can support the added payroll expense, a business line of credit will help you successfully manage cash flow shortage.

To Seize Time-Limited Business Opportunities

It’s possible to receive an opportunity to grow your business, such as acquiring a new high-paying client, when you don’t have enough resources to deliver the required services. Getting a line of credit allows you to cover any capital shortage to take on new opportunities and grow your business.

How Can You Benefit From a Business Line of Credit?

Having a line of credit brings many benefits to your small business, including:

  • Flexibility.
  • Lower costs.
  • Accessibility.
  • Credit score improvement.

Flexibility

Flexibility is the most significant benefit small business owners get from business lines of credit. A line of credit allows you to withdraw funds multiple times as long as you don’t exceed the total credit limit and pay back the cash you’ve used.

You also don’t need to apply for access each time you need money. All you have to do is withdraw cash, then ensure to repay it within the provided repayment window. In a way, it’s similar to having a savings account you can access at any time.

Lower Costs

Generally, business lines of credit are less costly than a traditional small business term loan. First, you’ll be paying interest only for the amount of money you withdraw. For instance, if you draw $30,000 from a business line of credit with a $50,000 limit, you’ll only be required to pay interest on the $30,000 you’ve used.

Second, most lines of credit don’t have early repayment penalties compared to traditional loans. This allows you to pay back used funds as soon as possible without worrying about penalties and get access to more cash.

However, note that the costs associated with your credit line mainly depend on the lender you use. Costs you may need to cover include origination fees on application, a monthly maintenance fee, inactivity, and draw fees. When looking for a line of credit, consider one that doesn’t have a lot of charges.

Another important thing to remember is that your credit line costs will increase sharply if you’re late for payment or withdraw beyond the agreed credit limit. To avoid these scenarios, apply for a line of credit that gives you an ample limit and only withdraw funds you can repay within the provided payment period.

Accessibility

For many businesses with bad credit, a credit line is easier to access than a traditional (bad credit) term loan. This is partly because you can get the lowest limits with a line of credit, and some lenders will be willing to give you one if your cash flow is healthy despite having bad credit.

Credit Score Improvement

Many small businesses struggle paying monthly payments on high-interest loans that they receive as a lump sum, affecting their credit scores. A line of credit allows you the flexibility to withdraw small amounts of cash you can pay quickly, multiple times, which works to build business credit score.

Pros & Cons of Business Line of Credit

Like every other business loan, a small business line of credit has pros and cons. When seeking a credit loan, it’s vital to weigh both the advantages and disadvantages to determine whether it’s the best option for you.

Pros

  • Lower interest rates than other business loans.
  • Provides revolving credit; no need for repeat applications.
  • An excellent way to build your business credit score.
  • Suitable for businesses with bad credit.

Cons

  • May require collateral for approval.
  • Some lenders require updated financial statements after each draw.

Where Can You Get a Business Line of Credit?

You can get a credit line from major banks, credit unions, community banks, commercial banks, or online lenders. Traditional banks typically offer higher limits but have more stringent requirements.

You’re more likely to find a lower limit line of credit from smaller banks, credit unions, or online banks. Also, most traditional lenders are reluctant to give unsecured business lines, while other lenders readily approve credit without collateral.

An online lender is an excellent option if you’re looking for unsecured lines with less stringent requirements. Fundbox is one of the most trusted online lenders you can consider, and it offers lines of credit up to $150,000. Its requirements include 6+ months in business and a 600+personal FICO score.

When choosing lenders, it will help to consider SBA-approved institutions. Lenders are more likely to give you higher limit credit through the Small Business Administration (SBA) because it’s guaranteed by the government.

What’s the Difference Between Business Lines of Credit & Business Credit Cards?

It’s easy to confuse a business line of credit with a business credit card because they’re both revolving loan options. However, several differences distinguish the two.

First of all, business lines of credit give you cheaper access to cash, while withdrawing cash from a credit card comes with hefty fees. Business credit cards are more suitable for paying for purchases electronically. On the other hand, a line of credit is more economical for withdrawing cash to use for various purposes.

Secondly, business credit cards carry higher interest rates than lines of credit. A business credit card will also have higher maintenance fees than a line of credit.

Frequently Asked Questions (FAQs) for Business Line of Credit

Final Thoughts on Business Line of Credit

A business line of credit is one of the most flexible financing options you can get to help you bridge cash flow gaps. It also allows you to seize growth opportunities, translating to better revenue generation in the future. When looking for a business credit line, go for a lender with the most favorable conditions to your company.

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Waterfall Methodology: History, Principles, Stages & More

Visual representation of the 5 Stages of the Waterfall Model

If you’re discovering potential project management methodologies for a new project, you might’ve come across a lot of project management jargon. If you aren’t already familiar with them, terms like the waterfall, scrum, agile, lean, and kanban methodologies aren’t immediately digestible. 

