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  • Paying Contractors: A Small-Business Guide to Process and Tools

    Paying Contractors: A Small-Business Guide to Process and Tools

    Many small businesses work with independent contractors, such as designers, developers, writers and consultants. Paying contractors is simpler than running payroll for employees in some ways, but it still requires organization and attention to rules.

    Important: This guide is general information for U.S. businesses. It is not legal, tax or HR advice. Classification and reporting rules are complex and vary. Use official IRS and state resources and consult qualified professionals.

    Contractor vs. Employee

    The first question is whether a worker is truly an independent contractor. Classification depends on factors defined by federal and state law, such as control over how work is done and the nature of the relationship. Calling someone a contractor does not make them one. Misclassification can result in penalties and back taxes.

    If you are unsure, consult a professional and review official resources. See our hiring your first employee checklist.

    Contractor Agreements

    A written agreement clarifies expectations. Common elements include:

    • Scope of work and deliverables
    • Payment terms and rates
    • Deadlines
    • Ownership of work product
    • Confidentiality
    • Termination terms

    An attorney can help draft agreements.

    Onboarding Contractors

    Form W-9

    U.S. businesses commonly collect Form W-9 from U.S. contractors to obtain taxpayer identification information. Collect it before making payments.

    Foreign Contractors

    Contractors outside the United States may require different forms. Consult official guidance or a professional.

    Payment Details

    Collect payment details securely. Avoid collecting sensitive information over unsecured email.

    Payment Methods

    Bank Transfers

    Direct bank transfers are common and often low-cost.

    Payroll Platforms

    Many payroll providers support contractor payments and year-end forms. See Gusto vs. ADP.

    Accounting Software

    Some accounting tools support contractor payments.

    Payment Apps

    Payment apps can be convenient. Check whether business use is allowed, fees and how payments are reported.

    International Payments

    International payment platforms handle currency conversion. Compare fees and exchange rates.

    Contractor Invoices

    Contractors often send invoices. Establish a process for receiving, approving and paying invoices. Track due dates.

    Record Keeping

    Keep records of:

    • Contracts
    • W-9 forms
    • Invoices
    • Payments

    Organized records make year-end reporting easier. See bookkeeping basics for small business.

    Year-End Reporting

    U.S. businesses may need to file information returns, such as Form 1099-NEC, for certain contractor payments that meet reporting thresholds. Thresholds, rules and deadlines can change, so check current IRS guidance. Payroll and accounting software can help prepare forms.

    Choosing Tools

    Look for:

    • Contractor onboarding and W-9 collection
    • Payment options
    • Year-end form preparation
    • Integration with accounting software
    • International payments if needed

    Compare current pricing and features.

    Common Mistakes

    • Misclassifying employees as contractors
    • Paying before collecting W-9 forms
    • Not having written agreements
    • Missing year-end reporting deadlines
    • Collecting payment details insecurely

    Building a Contractor Payment Process

    A consistent process reduces errors:

    1. Agree on terms in a written contract
    2. Collect onboarding forms before work begins
    3. Receive invoices in a consistent format and location
    4. Review and approve invoices against the agreement
    5. Pay on schedule using your chosen method
    6. Record payments in your accounting software
    7. Prepare year-end forms as required

    Documenting this process helps if someone else on your team handles payments.

    Setting Payment Terms

    Clear payment terms help both sides. Common elements include when invoices are due, how payments are made, how disputes are handled and whether deposits are required for larger projects. Paying contractors reliably and on time builds good working relationships.

    Protecting Sensitive Information

    Contractor forms contain taxpayer identification numbers and bank details. Use secure portals or payroll platforms to collect them, limit access and store records securely. Avoid collecting sensitive details in chat messages or unsecured email.

    Reviewing Contractor Relationships

    Periodically review long-term contractor relationships. If a relationship changes over time, such as more control over schedules and methods, classification questions may arise. A professional can help review.

    Contractor Payment Checklist

    • Classification reviewed
    • Written agreement signed
    • Form W-9 or appropriate form collected
    • Payment details collected securely
    • Invoice process defined
    • Payment method chosen
    • Payments recorded in accounting software
    • Year-end reporting requirements checked
    • Records stored securely

    Paying International Contractors

    International contractors bring additional considerations, including different tax forms, currency conversion, transfer fees and local laws in the contractor’s country. International payment platforms can simplify payments, but rules still apply. Consult a professional familiar with cross-border work.

    Communicating With Contractors

    Clear communication prevents payment disputes. Confirm when invoices are received, let contractors know when payments are scheduled and respond promptly to questions. A shared tracker or project management tool can help both sides see the status of deliverables and payments. See project management tools compared.

    Starting Small

    If you are paying your first contractor, start with a simple process: a written agreement, a completed W-9 for U.S. contractors, a consistent invoice format and payments recorded in your accounting software. As you work with more contractors, a payroll or contractor payment platform can automate onboarding, payments and year-end forms. Whatever tools you use, keep classification in mind and ask a professional when relationships change. Review your contractor list each year before year-end reporting deadlines so forms can be prepared on time.

    A Note on Timing

    Late payments strain contractor relationships. Paying reliably on the agreed schedule, and communicating early if a delay is unavoidable, builds trust and often leads to better work over time.

    A Note on Documentation

    Keep each contractor’s agreement, forms, invoices and payment confirmations together in one folder or system. If questions come up later from the contractor, your accountant or a tax agency, having everything in one place makes answers quick and reduces stress for everyone involved.

    Frequently Asked Questions

    How do I know if someone is a contractor?

    Classification depends on legal factors. Consult official guidance or a professional.

    Do I need a W-9 from contractors?

    U.S. businesses commonly collect W-9 forms from U.S. contractors.

    Do I need to file a 1099?

    You may for certain payments. Check current IRS guidance.

    Can I pay contractors through payroll software?

    Many payroll platforms support contractor payments.

    How do I pay international contractors?

    International payment platforms can help. Check forms and fees.

    The Bottom Line

    Paying contractors requires correct classification, written agreements, onboarding forms, secure payments, good records and year-end reporting. Use tools that simplify the process and consult qualified professionals for classification and tax questions.

    Editorial note: Biz Benchly is independent and reader-supported. This guide is based on research into manufacturer documentation, published specifications and widely accepted best practices; we have not been paid to mention any product. If we add affiliate links in the future, they will be clearly disclosed per our Affiliate Disclosure.

  • Business Bank Account Guide: Why You Need One and How to Choose

    Business Bank Account Guide: Why You Need One and How to Choose

    One of the first practical steps for a new business is opening a business bank account. Separating business and personal finances makes bookkeeping easier, looks more professional to clients and can matter for legal and tax reasons.

    This guide covers general considerations. It is not financial, legal or tax advice. Account features, fees and requirements vary by bank and change over time. Check current terms directly with banks and consult qualified professionals.

