During the pandemic, work went remote or hybrid, and startups led the charge. The number of remote job postings nearly quadrupled — a 357% leap, according to LinkedIn.
But as accountants supporting the rapid growth and hiring that ensued, we found it was not without its costs and challenges. For one, in the eyes of the IRS and Department of Labor, those businesses were suddenly operating over many not-so-remote state lines.
Since the pandemic began, our firm, Furey, has onboarded more than 20 clients — all venture-backed startups — onto Gusto, and that number continues to grow. We help our clients establish efficient and scalable payroll processes which includes providing hands-on help with onboarding new hires, initiating benefits, filing state registrations, and ensuring compliance, while also incorporating advanced payroll insights into a monthly financial package. And we can do it easier because of Gusto.
In this article, we share how we prepare our startup clients for success as they grow their teams, along with some of the advanced reporting that we believe is only possible through this platform.
Gusto helps them manage payroll across state lines
Let’s return to that 357% jump in the number of remote job applications. Prior to the pandemic, only 6% of businesses dealt with remote workers. Now 50% do. And 63% of them want advice on managing remote teams.
Remote and hybrid are here to stay. In fact for employees, flexible work is the second most desired benefit after health insurance. Most of our clients must now navigate registering across more state and local lines, and we help them solve that in two ways: We can use CorpNet through Gusto to handle the paperwork with those agencies so our clients can start paying those employees immediately, and we provide additional support to keep them compliant.
You might think this’d be a longer section, but it’s really that straightforward. With the client’s address and ownership information, we act as their proxy, and our accountants can follow the step-by-step instructions for states they’re unfamiliar with.
It allows us to provide advanced payroll reporting
Here’s where we get to the good stuff. With all the setup handled, our clients tend to grow quickly. As they grow, they need insight into their payroll spend to know how it’s affecting their burn rate.
Most of what we need is already organized within Gusto, so we rarely have to build custom spreadsheets to analyze payroll trends. But if we do, all that data is in one place in Gusto, which makes it easy. We generate reports into how they’re spending on payroll by location, department, or employee class based on journal entries on Gusto.
That means we’re able to tell clients things like:
- You’re spending 20% more than last quarter on sales headcount
- Your marketing department makes up 15% of your year-to-date people costs
- In the last month, your Manhattan store spent 10% more on payroll than your Boston store
All in all, we estimate the combination of advanced insight and payroll automation saves our accountants 1-2 hours on closing the books each month. Plus, those time savings only increase as those clients add more employees, which ours invariably do.
Let’s look at how we put this to use. One of our clients, a rapidly growing health and wellness startup, needed to determine how to best segment its business into departments. By leveraging the Gusto reporting data, we were able to show the jump from Regular Salary Expense to Fully Loaded People Costs (vacation pay, benefits, taxes, etc.) by department. With Gusto data, our team was able to deliver an accurate, forward-looking budget that allowed our client to analyze actuals against their assumptions.
Helping startups start up faster
As they say, what makes a startup a startup isn’t venture funding, or team size, or ambition. It’s growth. High-growth startups need insight to direct that growth, and we’ve found that by consolidating clients on a data-first payroll platform, we can set them up to leap forward faster — no matter where those remote hires move.