This guide is all about explaining one of these terms: the waterfall methodology, also known as the waterfall model. If you’re interested in learning more about this project management method, and whether it suits your project goals or not, you’re at the right place. 

Summary

The waterfall project management methodology lets you plan out your project in a linear manner where each subsequent phase initiates after the last one ends. It’s one of the most straightforward ways to manage a project and is a good choice if you already have clearly outlined objectives.

Try The best PM software for waterfall methodology

 

Best Project Management Software for Waterfall Methodology

Historical Overview of the Waterfall Methodology

The waterfall methodology is the oldest project management procedure out there. Construction and manufacturing firms have traditionally used similar management methods albeit it was not formally recognized until Dr. Winston Royce introduced the idea. 

He developed the waterfall management approach in 1970 to manage the development of large software. Though the term ‘waterfall’ still wasn’t linked to it, it was Dr. Royce’s design that later came to be known as the waterfall model. 

The step-by-step approach helped it gain support from managers quickly, making it the most widely used management methodology. Since then, waterfall project management has been a popular choice, especially for software development projects and other relatively sequential fields of work. 

The waterfall model is named so because it mimics a waterfall in its trajectory. Just like water flows down in one direction, your operations will flow from one step to the next. The flowing water cannot take a u-turn and flow back to a point it has already passed from. Similarly, this management method doesn’t allow you to return to previous phases. The only way to do so is to start over from the beginning. 

Principles of the Waterfall Methodology 

The 3 principles of waterfall methodology

Every management process follows a set of principles. If you’re confused about whether or not the waterfall model suits your operations, we recommend you review the principles it follows. The right project management model should follow the same principles as you want for your project. 

Here are the three basic principles the waterfall project management methodology goes by. 

  • Sequential structure: The waterfall model divides your operations into sequential phases. You can only move to the next stage in your project once the current one is complete. This also means there’s no space for changing course or revisiting a phase after its completion. The only way to go back is to start all over again.
  • Minimal customer involvement: A waterfall project involves minimal customer interaction. This is primarily due to the fact that operations only start after the customer’s requirements and objectives are clearly defined. The first meeting takes place before operations begin and the next when the project is in its final stages. 
  • Robust documentation: This methodology also involves in-detail documentation of all requirements, the development process, and the final outcome. This includes everything from the timeline to the precise route you will take to solve the client’s problems. Since there’s minimal to no customer communication during the development process, every essential detail needs to be documented upfront. 

If these principles are in-line with the project you’re planning, the waterfall model is indeed a suitable option. Let’s dive deeper to discover the different phases involved in the waterfall system development cycle. 

5 Stages of the Waterfall Model – Software Development Cycle

Waterfall usually breaks down a project into five to seven distinct phases. The stages, also known as the waterfall software development cycle for software development projects, are strictly chronological. Each phase has a fixed timeline, requirements, and objectives. 

Although most waterfall systems have five project management stages, more complicated plans have more stages in their development process. Here is what a typical waterfall model looks like:

Visual representation of the 5 Stages of the Waterfall Model
The visual representation of the model mimics a tiered waterfall.

Here’s an in-depth look at each of these phases and what each one entails. Oftentimes, a single phase can involve multiple subsections, but everything is part of the plan taking on one task at a time. 

Stage 1: Documenting Requirements

The waterfall model calls for extensive documentation upfront. In the first stage, you gather information from clients or end-users regarding their requirements and the results they expect from the software or product. 

This is a planning phase and is the last one where you can communicate with clients before work starts on the project. You want to document as much information as you can to make sure you take off in the right direction and have everything mapped out. 

The requirements phase is crucial since it lays the foundation for the next phases. This is also why a lot of time is allocated to gathering requirements. By the end of stage one, you should be able to describe each of the upcoming phases in detail. This includes timelines, costs, risks, assumptions, and dependencies of the project.

Stage 2: Design

The second stage, also known as the analysis stage, is when you review the requirements and develop a design to meet them. Here, your team identifies the path it will take to deliver a solution and the relevant specifications. 

The second stage is often divided into two parts: the logical design and the physical design stage. In logical or high-level design subphase, you will come up with all theoretical solutions that have the potential to meet the client’s objectives. 

Physical design, also known as the low-level design, entails more concrete specifications. This is where you specify the hardware, software, architecture, data sources, and services you will be employing during the project. Note that no on-ground work or coding takes place in this stage. 

Stage 3: Implementation

This is where the action starts. The implementation phase is where the construction or coding, in the case of software development projects, happens. But this might be the shortest stage of all since the entire design is already in place. Your team will follow the documentation from the first two phases to flesh out the actual deliverable.

More complex projects break down large software into smaller programs. Teams employ unit testing where they build and test one unit at a time which is later merged together for the final product. 