    Why Open a Business Bank Account?

    Cleaner Bookkeeping

    A dedicated account keeps business transactions in one place. See bookkeeping basics for small business.

    Professionalism

    Clients may pay a business name rather than a personal name.

    Separation of Finances

    Professionals often recommend keeping business and personal finances separate, particularly for LLCs and corporations. Ask an attorney or accountant how this applies to you. See how to start an LLC.

    Easier Tax Preparation

    Separate accounts make it easier to identify business income and expenses.

    Types of Business Accounts

    Business Checking

    For daily transactions, deposits and payments.

    Business Savings

    For setting aside money, such as for taxes or emergencies.

    Merchant Accounts

    For accepting card payments, often provided by payment processors.

    Traditional Banks vs. Online Banks

    Traditional Banks

    Pros: Branches, in-person service, cash deposits and broader services such as loans.
    Cons: May have more fees or minimum balance requirements.

    Online Banks and Fintech Platforms

    Pros: Often fewer fees and modern apps with integrations.
    Cons: Limited cash deposits and in-person support. Some fintech platforms partner with banks to provide accounts; check how deposits are held and insured.

    Credit Unions

    Some credit unions offer business accounts with competitive terms. Membership requirements apply.

    Features to Compare

    • Monthly fees and how to waive them
    • Minimum balance requirements
    • Transaction limits
    • Cash deposit options
    • ATM access
    • Wire and transfer fees
    • Mobile app and online banking
    • Integrations with accounting software
    • Multiple users and permissions
    • Debit cards and spending controls
    • Deposit insurance coverage

    Documents Typically Required

    Requirements vary by bank and business type, but commonly include:

    • Government-issued identification
    • EIN or Social Security number for sole proprietors
    • Business formation documents for LLCs and corporations
    • Business licenses where applicable
    • Operating agreement or ownership information

    Check with your bank before applying.

    Setting Up Your Account for Success

    Connect to Accounting Software

    Bank feeds import transactions automatically.

    Set Up Tax Savings

    Some owners transfer a portion of income to a savings account for taxes. Ask a tax professional how much to set aside.

    Use Business Cards for Business Expenses

    Use the business debit or credit card for business purchases. See our expense tracking apps guide.

    Enable Security Features

    Use two-factor authentication and alerts.

    Pay Yourself Properly

    How you pay yourself depends on your business structure. Ask an accountant.

    Accepting Payments

    Connect your account to payment processors and invoicing software. See invoicing software for freelancers.

    Common Mistakes

    • Mixing personal and business transactions
    • Choosing an account with fees that do not fit your activity
    • Ignoring cash deposit needs
    • Not connecting to accounting software
    • Skipping security features

    Questions to Ask a Bank

    Before opening an account, consider asking:

    1. What are the monthly fees, and how can they be waived?
    2. Are there minimum balance requirements?
    3. How many transactions are included each month?
    4. How can I deposit cash?
    5. What are fees for wires and other transfers?
    6. Can I add other users with limited permissions?
    7. Which accounting software integrations are available?
    8. How is my deposit insured?
    9. What support channels are available?
    10. What documents do I need to open the account?

    Write down the answers and compare them side by side.

    Matching Accounts to Business Types

    Freelancers and Service Businesses

    Often value low fees, easy transfers, invoicing integration and good mobile apps.

    Retail and Cash Businesses

    Often need convenient cash deposits and merchant services.

    Growing Businesses

    May value lending relationships, multiple users and treasury features.

    Reviewing Your Account Over Time

    As your business grows, your banking needs may change. Review fees and features annually, and consider whether a different account type or bank better fits your current activity.

    Business Banking Checklist

    • Business checking account opened
    • Savings account for taxes or emergencies considered
    • Accounting software connected
    • Business card used for business expenses
    • Two-factor authentication and alerts enabled
    • Users and permissions set
    • Fees reviewed against activity
    • Deposit insurance confirmed

    Business Credit Cards

    A business credit card can help separate expenses and simplify tracking. Compare fees, interest rates and features carefully, and pay balances on time. Ask a financial professional whether a business card fits your situation.

    Keeping Accounts Secure

    Business accounts can be targets for fraud. Use strong, unique passwords stored in a password manager, enable two-factor authentication, set alerts for large transactions and verify payment change requests directly with vendors before sending money. Train anyone with account access to recognize phishing attempts.

    Opening the Account

    Once you have chosen a bank, gather your documents, complete the application and fund the account. Then connect it to your accounting software, set up alerts, order cards if needed and update your invoices and payment details so clients pay into the new account. Notify any existing clients and vendors of the change and confirm the first few payments arrive correctly. Keep your old personal account separate from business activity from that point on.

    A Note on Changing Banks

    Switching banks later is possible but takes coordination. Keep the old account open until all recurring payments, deposits and integrations have moved, then close it once nothing new arrives.

    Frequently Asked Questions

    Do sole proprietors need a business account?

    It is often recommended for cleaner records. Ask a professional.

    Can I open an account online?

    Many banks offer online applications.

    What documents do I need?

    Commonly ID, EIN or SSN and formation documents.

    Are online banks safe?

    Check deposit insurance and how accounts are held.

    Should I have a business savings account?

    Many owners use one for taxes and emergencies.

    The Bottom Line

    A business bank account separates finances, simplifies bookkeeping and supports professional operations. Compare fees, features, cash needs and integrations, and confirm requirements with banks and professionals.

    Editorial note: Biz Benchly is independent and reader-supported. This guide is based on research into manufacturer documentation, published specifications and widely accepted best practices; we have not been paid to mention any product. If we add affiliate links in the future, they will be clearly disclosed per our Affiliate Disclosure.

  • Small-Business Collaboration Tools: Chat, Video, Docs and File Sharing

    Small-Business Collaboration Tools: Chat, Video, Docs and File Sharing

    Small teams need to communicate quickly, share files and work on documents together, whether in the same office or across time zones. Collaboration tools make this possible, but too many tools can create confusion. The goal is a simple, connected stack that everyone uses.

    This guide covers the main categories of collaboration tools and how to choose them. Check current features and pricing for any specific product.

    Categories of Collaboration Tools

    Team Chat

    Chat tools organize conversations into channels and direct messages, reducing internal email.

    Look for: Channels, threads, search, file sharing, integrations, guest access and mobile apps.

    Video Meetings

    Video tools support meetings, screen sharing and recording.

    Look for: Meeting length limits on free plans, participant limits, recording, calendar integration and security features.

    Shared Documents and Spreadsheets

    Cloud document tools let teams edit together in real time.

    Look for: Real-time editing, comments, version history and sharing controls.

    File Storage and Sharing

    Cloud storage keeps files accessible and backed up.

