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Updated: Sep 27

Running a small- or medium-sized business means walking a financial tightrope: you’ve got an operation too big or complex to run solo, but every penny still counts. And even more importantly, time spent working outside your specialty (especially when you’re balancing the books or running payroll) is inefficient and takes away from your core role (i.e. driving revenue). So what’s the best solution, or combination of solutions, for SMBs who have a small (or nonexistent) HR/accounting/finance technology footprint? Dive in with Liquid as we examine the best accounting, payroll, and bill pay solutions for your situation:


But before we begin…


Some questions about your SMB: Question 1: Are you a fast-growing company or steady-state? Question 2: Do you primarily focus on selling goods or services? Question 3: Do you use contractors and vendors, employees, or some combination of both? Question 4: If you use contractors, do they function more like employees (fulfilling a specific role in your business) or are they project-based? Pencils down.


Question 1: Are you a fast-growing company or steady-state?


If you’re a steady-state company, then the best services for you will help you keep track of recurring AP and AR and pay your team regularly.

For your accounting and general bookkeeping, WaveApps and QuickBooks are excellent choices. WaveApps offers the opportunity for purchases and daily transactions to be automatically recorded into your accounting record and includes optional payroll services. QuickBooks, meanwhile, has a track record of reliability and an approachable interface for SMB owners without a finance degree. Bill payments can be done directly through your bank. Automated billpay can assure that you’re never behind on regular costs your company accrues, and most major banks support integration into popular accounting programs. Banks also offer ACH and wire payments that can be lower than those offered within accounting software or through a 3rd party billpay site. If you’re a fast-growing company, proceed to Question 2.


Question 2: Do you primarily focus on selling goods or services?


Fast-growing companies need flexible solutions that can quickly accommodate months of growth without locking you in to pricey service plans or subscriptions. For companies that sell goods, you likely have regular suppliers and vendors you count on. But retail can be fickle, and perfect solutions are equipped to help your company tighten its belt during the leaner months. If your company only needs a few log-ins for accounting, then there are plenty of excellent, powerful accounting subscriptions that can fit your company well. Perennial favorite QuickBooks is never a bad option for SMB accounting, but costs more based on the number of subscriptions needed. Xero, another full-service accounting solution, charges one flat fee for your business no matter how many people use it, but can have a steeper learning curve for first-time users. Sage Intacct is another popular cloud-based accounting system with modular components that allow you to pinpoint the features specific to your business. Netsuite is an enterprise option that includes tools like inventory management, but is best put to use by accountants and CFOs.


Payroll is, let’s be honest, a time suck. New employees need to have their tax information confirmed, their information forwarded to your state’s unemployment office, their withholdings calculated, and have tax documents issued to them on behalf of the business at the end of the year. And unless you happen to specialize in tax law or have your CPA license, there’s a good chance you might overlook something — not to mention the complexities that arise when you start working in health and retirement benefit plans for your employees. That’s why outsourcing your payroll can be one of the smartest and most efficient choices you make for your small business. Payroll (and by payroll, we mean hiring people as official W2 employees) generally comes in two flavors: through a payroll service provider (PSP) or professional employer organization (PEO). The differences between a PSP and a PEO are worth an entire article on their own, but for the purposes of this article, we’ll keep it simple: A PSP is like hiring a babysitter to handle your employees’ tax and payment information, while a PEO is like having a co-parent who shares the legal responsibility. PEOs can also allow you to hire employees internationally, but that comes with significant costs. For PSPs, Gusto and QuickBooks are both efficient, straightforward options that, even at their cheapest price point, provide you with the tools to run payroll and file taxes. ADP, another popular option, is generally more expensive than QuickBooks and Gusto, but offers more concierge services — you’re paying for the privilege of contacting a live person much more easily. Justworks and TriNet are also in the cloud-payroll game and offer an extended suite of HR and PEO solutions - but are more expensive than software like Gusto. Other PEO solutions include Insperity, BambooHR, and Rippling — each provides different levels of HR integration and employee services, so if a PEO is right for you, it’s worth your time to understand the fees and structure of the arrangement you’re entering into. Terminating your SMB’s relationship with its PEO can also be difficult if not done at the start of the tax year. You’ll also need a robust AP system to pay your vendors and contractors. Bill.com is a straightforward way to manage payments and purchase orders so long as you don't require project management tools or compliance checks. Tipalti has more end-to-end invoice and project management controls, but still leaves room for error — and lost documents — for its users. Liquid contains everything you need in one dashboard to track contracts, control your spend, and pay domestic and international invoices. So whether you need to pay a supplier or track a dev shop’s progress, you have all the tools you need in one toolbox.