Stage 4: Verification

After the implementation phase is complete, the testing or verification stage is where you make sure all requirements are met and whether the product needs debugging. Here, the quality assurance team thoroughly scans the deliverable before it reaches the client. 

In case they find major faults or the requirements are not met, the project goes back to stage one. However, a forced repeat of the design phase takes care of minor bugs. 

You can also utilize a UAT (user acceptance test) for clients or end-users to check for faults and user experience. In case the product passes testing and verification, we move on in the waterfall.

Stage 5: Maintenance

The maintenance stage starts after you release the product and users start using it. You can only identify some issues once the client brings the deliverable to practical use. In case a bug or faulty feature arises, your maintenance team can take care of it. This stage ends when the client is fully satisfied or continues in case they need frequent updates. 

When to Use Waterfall Methodology

The extensive documentation and painstaking planning in the initial stages are two of the best features of the waterfall model. They make sure your time and money are invested right. However, its inflexibility gives you limited space to revise your plans. 

Different projects have different circumstances and requirements. Let’s take a look at some instances where a waterfall system would make a great choice. 

  • Project has clearly defined requirements: If you’re clear about the ultimate objective you want to achieve with a project, go for waterfall management. However, if you or your clients are not sure about the end goal, have ambiguous requirements, and may change course, go for agile project management.
  • Project has firmly set tasks and deadlines: The waterfall model is highly structured by nature. It’s best for projects in the construction or manufacturing industry where you need to maintain deadlines. This is a rigid management methodology for rigid businesses where meeting deadlines is a must.
  • You have time for planning: A considerable amount of time is spent in the first two stages when you use waterfall management. You can go for waterfall if you have ample time to spend on gathering requirements and planning. But if you’re short on time and need to start right away, an agile methodology is a better option.

Pros and Cons of Waterfall Methodologies 

Every project development methodology has its pros and cons. Similarly, the waterfall method has its own which makes it suitable for some projects and unsuitable for others. 

Its straightforward approach and the robust documentation involved are two of the best things about it. On the other hand, the inability to adapt to change is its greatest weakness. 

Advantages of the Waterfall Method

  • In-depth analysis and design phases make sure the implementation follows the correct route. This helps your team take all the right steps and finish the implementation phase quickly.
  • The waterfall method gives an accurate estimate of the total cost and time required for a project.
  • It’s easier to evaluate progress since the model has a highly structured approach and defined milestones.
  • This methodology lets you create repeatable processes. This means new team members can easily get familiarized with the project as everything they need to know is already documented.
  • Limited customer involvement means customers aren’t adding new suggestions or requirements. This helps you avoid delays and reach completion according to the set timeline.

Disadvantages of the Waterfall Method

  • The waterfall management model assumes all requirements can be enlisted at once, but this is not always the case. This incurs higher costs if a client requests an additional requirement midway through the development process.
  • Since requirements and design planning take up a lot of time, projects can take longer to reach completion.
  • Limited communication with the clients during design and implementation.
  • If one stage gets delayed, all subsequent stages are delayed.
  • Doesn’t allow processes to overlap, hence reducing efficiency.
  • A working deliverable isn’t available until the final stages.

Frequently Asked Questions (FAQs) on Waterfall Methodology

Final Thoughts on Waterfall Methodologies

The waterfall methodology is simple, sequential, and easy to apply. It’s most commonly used for software development and construction projects where you need to finalize one phase before you move to the next. 

That said, this project management method lacks flexibility and involves high risk when it comes to complicated projects. It’s a suitable option only if you’re working on a shorter project with clearly defined requirements, and enough time for planning. If you think the waterfall isn’t for you, feel free to discover other project management methodologies to get off on the right foot.

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What Is Payroll For Small Businesses?

Every business, regardless of size, needs to run payroll to pay employees and payroll taxes to the government. For small businesses, one of the biggest time sinks and expenses will be payroll, but you can get help. Read on to learn more about how to do payroll, why it’s important, and the resources available to help.

What Is Payroll?

Payroll is the organized process of calculating the wages owed to employees, calculating and paying payroll taxes, distributing employee wages, and documenting the whole process. As a result, explaining how to do payroll can be a complicated topic. 

It’s important to understand both what is required of you, as the employer, as well as what your employees need to do. Keeping up to date on federal, state, and local income taxes and payroll laws are also vital for a healthy business. 

Unfortunately, the only thing more complex than explaining the payroll process may be actually running payroll. In the inevitable moments of frustration, it may be natural to ask a common question.

Do I Need A Payroll?

A payroll is the organized method used to pay employees and deal with the associated responsibilities. If you don’t run payroll and use an organized process, all that’s left is a disorganized process. The penalties for an error in payroll taxes or employee paychecks are no joke. Small business owners, even those with only one employee, should certainly invest time in a consistent method for running payroll.