    Look for: Storage limits, sharing permissions, sync, version history and admin controls.

    Project Management

    Track tasks and projects. See project management tools compared.

    Knowledge Bases and Wikis

    Wikis store processes and documentation so knowledge is not lost when someone is unavailable.

    Password Managers

    Business password managers let teams share credentials securely rather than through chat or spreadsheets. Look for shared vaults, permissions and two-factor authentication.

    Suites vs. Best-of-Breed

    Productivity Suites

    Suites bundle email, calendar, documents, storage, chat and video.

    Pros: One login, integrated tools, simpler billing.
    Cons: Individual tools may be less specialized.

    Best-of-Breed Tools

    Separate tools for each function.

    Pros: Specialized features.
    Cons: More logins, subscriptions and integrations.

    Many small businesses start with a suite and add specialized tools as needed.

    Choosing Tools

    Step 1: Audit Current Tools

    List the tools your team uses, including free personal accounts. Identify overlaps and gaps.

    Step 2: Define Needs

    Consider team size, remote work, client collaboration and security requirements.

    Step 3: Prioritize Integration

    Tools that connect reduce copy-and-paste work.

    Step 4: Test With the Team

    Trial tools with real work and gather feedback.

    Step 5: Standardize

    Pick one tool per function and document how to use it.

    Security Considerations

    • Use business accounts rather than personal accounts for business data
    • Enable two-factor authentication
    • Manage permissions so people only access what they need
    • Offboard properly by removing access when people leave
    • Back up important data

    Pricing Considerations

    • Per-user pricing adds up
    • Free plans often limit storage, history or meeting length
    • Guest users may be free or paid
    • Annual billing often reduces costs

    Calculate the total monthly cost of your stack.

    Communication Guidelines

    Tools work best with clear norms:

    • Which tool for which type of communication
    • Expected response times
    • When to use meetings vs. chat vs. documents
    • Naming conventions for channels and files

    Documenting these norms helps new hires. See our hiring your first employee checklist.

    Working With Clients

    Guest access, shared folders and client portals help collaborate with clients. Set clear permissions and keep client data separate.

    Common Mistakes

    • Using too many overlapping tools
    • Letting employees use personal accounts for business
    • Ignoring offboarding
    • Not setting communication norms
    • Skipping two-factor authentication

    Building a Starter Stack

    A simple starter stack for a small team might include:

    • One productivity suite for email, calendar, documents and storage
    • One chat tool if the suite’s chat does not fit
    • One video tool if not included in the suite
    • One project management tool
    • One password manager

    That covers most needs. Add specialized tools only when a clear gap appears.

    Onboarding and Offboarding Checklists

    Onboarding

    • Create accounts in each tool
    • Add the person to the right channels, folders and projects
    • Share communication norms
    • Enable two-factor authentication

    Offboarding

    • Remove access to all tools
    • Transfer ownership of files and projects
    • Change shared passwords
    • Recover company devices

    Keeping a list of every tool and who has access makes offboarding much easier.

    Reviewing Your Stack

    Once or twice a year, review subscriptions, usage and costs. Cancel unused tools, consolidate overlaps and check that security settings are still appropriate.

    Collaboration Tool Checklist

    • One tool chosen per function
    • Business accounts for all team members
    • Two-factor authentication enabled
    • Permissions reviewed
    • Communication norms documented
    • Onboarding and offboarding checklists in place
    • Shared passwords stored in a password manager
    • Important data backed up
    • Subscriptions reviewed periodically

    Remote and Hybrid Teams

    Remote and hybrid teams rely heavily on collaboration tools. Asynchronous communication through documents and threads helps across time zones. Recorded meetings and written summaries let people catch up. Clear norms about availability and response times reduce pressure to be online constantly.

    Keeping Meetings Useful

    Video meetings are easy to schedule and easy to overuse. Share agendas in advance, keep meetings short, record decisions in a shared document and consider whether a written update could replace a meeting entirely.

    Starting Small

    If your team is just getting started, choose a suite that covers email, documents, storage and video, add a password manager and a simple project management tool, and write down a few communication norms. That foundation handles a surprising amount of work. Revisit it as the team grows rather than adding tools in anticipation of needs that may never arrive. Ask the team periodically which tools help and which add friction.

    A Note on Data Ownership

    When a team relies on cloud tools, make sure the business, not an individual, owns the accounts and files. Keep admin access with at least two trusted people so you are never locked out.

    Frequently Asked Questions

    What collaboration tools does a small business need?

    Typically chat, video, documents, storage and project management.

    Should I use a suite?

    Suites simplify management; best-of-breed tools offer specialized features.

    Are free plans enough?

    For very small teams, sometimes. Check limits.

    How do I share passwords safely?

    Use a business password manager.

    How do I reduce tool overload?

    Audit tools, pick one per function and set norms.

    The Bottom Line

    Collaboration tools help small teams communicate and share work. Choose a simple, connected stack, prioritize security, set communication norms and review tools periodically.

    Editorial note: Biz Benchly is independent and reader-supported. This guide is based on research into manufacturer documentation, published specifications and widely accepted best practices; we have not been paid to mention any product. If we add affiliate links in the future, they will be clearly disclosed per our Affiliate Disclosure.

  • Email Marketing Tools Guide for Small Businesses

    Email Marketing Tools Guide for Small Businesses

    Email marketing remains one of the most direct ways for small businesses to reach customers. Unlike social media, you own your email list, and messages reach subscribers’ inboxes rather than depending on algorithms. An email marketing tool makes it practical to build lists, send campaigns and automate messages.

    This guide covers features and selection criteria. We do not rank specific providers or list prices. Check current plans and terms.

    What Email Marketing Tools Do

    • Build lists with signup forms and imports
    • Design emails with templates and editors
    • Send campaigns to subscribers
    • Automate emails such as welcome series
    • Segment audiences
    • Track performance
    • Manage unsubscribes and compliance

    Key Features

    Signup Forms and Landing Pages

    Embed forms on your website or create landing pages. Look for customizable forms and double opt-in options.

    Templates and Editors

    Drag-and-drop editors make it easy to create emails. Mobile-friendly templates are essential.

    Automation

    Automations send emails based on triggers, such as signups or purchases. Common automations include welcome series, follow-ups and re-engagement emails.

    Segmentation

    Segments let you send relevant messages to specific groups based on interests, behavior or location.

    Personalization

    Personalization inserts names or other details.

    Analytics

    Reports show opens, clicks, unsubscribes and bounces. Note that open tracking has become less reliable due to privacy features in some email apps, so clicks and conversions are often more useful.

    A/B Testing

    Test subject lines or content.

    Deliverability Support

    Deliverability determines whether emails reach inboxes. Providers help with authentication such as SPF, DKIM and DMARC. Set these up for your domain.

