Two things small businesses obsess about are cash flow and payroll. Square has been focused on meeting those needs through services such as instant and same-day deposits for merchant activity and the introduction of payroll processing which was added in 2015. To improve access to the payroll function, Square has announced that their payroll service is now available as a mobile offering. ZDNet reported:
First launched in 2015 as a desktop service, Square Payroll offers the standard array of payroll services. Employees clock in and out of their shift via integrated time cards on Square’s Register app. When the pay period closes, the business owner imports employee hours and Square’s payroll service calculates applicable taxes and sends the funds out to workers. Employees have the ability to enter their own tax details upon setup, and state and federal payroll taxes are filed automatically for the business.
“The app works just like the web experience. Import your timecards or enter hours, submit your pay run, and leave the rest to us (we’ll take care of filing, paying, and withholding your payroll taxes). And now you can easily do all of this on your mobile device, no matter where you are,” the company said in a blog post.
Square’s payroll capability will not meet the needs of larger or complex businesses, but it is another way that Square is helping small and micro business. If Square can attract enough business to Square Payroll, few product are stickier than payroll processing. The reverse is true as well; mess up employee payroll and associated taxes and businesses will leave in drives. Wall Street took notice of this as legacy payroll providers ADP and PayChex respective stock both lost ground, at least temporarily, following Square’s announcement.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