However, there are many options available for managing aspects of payroll for you. Rather than trying to manage it by-hand, payroll software is available for any budget, from free offerings to more complex options. Payroll services will manage the entire process for you. 

Payroll Volatility and Small Business

The fewer employees a business has, the bigger an impact any firing or hiring will have on that business. Since small businesses, by definition, don’t have very many employees. As a result, changes in payroll are both more likely to occur and more likely to affect the business’s overall health. Rapid changes in payroll is known as payroll volatility.

Payroll volatility can be difficult to control, as it can be the result of employees leaving unexpectedly. As payroll is frequently a large part of a business’s overall finances, payroll volatility can have a significant impact on financial health. As a result, taking steps to cushion the effects of payroll volatility, such as arranging business financing, can be wise.

How To Do Payroll

Processing payroll is a multi-step process that has multiple requirements, many of which may vary depending on your location and type of business. As a result, there’s no simple answer to the question, “how to do payroll.” Luckily for small business owners, there are a number of ways to get help with processing payroll.

In general, business owners have two options when looking for help with payroll. If they want to keep more personal control, a business owner may prefer to investigate options for payroll and bookkeeping software. Otherwise, you can find a payroll service that will handle almost everything for you.

While you can do payroll by hand without any help, the number of requirements and the frequency with which they change means it can quite literally be a full-time job all on its own.

Different ways you can do payroll

Payroll Software

The number of business tools available today is exploding. Whether you’re looking for bookkeeping software, help with customer relationship management, or just communicating with your team, there are long lists of options. When it comes to payroll, employers can find anything from basic, free software that aids just in calculations, to options packed with helpful features.

Some of the standard features include:

  • Tracking federal, state, and local requirements
  • Maintain employee information, ie. exempt vs. non-exempt, hours worked, OT hours, etc.
  • Calculating and paying payroll taxes
  • Guarantees regarding tax payments and calculations
  • Maintain required records
  • Required reporting of new hires
  • Options for distributing employee pay

Like many business tools, payroll software has been moving to cloud-based apps for easier access and handling of information. Additionally, at this point some payroll software options are essentially equivalent to complete payroll services.

Standard features of a payroll software

Payroll Providers

When employers want to focus more on business operations, they may opt to hire a service to wholly handle payroll processing. Obviously, a service is frequently going to be more expensive than a software solution. For some employers, the extra cost may be worth it. Payroll services will provide all the advantages of software, plus more. 

Those additional services may include things like employee advances on future pay and providing an employee self-service portal. Employers may also be able to access HR reports, handling wage garnishments, and even employee training materials. Using payroll cards or direct deposit may be options for pay.

Payroll Taxes

Payroll can be stressful for a variety of reasons, but payroll taxes probably are at the top of the list for many people. Imagine the anxiety of your yearly personal taxes, only multiplied by the number of employees you have, and required to be filed several times throughout the year. That is one reason payroll software and services are so popular.

As we’ve mentioned, payroll taxes will vary depending on a number of factors, such as your location and type of business. Some aspects will remain consistent, however, primarily regarding federal taxes.

Requirements

Anyone who has received a paycheck has some idea how payroll taxes work. Your gross pay is calculated, then income taxes, FICA deductions, garnishments, etc. are subtracted to calculate your net pay, the amount you’ll actually receive. The employer is responsible for figuring all those amounts and paying them to the government.

These payments can be made either monthly or semi-weekly. Payroll tax filings must be made on the quarterly tax filing deadlines. Those are:

  • April 30th
  • July 31th
  • October 31th
  • January 31th

There may be a grace period for some filings. Tax payments must be made in a timely fashion, however, to avoid penalties.

State and local governments largely follow the federal government’s lead, in terms of payment and filing deadlines. However, employers should certainly confirm their local requirements.

Deadline calendar for tax

Penalties

If tax payments are late, the IRS charges a percentage of the late payment. The percentage increases the tardier a payment is:

  • 1-5 calendar days – 2% of unpaid amount
  • 6-15 calendar days – 5%  of unpaid amount
  • Over 15 days – 10% of unpaid amount

After that point, the IRS will send you a notice requesting payment. The penalty increases to 15% of the unpaid amount 10 days later. 

That’s not the end of penalties, however. The IRS charges interest on unpaid taxes at a rate that varies. As a result, even a small penalty can become significant fairly quickly. There are ways to avoid interest charges, such as applying for a payment plan.

What Is Payroll? Frequently Asked Questions (FAQs)

Bottom Line: What Is Payroll?

Processing payroll for the first few times can be understandably intimidating. However, it will soon become just another aspect of your business. It may be a chore, but one far outweighed by the excitement of running a business.

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All About Agile Project Management

Workflow strategy method illustrated by gears

Agile project management (APM) is a project philosophy that breaks projects down into iterations or sprints. The purpose is to produce bigger ROI, regular interactions with clients and end-users, and improved delivery of product features. 