    Pricing Models

    • Subscriber-based pricing charges by list size
    • Send-based pricing charges by number of emails sent
    • Free tiers often limit subscribers, sends or features
    • Feature tiers reserve automation or segmentation

    Calculate cost for your current list and growth.

    Compliance Basics

    Email marketing laws vary by country. In the United States, the CAN-SPAM Act sets rules for commercial email. Other regions have different requirements, some requiring explicit consent. Common practices include:

    • Getting permission before emailing
    • Including a clear unsubscribe option
    • Including a physical mailing address where required
    • Honoring unsubscribe requests promptly
    • Using accurate subject lines and sender information

    This is general information. Check official guidance and consult a professional.

    Integrations

    Connect your email tool with:

    Choosing a Tool

    Step 1: Define Goals

    Newsletters, promotions, onboarding or customer retention?

    Step 2: List Must-Have Features

    Automation, segmentation, landing pages, e-commerce integration?

    Step 3: Compare Pricing

    Model costs at your list size.

    Step 4: Test Editors

    Try free plans or trials.

    Step 5: Check Deliverability Support

    Look for authentication guidance and support.

    Building Your List

    • Offer value, such as useful content or updates
    • Place signup forms where visitors see them
    • Avoid buying lists, which can harm deliverability and may violate rules
    • Keep the list clean by removing inactive subscribers periodically

    Writing Effective Emails

    • Write clear subject lines
    • Keep content focused
    • Include a clear call to action
    • Test on mobile
    • Send consistently

    Common Mistakes

    • Buying email lists
    • Ignoring authentication
    • Sending without permission
    • Overwhelming subscribers with frequent emails
    • Not segmenting

    Planning an Email Calendar

    Consistency helps subscribers know what to expect. A simple email calendar might include:

    • A regular newsletter on a set schedule
    • Seasonal promotions for relevant dates
    • Automated welcome emails for new subscribers
    • Product or service announcements

    Plan content in advance using a shared document or project management tool. See project management tools compared.

    Welcome Series Basics

    A welcome series is often the first automation businesses set up. It might include:

    1. A thank-you email confirming the signup and setting expectations
    2. An introduction to your business and what makes it useful
    3. Helpful resources or popular content
    4. An invitation to take a next step, such as booking a call or browsing products

    Keep emails short and focused, and let subscribers easily update preferences or unsubscribe.

    Measuring What Matters

    Focus on metrics tied to your goals, such as clicks, replies, bookings or purchases, rather than only open rates. Track list growth and unsubscribe rates over time. If unsubscribes spike, review frequency and content.

    Choosing a Sender Name and Address

    Use a recognizable sender name, such as your business name or a person’s name at the business. Send from an address on your own domain rather than a free email address, which helps with authentication and trust. Make sure replies go to an inbox someone checks.

    Cleaning Your List

    Over time, some subscribers stop engaging. Periodically sending a re-engagement email and then removing people who do not respond can improve deliverability and reduce costs on subscriber-based pricing. Remove hard bounces promptly.

    Email Marketing Checklist

    • Signup forms on your website
    • Double opt-in considered
    • Domain authentication set up
    • Welcome series created
    • Mobile-friendly templates
    • Clear unsubscribe option
    • Physical address where required
    • Segments defined
    • Regular sending schedule
    • Metrics tied to goals

    Starting Small

    You do not need an elaborate program on day one. A signup form, a short welcome email and a simple monthly newsletter are a solid start. Add segmentation and automation as you learn what your subscribers respond to. Consistent, useful emails tend to build trust more than frequent promotional messages, and a steady schedule makes the habit easier to maintain.

    A Note on Testing

    Before sending a campaign to your whole list, send a test to yourself and a colleague. Check links, images, the subject line and how the email looks on a phone and a desktop.

    Frequently Asked Questions

    Which email marketing tool is best?

    It depends on goals, features and budget. Test a few.

    Are free plans good enough?

    For small lists, often yes.

    What is deliverability?

    Whether emails reach inboxes rather than spam folders.

    Do I need permission to email people?

    Generally, yes. Check rules that apply to you.

    Should I buy an email list?

    No. It can harm deliverability and may violate rules.

    The Bottom Line

    Email marketing tools help small businesses build lists, send campaigns and automate messages. Choose features that fit your goals, compare pricing at your list size, set up authentication and follow compliance basics.

    Editorial note: Biz Benchly is independent and reader-supported. This guide is based on research into manufacturer documentation, published specifications and widely accepted best practices; we have not been paid to mention any product. If we add affiliate links in the future, they will be clearly disclosed per our Affiliate Disclosure.

  • Hiring Your First Employee: A Small-Business Checklist

    Hiring Your First Employee: A Small-Business Checklist

    Hiring your first employee is a milestone. It also brings new responsibilities, including payroll, taxes, paperwork and compliance. Getting organized before your first hire makes the process smoother.

    Important: This checklist is general information for U.S. businesses. It is not legal, tax or HR advice. Requirements vary by state and locality and change over time. Use official government resources and consult qualified professionals.

    Before You Hire

    Define the Role

    Write a clear job description, including responsibilities, schedule, location and compensation. Consider whether the role is full-time, part-time or temporary.

    Confirm Worker Classification

    Determine whether the worker is an employee or an independent contractor. Classification depends on factors defined by law, not on what you call the role. Misclassification can lead to penalties. See our guide to paying contractors and consult a professional if unsure.

    Budget for Total Cost

    The cost of an employee includes wages plus employer taxes, any benefits, insurance, equipment and payroll software. Plan your budget accordingly.

    Registrations and Accounts

    Employer Identification Number

    Employers typically need an EIN from the IRS. If you formed an LLC, you may already have one. See how to start an LLC.

    State Registrations

    Many states require employers to register for state payroll tax accounts, such as withholding and unemployment insurance. Check your state’s official resources.

    Workers’ Compensation Insurance

    Most states require workers’ compensation insurance for employees, with rules varying by state. Check requirements.

    Local Requirements

    Some cities and counties have additional requirements.

    Payroll Setup

    Choose a Payroll Solution

    Payroll software calculates pay and withholding, pays employees and often files payroll taxes. See Gusto vs. ADP.

    Set a Pay Schedule

    States may have rules about pay frequency. Check your state’s requirements.

    Understand Withholding

    Payroll involves withholding certain taxes from employee pay and paying employer taxes. Payroll providers handle calculations, but understand the basics.

    Hiring Paperwork

    Common paperwork for new U.S. employees includes:

    • Form W-4 for federal income tax withholding
    • Form I-9 for employment eligibility verification
    • State withholding forms where applicable
    • New hire reporting to the state, typically required within a set time
    • Direct deposit authorization

    Check official sources for current forms and deadlines.

    Workplace Posters and Notices

    Employers are often required to display certain federal and state labor law notices. Check official resources for requirements, including options for remote employees.