If you’re a service-oriented business, move on to Question 3.



Question 3: Do you use contractors and vendors, employees, or some combination of both?


Service-based companies like agencies and event coordinators often rely on some combination of full-time employees, who require a HR payroll solution, and contractors and vendors, who — as discussed above — should be paid through a different system.


If your business relies principally on employees then you’re looking for solutions that can include integrated payroll. This means your accounting software options run the gamut from QuickBooks, Xero, Intacct, Freshbooks, and NetSuite. Your PSP/PEO options will likely play a key role when your team functions mostly as W2 employees, so you can choose from Gusto, ADP, TriNet, Justworks, Insperity, Bamboo, and Rippling for your payroll and HR solutions


With minimal use of non-employees, you may not need a full suite of the project-management services Liquid provides. Therefore, using your bank or bill.com may be the easiest way to get your occasional invoices processed.


If you use contractors and vendors, then keep moving to Question 4.


Question 4: If you use contractors, do they function more like employees (fulfilling a specific role in your business) or are they project-based?


SMBs that utilize contractors are uniquely positioned to punch above their weight when opportunity strikes while benefiting from lower overhead and keeping their core team lean. If your contractors and vendors function more like employees, then you’ll need to primarily rely on an HR payroll solutions mentioned above. But if your flexible workforce is primarily project-based, then the key difference is how you pay your contractors. You’ll still likely use a budget plan with a PSP to handle the nitty-gritty of tax filing and withholding for your core full-time team. But when it comes to AP and contractors, we’ve previously discussed why it’s important to pay your contractors with a different system than payroll. In a single word: compliance. Erecting a firewall between your employees and contractors prepares you for a compliance audit if, for example, a contractor files for unemployment and lists you as their employer. Because contractors often come onboard in project-specific roles, the best solutions for paying contractors should have baked-in support to track your company’s contractor spend, issue payments, and keep track of contracts and other documentation.


Bill.com, Tipalti, and other traditional AP systems are great at what they do — paying bills — but they’re not built to manage service vendors and contractors. Which means you need a solution that doesn’t come with the square-peg-round-hole incompatibility of one-size-meets-most billpay.


Liquid was built by small business owners for other people who own their own agile businesses. Liquid keeps your contracts and onboarding documents ready at hand and uses them to automatically generate and match invoices and create spend projections. Liquid provides an online portal for contractors and vendors so that they can provide and update all of their own financial information. Liquid’s one-button payment platform allows you to pay your entire flexible team around the world with ease, efficiency, and security. And the best part - with Liquid, vendors always receive the total amount of their invoice and avoid intermediary and recipient bank fees.


You’ll benefit from having project management tools to track the progress and payments of your contractor team. Additionally, contractor-based work opens you up to a workforce that expands the globe — which means wire transfer fees and the power to make international payments are crucial. Liquid helps you pay your flexible team without the expenses and legal hurdles of a PEO while staying in compliance. Liquid’s complete finance and operations suite keep your contracts organized, matches invoices against work orders, gives you insight into actual vs. expected spend and helps you maintain a robust talent bench so that you can custom-build the perfect term for your next project.


So if you’re an agile SMB looking to punch above your weight, contact Liquid today for an in-person demo.

6 min read

Finance and Operations Tools for SMBs

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