Today, Agile is used in virtually every industry from software development to real estate. Keep reading to learn more about Agile project management, how it can help projects succeed, and the different project management software that uses Agile today.

Key Takeaways: Agile Project Management

  • Agile project management (APM) offers a flexible and innovative approach to managing projects by breaking them down into sprints.
  • Agile projects help reduce risk and improve overall product quality by encouraging feedback at each stage of the process.
  • In 2001, Agile was started by a group of 17 software engineers who created the Agile Manifesto, a set of values and principles that govern Agile.
  • Agile project management has produced seven frameworks. They are Kanban, Scrum, Crystal, Lean, FDD, Extreme Programming, and the Dynamic System Development Method (DSDM).
  • Of the seven Agile frameworks, Kanban and Scrum are the most widely used.

What Is Agile Project Management?

Agile project management (APM) is a project management method that divides work into sprints to help reduce risk and improve overall product quality with an open feedback loop between the project owner, team members, and customer. 

Definition of APM

Used by product owners and managers worldwide, Agile project management offers a flexible and innovative approach to managing a project by breaking the project down into stages, also known as sprints. It is considered a flexible, iterative design and build process that does not rely on a pre-planned process, executed as the situation demands.

One major difference between the Agile framework and Agile workflow versus other methodologies is in its approach to adaptability to build projects and manage projects. Other project management methods conduct all planning before the project starts.

On the other hand, Agile project management methods rely on an iterative nature that accepts changes mid-way throughout the process with a face-to-face conversation between the project manager, scrum team, and clients. 

How Does Agile Project Management Work?

In a typical Agile development cycle, there are several small cycles or sprints. Each phase contributes to project completion and comprises a product and sprint backlog. A sprint backlog consists of a list of tasks to be completed, revolving around planning, design, testing, and release. With every sprint, new features are added to each product.

According to VersionOne’s 13th Annual State of Agile Report, “97 percent of respondents reported that their organizations use Agile development methods—up from 80 percent in 2011”.

History of Agile 

The earliest instances of Agile occurred around 1913, starting with Ford’s first Michigan automotive plant that reinvented the process of manufacturing with the first moving assembly line. The line assembled an entire vehicle from scratch, cutting the time spent building a car from half a day to less than two hours.

In the late 1970s with the advent of personal computers, consumer demand for electronic products hit an all-time high. This spurred the demand for effective project management systems for a customer’s competitive advantage. However, it continued to see a disparity between the client’s requirements and delivered projects with a nod to creating comprehensive documentation over client satisfaction.

In 2001, a group of 17 software developers led by Martin Fowler and Jim Highsmith created the Agile Manifesto, a document that drilled down four key values and Agile processes essential to project management and Agile projects.

In addition to the four key values, there were 12 additional principles based on customer satisfaction, streamlined delivery of the final product, dividing the project into sprints, and other Agile development methods its founders thought were critical towards completing a project.

Today, there are seven different Agile project management methodologies born out of Agile project management, which include Kanban, Scrum, Crystal, Lean, FDD, Extreme Programming, and the Dynamic System Development Method (DSDM) based on Rapid Application Development (RAD).

Why Choose Agile Project Management?

There are four major reasons for managing projects using Agile:

  1. High product quality.
  2. High customer satisfaction.
  3. Reduced risk.
  4. Better and faster ROI.

High Product Quality

One of the major reasons for choosing Agile project management over other methodologies is high product quality. High product quality takes into account demands by all stakeholders. Regular quality control testing is done throughout the project development process.

High Customer Satisfaction

High customer satisfaction is another reason to choose Agile project management over other methodologies. This high customer satisfaction refers to periodic updates made to each customer, continuous and fast delivery of each sprint, and accepting change requests by the customer.

Reduced Risk

Using the Agile methodology in any project reduces the risk of exceeding budget and surpassing a deadline. This is done with improved communication between the project owner, stakeholders (developers), and the client. There are daily or weekly scrum meetings that have each team member asking what they have achieved since the last meeting.

Agile also encourages proper risk assessment and response. For example, many software development teams classified risk by assigning a value to each risk to determine which ones to prioritize. These are known as risk burndown charts or risk probability and impact matrices. There are also different response strategies depending on the risk, such as avoidance, exploitation, transfer/sharing, mitigating/enhancing, and accepting.

With Agile methodologies, collecting feedback early on and incorporating quality assurance testing throughout the project all contribute to reduced risk.

Better and Faster ROI

One of the biggest benefits of an Agile approach is turning in a better and faster ROI for all types of projects, including software development projects. A reason for this is due to Agile’s iterative process, where the first iteration or sprint can offer new functionality that increases ROI. This is in contrast to waiting until the end of the project to introduce a new feature.

In an Agile environment, better ROI also extends to reduced costs, defects and delays. Spring cycles make it easy to identify and repair defects before they make it onto production.