    Policies and Documentation

    • Offer letter outlining role, pay and start date
    • Employee handbook or written policies
    • Time tracking for non-exempt employees
    • Confidentiality agreements where appropriate

    An employment attorney can help with documents.

    Benefits

    Consider whether to offer benefits such as health insurance, retirement plans and paid time off. Some benefits may be required in certain states or cities. Payroll providers often offer benefits administration.

    Onboarding

    A good onboarding process helps your new employee succeed:

    • Prepare equipment and accounts before day one
    • Provide training and introductions
    • Set clear expectations and goals
    • Schedule regular check-ins

    Tools can help. See project management tools compared and small-business collaboration tools.

    Record Keeping

    Employers must keep certain payroll and employment records for set periods. Store records securely and check requirements.

    Ongoing Responsibilities

    • Run payroll accurately and on time
    • File and pay payroll taxes
    • Provide year-end forms
    • Keep records
    • Stay informed about changes in laws

    Common Mistakes

    • Misclassifying workers
    • Missing state registrations
    • Forgetting new hire reporting
    • Not completing Form I-9 on time
    • Skipping workers’ compensation insurance

    Planning the First Weeks

    A simple plan for the first few weeks helps new employees settle in:

    Before Day One

    • Send a welcome message with start time, location and what to bring
    • Set up email, software accounts and equipment
    • Prepare required paperwork

    Day One

    • Complete paperwork
    • Provide a tour or virtual introduction
    • Review the role, goals and schedule

    First Week

    • Provide training on tools and processes
    • Assign a first project
    • Schedule check-ins

    First Month

    • Review progress and gather feedback
    • Adjust training as needed

    Protecting Employee Data

    Employee records contain sensitive information such as Social Security numbers and bank details. Store records securely, limit access and use payroll and HR tools with strong security features. Avoid sending sensitive information by unsecured email.

    Budgeting Time for Administration

    Payroll, HR and compliance take time each pay period and each year. Payroll software reduces this work, but plan for time to review payroll, answer questions and keep records current.

    First Hire Checklist

    • Role defined and job description written
    • Worker classification confirmed
    • Budget for total cost prepared
    • EIN obtained
    • State payroll tax accounts registered
    • Workers’ compensation insurance in place where required
    • Payroll solution chosen and set up
    • Pay schedule set
    • Offer letter prepared
    • Form W-4, Form I-9 and state forms ready
    • New hire reporting completed
    • Required notices posted or provided
    • Onboarding plan ready
    • Record keeping system set up

    Where to Find Official Information

    The IRS, the U.S. Department of Labor, U.S. Citizenship and Immigration Services and your state labor and tax agencies publish resources for employers. The U.S. Small Business Administration also offers guidance for new employers. Use these official sources to confirm current requirements.

    Getting Help

    Many first-time employers work with a payroll provider, an accountant and, where needed, an employment attorney. These professionals can help you set up correctly from the start, which is usually easier than fixing problems later. Ask them which registrations and filings apply to your state and city, and keep a written list of recurring deadlines.

    Frequently Asked Questions

    What do I need before hiring my first employee?

    Typically an EIN, state registrations, workers’ compensation insurance where required and a payroll solution.

    How do I know if someone is an employee or contractor?

    Classification depends on legal factors. Consult official guidance or a professional.

    Do I need payroll software?

    It simplifies payroll and tax filing significantly.

    What forms do new employees fill out?

    Commonly Form W-4, Form I-9 and state forms.

    Do I need an employee handbook?

    Not always required, but helpful.

    The Bottom Line

    Hiring your first employee involves classification, registrations, insurance, payroll setup, paperwork and onboarding. Use official resources and qualified professionals to confirm requirements for your state.

    Editorial note: Biz Benchly is independent and reader-supported. This guide is based on research into manufacturer documentation, published specifications and widely accepted best practices; we have not been paid to mention any product. If we add affiliate links in the future, they will be clearly disclosed per our Affiliate Disclosure.

  • Expense Tracking Apps Guide: Receipts, Mileage and Reimbursements

    Expense Tracking Apps Guide: Receipts, Mileage and Reimbursements

    Expenses are easy to lose track of. A coffee with a client, a software subscription, a parking fee, a box of supplies: individually small, collectively significant. Expense tracking apps capture these costs, organize them and send them to your books so you have accurate records.

    This guide explains what expense tracking apps do and how to choose one. It is general information, not tax or accounting advice. Rules about deductible expenses and record keeping vary, so consult a qualified professional.

    What Expense Tracking Apps Do

    • Capture receipts by photo, email forwarding or upload
    • Extract details such as date, vendor and amount
    • Import transactions from bank and card accounts
    • Categorize expenses
    • Track mileage
    • Manage reimbursements for employees
    • Export or sync to accounting software

    Some apps are standalone; others are built into accounting or corporate card platforms.

    Key Features

    Receipt Capture

    Snap a photo of a receipt and the app reads the details. Accuracy varies, so review extracted data. Email forwarding is useful for digital receipts.

    Bank and Card Feeds

    Connecting accounts imports transactions automatically. Matching receipts to transactions keeps records complete.

    Categorization Rules

    Rules automatically categorize recurring expenses, such as a monthly software subscription.

    Mileage Tracking

    Some apps track mileage using GPS or manual entry. Mileage records matter if you use a vehicle for business. Check official guidance for record requirements.

    Reimbursements and Approvals

    For teams, apps let employees submit expenses, managers approve them and finance reimburse them. Approval workflows reduce errors.

    Policy Controls

    Some apps flag expenses that exceed limits or lack receipts.

    Multi-Currency

    Travelers benefit from multi-currency support.

    Reports

    Reports summarize expenses by category, project, client or employee.

    Integrations

    Expense apps should connect with your accounting software. See bookkeeping basics for small business. Some integrate with payroll for reimbursements. See Gusto vs. ADP.

    Billable expenses can flow to invoices. See invoicing software for freelancers.

    Choosing an App

    For Freelancers and Solo Owners

    Look for simple receipt capture, bank feeds, mileage tracking and accounting integration. Built-in features of accounting software may be enough.

    For Small Teams

    Look for multi-user support, approvals, reimbursements and policy controls.

    Pricing Considerations

    • Free tiers may limit receipts or users
    • Per-user pricing scales with team size
    • Features such as approvals may require higher tiers
    • Some corporate card platforms include expense tools

    Check current pricing and terms.

    Good Expense Habits

    Capture Immediately

    Snap receipts right away rather than collecting them in a pocket.

    Add Notes

    Note the business purpose, especially for meals and travel.

    Review Weekly

    Categorize and match receipts weekly.

    Separate Personal and Business

    Use business accounts for business expenses. See our business bank account guide.

    Keep Records

    Check how long records should be kept for your situation.

    Security

    Expense apps connect to financial accounts. Use two-factor authentication, review permissions and choose providers with clear security and privacy policies.

    Common Mistakes

    • Losing paper receipts
    • Not noting business purpose
    • Relying on automated extraction without review
    • Letting receipts pile up
    • Mixing personal and business expenses

    Setting Up an Expense Policy

    Even small teams benefit from a written expense policy. A simple policy might cover:

    • What is reimbursable, such as travel, client meals or supplies
    • Spending limits for common categories
    • Receipt requirements
    • Submission deadlines, such as within a set number of days
    • Approval process
    • Reimbursement timing

    Sharing the policy in writing reduces confusion. Expense apps can enforce parts of the policy automatically by flagging missing receipts or out-of-policy expenses.

    Business Cards and Spending Controls

    Some businesses issue cards to employees with spending limits. Corporate card platforms often include expense tracking, receipt capture and controls such as merchant restrictions. Compare these with standalone expense apps based on your team’s needs.

    Mileage Records

    If you use a personal vehicle for business, mileage records matter. Records commonly include date, destination, business purpose and miles driven. Apps can automate much of this. Check current official guidance on mileage rates and record requirements, and ask a tax professional how they apply to you.

    Preparing for Tax Time

    Organized expense records make tax preparation faster. Before meeting your accountant, review categories, make sure receipts are attached and export reports.

    Expense Categories to Consider

    Common small-business expense categories include:

    • Software and subscriptions
    • Advertising and marketing
    • Office supplies
    • Travel
    • Meals
    • Professional services
    • Equipment
    • Rent and utilities
    • Insurance
    • Vehicle expenses

    Use categories consistently and align them with your accounting software’s chart of accounts. An accountant can help you choose categories that match your reporting and tax needs.

    Reviewing Subscriptions

    Software subscriptions are easy to forget. Expense reports by vendor reveal recurring charges, making it easier to cancel unused tools. A quarterly subscription review can free up budget for tools you actually use.

    Expense App Checklist

    • Receipt capture by photo and email
    • Bank and card feeds
    • Categorization rules
    • Mileage tracking if needed
    • Approvals for teams
    • Accounting integration
    • Two-factor authentication
    • Data export

    Starting Simple

    If you are new to expense tracking, start with three habits: use a business account for business spending, photograph every receipt the same day and review transactions once a week. Add mileage tracking, policies and approvals as your business and team grow. An app is only as useful as the habits around it, so choose one that fits easily into your routine and is quick to open on your phone.

    A Note on Accuracy

    Automated receipt reading saves time but is not perfect. Spot-check totals, dates and vendors, especially on faded paper receipts or foreign-currency purchases, and correct errors before they reach your books.

    Frequently Asked Questions

    Do I need a separate expense app?

    Not always. Accounting software may include expense features.

    Are photos of receipts acceptable?

    Often, but check guidance for your situation.

    Can apps track mileage?

    Many can, using GPS or manual entry.

    How do reimbursements work?

    Employees submit expenses, managers approve and finance pays.

    How often should I review expenses?

    Weekly is a good habit.

    The Bottom Line

    Expense tracking apps capture receipts, import transactions, categorize expenses and sync with accounting software. Choose features that match your size, build good habits and consult professionals about record keeping and deductions.

    Editorial note: Biz Benchly is independent and reader-supported. This guide is based on research into manufacturer documentation, published specifications and widely accepted best practices; we have not been paid to mention any product. If we add affiliate links in the future, they will be clearly disclosed per our Affiliate Disclosure.

  • Bookkeeping Basics for Small Business Owners

    Bookkeeping Basics for Small Business Owners

    Bookkeeping is the process of recording and organizing your business’s financial transactions. It is not glamorous, but it is essential. Good books help you understand profitability, prepare for taxes, make decisions and avoid surprises.

    This guide covers bookkeeping basics. It is general information, not accounting or tax advice. Consult a qualified accountant or bookkeeper for your situation.

    Why Bookkeeping Matters

    • Know your numbers: Understand income, expenses and profit
    • Prepare for taxes: Organized records make tax time easier
    • Make decisions: Pricing, hiring and investment decisions depend on accurate data
    • Support financing: Lenders often ask for financial statements
    • Reduce risk: Catch errors and fraud early

    Separate Business and Personal Finances

    Use a dedicated business bank account and, if appropriate, a business credit card. Mixing finances makes bookkeeping harder. See our business bank account guide.

    Key Concepts

    Income and Expenses

    Income is money earned. Expenses are costs of running the business.

    Assets, Liabilities and Equity

    Assets are what the business owns. Liabilities are what it owes. Equity is the owner’s stake.

    Cash vs. Accrual Accounting

    • Cash basis records income when received and expenses when paid
    • Accrual basis records income when earned and expenses when incurred

    Many small businesses use cash basis, but requirements vary. Ask an accountant which method fits.

    Single-Entry vs. Double-Entry

    Double-entry bookkeeping records each transaction in two accounts, helping catch errors. Most accounting software uses double-entry behind the scenes.

    Chart of Accounts

    A chart of accounts lists categories for transactions, such as sales, advertising, software, rent and supplies. Accounting software provides default charts you can customize. Keep categories consistent.

    Recording Transactions

    Record every transaction, including:

    • Sales and payments received
    • Expenses and bills paid
    • Transfers between accounts
    • Owner contributions and draws
    • Loan payments

    Accounting software with bank feeds imports transactions automatically for you to categorize.

    Receipts and Documentation

    Keep receipts and invoices. Digital copies are often acceptable, but check guidance for your situation. Expense tracking apps can capture receipts. See our expense tracking apps guide.

    Reconciliation

    Reconciliation compares your books to bank and credit card statements to ensure they match. Reconcile monthly at minimum.

    Accounts Receivable and Payable

    • Accounts receivable is money owed to you. Track invoices and follow up. See invoicing software for freelancers.
    • Accounts payable is money you owe. Track bills and due dates.

    Financial Reports

    Profit and Loss Statement

    Shows income, expenses and profit over a period.

    Balance Sheet

    Shows assets, liabilities and equity at a point in time.

    Cash Flow Statement

    Shows how cash moves in and out.

    Review reports monthly.

    Bookkeeping Software

    Accounting software automates many tasks. Features to look for:

    • Bank feeds
    • Invoicing
    • Expense tracking
    • Reports
    • Integrations with payroll and other tools
    • Accountant access

    Compare current plans and features.