Principles and Values of Agile Project Management

According to the Agile Manifesto, the four key values for Agile management are:

  • Individuals and interactions over processes and tools.
  • A working product is more important than comprehensive documentation.
  • Customer collaboration comes before contract negotiation.
  • Responding to change is preferred over following a plan.

Agile project management focuses on the importance of client communication and keeping the customer involved in all project phases. This is in stark contrast to the Waterfall development method that allows customers to provide feedback before and after work is completed.

Read: Waterfall vs Agile Methodology: What’s Better for Your Project?

Agile processes harness change, and unforeseen circumstances could include a revision to the final project scope, demand for extra features, and other customer-led feedback that alters time, cost, and resources.

Popular Agile methodologies adhere to the following 12 principles:

  • Customer satisfaction through continuous delivery of the product.
  • Divide large chunks of work into smaller and achievable tasks for quicker completion and easier integration of changes.
  • Adhere to the decided timeframe for the delivery of a working product.
  • Stakeholders must collaborate frequently to make sure the project is moving in the right direction.
  • Create a supportive environment to motivate team members and encourage them to get the job done.
  • Prefer face-to-face communication over other methods.
  • Working software is the primary measure of progress.
  • Try to maintain a constant pace indefinitely for development.
  • Maintain the quality of the product by paying attention to details, leading to technical excellence.
  • Maintain simplicity.
  • Promote self-organization in the team.
  • Regularly reflect on your performance for continuous improvement.

All of these project management Agile principles pay a nod to disciplined Agile delivery over traditional project management methods, dividing large volumes of work into smaller, manageable chunks, and getting buy-in from all stakeholders. It also believes in a customer-centric approach that demands face-to-face communication and gives team members a platform to speak on proposed changes.

Despite the changes to work, the goal continues to be producing all final deliverables, as evident by its “working software is the primary measure of progress” principle.

Lastly, a key Agile methodology principle is continuous improvement through iteration, where all mistakes are recognized and learned from. Many project managers may decide to engage team members in one-on-one or group sessions for this purpose.

6 Phases of Agile Project Management

The six phases/stages of Agile project management are:

  1. Concept.
  2. Inception.
  3. Iteration.
  4. Release.
  5. Maintenance. 
  6. Retirement.
six stages/phases of agile methodology

Concept

The Concept phase of Agile project management refers to determining project scope. In this stage, the product owner discusses all requirements and deliverables with the client, prioritizing a list of features in order of most to least important. All time, resources, and costs are factored in with a thorough and detailed analysis.

Inception

Inception in Agile project management refers to assembling the right development team to proceed. Team members will be identified and given all the tools and resources added to start the design process. The design process can incorporate mock-ups and light sketches of product infrastructure, taking input from the product owner, team members, and client. Consider this stage the brainstorming section.

Iteration

Iteration is the longest phase in Agile project management. The first iteration or sprint will produce a bare-bones foundation, whereas future iterations will focus on additional features and improvements. Remember, the goal of Agile product development is to conduct work in short cycles or sprints, with each sprint allowing enough time to gather feedback, assess new risks, and guide future iterations.

Release

Release in Agile project management refers to quality assurance. All checks are in place to evaluate the product and check for bugs, defects, and effective code. During this stage, developers are hard at work clearing out bugs and creating documentation and user training. Once the release stage is complete, the product’s final iteration can be released to the wild.

Maintenance

Maintenance is the critical stage where the product is fully available to customers by a development team and self-organizing teams. During this time, all product end-users are engaged with incoming documentation and user training by product builders. With Agile methodology demanding a dynamic systems development method, new iterations may often occur to upgrade the existing product for early and continuous delivery.

Retirement

In Agile project management, retirement refers to the time a product becomes expired, soon to be replaced with new software, or phased out altogether due to new business demands, a lack of sustainable development, increased competition, etc. These result in “end-of-life”: activities by developments, including withdrawing all support and notifying end-users the product is no longer available.

APM Methodologies

One of the benefits of Agile is its flexibility. Five popular Agile methodologies or frameworks used in Agile project management are:

  • Scrum.
  • Kanban. 
  • Extreme Programming. 
  • Lean Development
  • Crystal. 

All of these Agile methods and Agile project management practices have their own strengths and weaknesses connected with sprint planning and the composition of software teams.

Scrum

Scrum is a visual way of managing projects that groups tasks into columns based on progress. The technique helps teams work together and adapt to changes and problems by breaking the project up into chunks — these tasks are then worked on in sprints. With feature driven development, this allows only one sprint to be planned and managed at a time.

Kanban

Another one of the key benefits of Agile is powerful visualization tools. Kanban is a highly visual representation of projects that allows users to create a Kanban board and label tasks and subtasks into three key categories: “to do,” “doing,” and “completed.” Many popular project management tools like ClickUp and monday.com feature Kanban boards that use intuitive drag and drop functionalities to project cards. Consider the Kanban board a preferred choice for Agile team visual learners and designers.