    A Simple Bookkeeping Routine

    Weekly

    • Categorize transactions
    • Upload receipts
    • Send invoices and follow up on overdue ones

    Monthly

    • Reconcile accounts
    • Review reports
    • Pay bills

    Quarterly

    • Review estimated tax obligations with a professional
    • Review profitability

    Annually

    • Prepare for tax filing
    • Review the chart of accounts

    DIY vs. Hiring Help

    Many owners start with DIY bookkeeping. As the business grows, a bookkeeper or accountant can save time and reduce errors. Consider help when:

    • You spend significant time on bookkeeping
    • Transactions are complex
    • You have employees. See Gusto vs. ADP.
    • You are unsure about tax obligations

    Common Mistakes

    • Mixing personal and business finances
    • Falling behind on categorizing
    • Not reconciling
    • Losing receipts
    • Ignoring reports

    Understanding Your Profit and Loss Statement

    The profit and loss statement is often the report owners look at most. It typically shows:

    • Revenue from sales or services
    • Cost of goods sold for businesses that sell products
    • Gross profit
    • Operating expenses such as rent, software and marketing
    • Net profit

    Compare months and years to spot trends. Rising expenses in a category may signal an opportunity to cut costs, while seasonal revenue patterns can inform cash planning.

    Cash Flow vs. Profit

    A business can be profitable on paper but short on cash, for example when clients pay slowly. Tracking accounts receivable and planning for upcoming bills helps manage cash flow. Invoicing tools with reminders can shorten the time between finishing work and getting paid.

    Working With an Accountant

    Even if you do your own bookkeeping, an accountant can review your books periodically, help with tax planning and answer questions. Giving your accountant access to your accounting software can make collaboration easier. Ask what records they need and when.

    Bookkeeping Checklist

    • Business bank account open and connected to software
    • Chart of accounts reviewed and customized
    • Transactions categorized weekly
    • Receipts captured and attached
    • Accounts reconciled monthly
    • Invoices sent promptly and overdue ones followed up
    • Bills tracked and paid on time
    • Reports reviewed monthly
    • Tax deadlines on the calendar
    • Records backed up

    Catching Up on Bookkeeping

    If you have fallen behind, start with the most recent month and work backward, or hire a bookkeeper to catch up. Gather bank statements, receipts and invoices, then categorize and reconcile month by month. Once caught up, a weekly routine prevents the backlog from returning. It can also help to set a recurring calendar reminder for bookkeeping time.

    Keeping Bookkeeping Manageable

    Bookkeeping feels overwhelming mostly when it piles up. Short, regular sessions keep the work manageable and give you an up-to-date view of the business. Treat bookkeeping time like a client appointment that you do not cancel.

    Frequently Asked Questions

    What is the difference between bookkeeping and accounting?

    Bookkeeping records transactions; accounting interprets and reports on them.

    Do I need accounting software?

    It is very helpful for most businesses.

    How often should I do bookkeeping?

    Weekly categorizing and monthly reconciliation are common routines.

    Cash or accrual?

    Ask an accountant which fits your business.

    When should I hire a bookkeeper?

    When bookkeeping takes too much time or becomes complex.

    The Bottom Line

    Good bookkeeping helps you understand your business, prepare for taxes and make decisions. Separate finances, record and categorize transactions, keep receipts, reconcile monthly and review reports. Consult qualified professionals for accounting and tax questions.

    Editorial note: Biz Benchly is independent and reader-supported. This guide is based on research into manufacturer documentation, published specifications and widely accepted best practices; we have not been paid to mention any product. If we add affiliate links in the future, they will be clearly disclosed per our Affiliate Disclosure.

  • How to Start an LLC: A General Step-by-Step Process Overview

    How to Start an LLC: A General Step-by-Step Process Overview

    A limited liability company (LLC) is a common business structure in the United States. Many small-business owners and freelancers consider forming one. The process varies by state, but the general steps are similar.

    Important: This article is a general overview of the typical process. It is not legal, tax or financial advice. Requirements, fees and rules vary by state and change over time. Whether an LLC is right for you depends on your circumstances. Consult a qualified attorney, accountant or your state’s official business resources before making decisions.

    What Is an LLC?

    An LLC is a business entity created under state law. It is commonly described as combining some features of corporations and partnerships. The specific legal and tax implications depend on your situation and state, which is why professional advice is important.

    Typical Steps to Form an LLC

    Step 1: Choose a State

    Many businesses form in the state where they operate. Some consider other states, but forming elsewhere can create additional requirements. A professional can help you decide.

    Step 2: Choose a Name

    States typically require that an LLC name:

    • Be distinguishable from other registered businesses in the state
    • Include a designator such as “LLC” or “Limited Liability Company”
    • Avoid restricted words without approval

    Most states offer an online business name search. You may also want to check domain name availability and trademarks. Some states allow you to reserve a name for a period of time.

    Step 3: Appoint a Registered Agent

    A registered agent receives official legal and government documents on behalf of the LLC. States have requirements for registered agents, such as having a physical address in the state. Some owners serve as their own agent; others use a registered agent service.

    Step 4: File Formation Documents

    You typically file a document often called Articles of Organization or a Certificate of Formation with the state, usually through the secretary of state or a similar office. These documents often include:

    • LLC name
    • Registered agent information
    • Business address
    • Management structure
    • Organizer information

    States charge filing fees, which vary. Check your state’s official website for current fees and forms.

    Step 5: Create an Operating Agreement

    An operating agreement describes how the LLC will be run, including ownership, management, voting and what happens if a member leaves. Some states require one; even where not required, many professionals recommend having one. An attorney can help draft it.

    Step 6: Obtain an EIN

    An Employer Identification Number (EIN) is issued by the IRS and is used for tax purposes. Many LLCs obtain one, especially if they have employees or multiple members. You can apply through the official IRS website. Be cautious of third-party sites that charge fees for services the IRS provides free.

    Step 7: Open a Business Bank Account

    Keeping business and personal finances separate is important. See our business bank account guide.

    Step 8: Obtain Licenses and Permits

    Depending on your business type and location, you may need business licenses or permits at the state, county or city level. Check with local and state agencies.

    Step 9: Understand Ongoing Requirements

    Many states require periodic reports and fees to keep the LLC in good standing. Other ongoing obligations may include tax filings and maintaining a registered agent. Mark deadlines on your calendar.

    Tax Considerations

    LLC taxation can be complex and depends on how the LLC is classified and on your circumstances. A qualified tax professional can explain options and obligations.

    Setting Up Business Systems

    Once your LLC is formed, set up systems to run it:

    DIY vs. Formation Services vs. Attorneys

    DIY

    Filing yourself through the state website can be straightforward. You handle forms and deadlines.

    Formation Services

    Online services file on your behalf for a fee and may offer registered agent services. Compare what is included.

    Attorneys

    Attorneys provide legal advice tailored to your situation and can draft operating agreements.