Unlike Scrum’s Agile methodology, sprints are not planned and managed one at a time, but collectively.

Extreme Programming

Also referred to as XP, this framework works similar to Scrum but incorporates 12 supporting Agile approaches that are software-centric, which include:

  • Planning games.
  • Small releases.
  • Customer acceptance tests.
  • Simple design.
  • Pair programming.
  • Test-driven development.
  • Refactoring.
  • Continuous integration.
  • Collective code ownership.
  • Coding standards.
  • Metaphor.
  • Sustainable pace.

Lean Development

Lean development shares some of the same Agile project management methodologies as Agile with newer principles that include the following:

  • Eliminating waste.
  • Build quality in.
  • Create knowledge.
  • Defer commitment.
  • Deliver fast.
  • Respect people.
  • Optimize the whole.

Crystal

Started by Alistair Cockburn, one of the original Manifesto authors, for a 1991 IBM project, Crystal is an Agile project management process that focuses on individuals and interactions, not processes and tools.

It is based on two beliefs:

  • Teams can find ways on their own to improve and optimize their workflows.
  • Every project is unique and always changing, which is why that project’s team is best suited to determine how it will tackle the work.

Some family members of the Crystal methodology include Crystal Clear, Crystal Yellow, Crystal Orange, and Crystal Red.

Frequently Asked Questions (FAQs) on Agile Project Management

Final Thoughts on Agile Project Management

There are many APM projects that can be used. Some notable types of projects include small to large software development, product development, and virtually any business where the deliverable can be produced in incremental sprints. Consider Agile even valid for opening up a new book store or upgrading a new franchise location.

Remember, all products could benefit from feature-driven software development thanks to collaborative working, shorter development cycles, and Agile practices. All of this can be achieved with improved communication between project owners/developers/clients, more frequent reviews, two-way communication, and a more collaborative work environment that values feedback.

To become proficient in Agile Development methodologies, there are several certifications available. Some of the more notable ones include PMI Agile Certified Practitioner (PMI-ACP) and the APMG International Agile Project Management certification. Both require a secondary degree and several hours of Agile training in addition to thousands of hours of general experience on project teams. With heavy study and real-world experience, these certifications enable you to become a scrum master.

Anyone working on Agile teams or looking to understand and use Agile principles in project management is encouraged to obtain PMI Agile Certified Practitioner (PMI-ACP) or APMG International Agile Project Management certification. Many members of teams work with these certifications on hand.

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SurePayroll Review: Great for Small Businesses and In-Home Help

SurePayroll review

SurePayroll is a payment processing app designed to take the stress and guesswork out of paying your employees. This SurePayroll review takes a look at the software’s top features and what makes it worth considering for your small business.

Our Verdict

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SurePayroll

From $19.9

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Designed for small to medium businesses, SurePayroll features the ability to auto-process payroll while dealing with the nuances of tax forms and state government submissions.

One of its most notable features is an entire service dedicated to payroll for in-home care. SurePayroll easily navigates all the pitfalls of payroll processing for these employees that often amount to penalties and headaches.

  • Unlimited payroll runs
  • 2-month free trial
  • Can process and submit taxes
  • Struggles with employees who switch between hourly and salaried pay
  • App can be challenging to navigate
  • Long customer service hold times

SurePayroll at a Glance

Screenshot of SurePayroll website homepage

SurePayroll stands tall as one of the best payroll options for small businesses currently available. The product has three different tiers of service starting at $19.99 per month and working their way up to $49.99 monthly at the highest level.

All plans offer the option to perform payroll automatically, and payroll can be run an unlimited number of times per day without additional cost. The Full Service plan goes so far as to calculate and submit all payroll taxes alongside a guarantee that they will be filed correctly. Higher tier plans drop money into employees’ accounts two days after submission for prompt payment. 

The payroll system has a feature tier specific to in-home care, such as nannies. This particular package contains all the payroll and tax info you need to avoid penalties and fees.

Screenshot of SurePayroll Nanny Payroll services page

SurePayroll extends its service to offer worker’s comp, 401(k) plans, health insurance, and pre-employment screening, though HR services aren’t included in any plan. Having these options available keeps everything under one roof while also meaning you don’t have to search around for them on your own.

Who SurePayroll is Best For

SurePayroll’s line of services are all set up specifically with small and medium businesses in mind. Pricing is reasonable at the onset but grows quickly for organizations with a large number of employees. Should you need to keep track of payroll for a household helper, SurePayroll has a feature set just for that.

Pricing

SurePayroll has three tiers of service to choose from, depending on your needs. The No Tax Filing plan costs $19.99 per month, plus $4 for each employee in your organization. The Full Service plan starts at $29.99 monthly but charges $5 per team member. Finally, the Household Payroll plan runs $49.99, including one employee. Additional employees will set you back $10 a month for each.

SurePayroll logo

No Tax Filing

Full Service

Household Payroll

Price

$19.99/month + $4 per employee

$29.99/month + $5 per employee

$49.99/month (includes one employee)

$10 per additional employee

Free two-day direct deposit

File and deposit taxes

Unlimited payroll runs

Auto payroll

New hire reporting

PTO/sick time tracking

SurePayroll Features

SurePayroll’s suite of payroll handling tools center around making the process as simple as possible. It includes two-day direct deposit, which is faster than some big names in payroll that may take up to four days to deposit funds. The company also offers paid time off (PTO) and sick day time tracking without you having to integrate an app.

Free Two-Day Direct Deposit

SurePayroll provides the means to pay your employees through printed checks or via direct deposit. There’s no additional charge for either one outside of the costs you’ll incur for paper and ink for a printed option.

When it comes to direct depositing, SurePayroll lets you know once you’ve completed payroll when employees can expect the funds to reach their bank accounts. If you’ve signed up for the Full Service or Household Payroll plan, SurePayroll promises a two-day turnaround.

File and Deposit Taxes

Screenshot of Payroll processing, tax calculation on SurePayroll

Even with a small business, calculating and submitting payroll taxes and filings is quite the chore. In the Full Service and Household Payroll plans, SurePayroll will crunch the numbers and send everything off for you error-free.

Read: How to Avoid Common Payroll Mistakes

Even if you opt for the No Tax Filing plan, SurePayroll still runs calculations for you when it generates payroll information. That being said, it’s up to you to submit the paperwork and applicable fees on your own.

Unlimited Payroll Runs

Payroll run process on SurePayroll

Whenever the need arises, SurePayroll allows you to run an unlimited number of payrolls on any day at any time. Whether you need to add, change, or remove information, you can do it for no additional cost. Best of all, this feature is available at any price tier.

Auto Payroll

With Auto Payroll, you can set up a repeating day of the week and time that SurePayroll will run the numbers for you. The software will send you a reminder before payroll processing begins, giving you time to input salary numbers or hours worked for each employee. You can even have SurePayroll add in these values automatically if you’re sure they won’t change from week to week.

When the aforementioned day and time arrive, SurePayroll will run the payroll and prepare checks or send out direct deposits as instructed. The platform will inform you once the process is complete.

New Hire Reporting

Screenshot of Add Employee/Contractor page on SurePayroll - New hire reporting

Depending on your state, you only have so many days to report a new employee to the state government. SurePayroll can take the information for new staff entered into its payroll system and send the necessary details to the powers that be so you don’t have to.

PTO/Sick Time Tracking

Although only available in the Household Payroll plan, SurePayroll is able to keep tabs on days employees miss and track vacation days they can use this year. Since the Household Payroll plan is designed for nannies and other in-home services, you won’t be caught completely off guard by time-off requests.

Alternatives to SurePayroll

SurePayroll has several features at its disposal, but struggles with a difficult-to-manage app and lackluster customer service. While good at what it does, the software doesn’t offer much outside of payroll. If you’re looking for something a little different, here are some alternatives to SurePayroll that are also worth considering:

Gusto

Gusto is a modern payroll platform in the same vein as SurePayroll. Similar to SurePayroll, Gusto can auto-process payroll and run the numbers as many times as needed. Although comparable on payroll, Gusto adds time management and employee benefits to its package that SurePayroll does not have. If you’re interested in both software, see the Gusto vs SurePayroll review.

Still built for small to medium-sized businesses, Gusto does cost more because of its enhanced feature set. Plans start at $39 per month but can reach as high as $149. Read the Gusto review to learn more about it.

Wave

Wave has payroll with direct depositing and automation options alongside timesheets for either $20 or $35 per month, depending on the state your business is located in. What makes Wave stand out is the free accounting and invoicing software that you can use at any time.

Following the same trend as SurePayroll, Wave is best for smaller businesses without a massive number of employees to process payroll for. Wave is limited to automatic filing in only 14 states. Read the Wave payroll review if you’re interested in this software.

Payroll4Free

Payroll4Free boasts that its basic payroll software is entirely free for any business with fewer than 25 employees. These features include payroll processing, tax calculations, and reporting. Tools are more rudimentary than what SurePayroll offers, but the price is right.

If you want the software to process taxes and run direct deposits for you, this will cost $30 per month.

Frequently Asked Questions (FAQs) for SurePayroll Review

Bottom Line on SurePayroll Review

SurePayroll is a stellar tool for small to medium businesses, offering the capability to automate payroll and tax submissions so you don’t have to. In addition, you can run an unlimited number of reports and pay your employees within a few days of payroll submission. Best of all, it is a very affordable solution even for new ventures just getting their feet off the ground.