    Common Mistakes

    • Skipping research into state requirements
    • Mixing personal and business finances
    • Missing annual report deadlines
    • Not having an operating agreement
    • Assuming an LLC is right without professional advice

    Using Official Resources

    Every state has an office, often the secretary of state, that handles business filings. Official state websites usually provide:

    • Name search tools
    • Formation forms and online filing
    • Current filing fees
    • Annual report requirements
    • Contact information for questions

    The U.S. Small Business Administration and the IRS also publish free resources for new business owners. Start with official sources before paying for third-party services, and be cautious of mailings that look official but come from private companies offering paid compliance services.

    Keeping Good Records

    Keep copies of formation documents, your operating agreement, EIN confirmation, licenses and annual report filings in a secure place. Many owners keep both digital and paper copies. These documents are often requested when opening bank accounts, applying for loans or working with professionals.

    After Formation: A First-Month Checklist

    • Store formation documents and the operating agreement securely
    • Obtain an EIN if needed
    • Open a business bank account
    • Apply for required licenses and permits
    • Set up bookkeeping
    • Calendar annual report and tax deadlines
    • Review insurance needs with a qualified agent

    Working through this list early helps your new business start on a solid footing.

    Frequently Asked Questions

    How long does it take to form an LLC?

    It varies by state and filing method. Check your state’s processing times.

    How much does it cost?

    Filing fees vary by state. Check official state websites.

    Do I need an attorney?

    Not always, but an attorney can provide advice for your situation.

    Do I need an EIN?

    Many LLCs need one. Check IRS guidance or ask a professional.

    Is an LLC right for me?

    It depends on your circumstances. Consult qualified professionals.

    The Bottom Line

    Forming an LLC typically involves choosing a name, appointing a registered agent, filing formation documents, creating an operating agreement, obtaining an EIN and meeting ongoing requirements. Requirements vary by state, so use official resources and consult qualified professionals.

    Editorial note: Biz Benchly is independent and reader-supported. This guide is based on research into manufacturer documentation, published specifications and widely accepted best practices; we have not been paid to mention any product. If we add affiliate links in the future, they will be clearly disclosed per our Affiliate Disclosure.

  • Project Management Tools Compared: Boards, Lists, Timelines and How to Choose

    Project Management Tools Compared: Boards, Lists, Timelines and How to Choose

    Project management tools help small teams track who is doing what and when. Without one, work lives in email threads, chat messages and memory, and tasks slip through the cracks. With the right tool, everyone can see priorities, deadlines and progress.

    There are many project management tools, and most offer free plans or trials. Rather than ranking specific products, this guide compares the main approaches and features so you can choose what fits your team. Check each provider’s current features and pricing.

    Main Approaches

    Kanban Boards

    Boards display tasks as cards in columns, such as To Do, In Progress and Done.

    Best for: Visual workflows, content production, small teams and simple processes.
    Limitations: Can become cluttered for complex projects with many dependencies.

    Task Lists

    Lists organize tasks with due dates, assignees and subtasks.

    Best for: Straightforward task tracking.
    Limitations: Harder to visualize workflows.

    Timelines and Gantt Charts

    Timelines show tasks across dates with dependencies.

    Best for: Projects with deadlines and dependencies, such as events, launches or client projects.
    Limitations: Require more setup and maintenance.

    All-in-One Workspaces

    Some tools combine tasks, documents, wikis and databases.

    Best for: Teams that want one place for work and knowledge.
    Limitations: Flexible tools can require more setup and discipline.

    Many tools offer several views, letting you switch between boards, lists and timelines.

    Key Features to Compare

    Task Management

    Look for assignees, due dates, priorities, subtasks, comments and attachments.

    Views

    Multiple views let team members work the way they prefer.

    Collaboration

    Comments, mentions and notifications help teams communicate in context.

    Templates

    Templates save time for recurring projects.

    Automation

    Automation can move tasks, assign team members or send reminders based on triggers.

    Integrations

    Check integrations with email, chat, calendars, file storage, CRMs and invoicing tools. See affordable CRM for small business and invoicing software for freelancers.

    Time Tracking

    Some tools include time tracking, which helps with client billing.

    Client Access

    Guest access lets clients view progress or approve work.

    Reporting

    Dashboards show workload and progress.

    Mobile Apps

    Mobile apps help teams stay updated.

    Pricing Considerations

    • Free plans may limit users, projects, storage or features
    • Per-user pricing adds up as teams grow
    • Feature tiers often reserve automation, timelines or advanced reporting
    • Guest users may be free or count as paid users
    • Annual billing often reduces cost

    Calculate total cost for your team and expected growth.

    Choosing the Right Tool

    Step 1: Define Your Workflows

    List the types of projects you manage and how work moves from start to finish.

    Step 2: Identify Must-Have Features

    Separate must-haves from nice-to-haves.

    Step 3: Shortlist and Trial

    Test a few tools with real projects. Involve team members.

    Step 4: Evaluate Adoption

    The best tool is one your team uses. Consider learning curve and ease of use.

    Step 5: Check Integrations and Export

    Make sure the tool connects with your systems and allows data export.

    Implementing a Project Management Tool

    • Start simple with a few projects
    • Set conventions for naming, statuses and due dates
    • Train the team
    • Review regularly and refine
    • Avoid over-engineering with too many fields and automations early

    Project Management for Solo Business Owners

    Freelancers and solo owners can benefit from project management tools to track client work, deadlines and personal tasks. A simple board or list is often enough.

    Pairing With Collaboration Tools

    Project management tools work alongside chat, video and document tools. See our guide to small-business collaboration tools.

    Common Mistakes

    • Choosing the most feature-rich tool regardless of need
    • Not getting team buy-in
    • Creating too many projects and boards
    • Neglecting to update tasks
    • Using multiple tools for the same purpose

    Matching Tools to Team Types

    Creative and Content Teams

    Boards and calendar views help track content from idea to publication. Look for approvals, attachments and comments on files.

    Client Service Businesses

    Agencies and consultants benefit from client access, time tracking and templates for repeatable projects.

    Operations Teams

    Recurring tasks, checklists and automation help with routine work such as monthly reporting or inventory checks.

    Software and Technical Teams

    Technical teams often need issue tracking, sprints and integrations with code repositories.

    Signs It Is Time to Switch

    • Team members avoid the tool and track work elsewhere
    • Important features require workarounds
    • Costs no longer match value
    • The tool cannot handle your project complexity

    Switching tools takes effort, so plan migration carefully and export data before canceling.

    A Quick Comparison Table

    Approach Strengths Watch For
    Kanban boards Visual, simple Clutter at scale
    Task lists Straightforward Limited visualization
    Timelines Deadlines, dependencies Setup effort
    All-in-one Docs and tasks together Learning curve

    Rolling Out a New Tool

    A short rollout plan improves adoption:

    1. Pick one team or project as a pilot
    2. Set up templates and conventions
    3. Run the pilot for a few weeks
    4. Gather feedback and adjust
    5. Expand to the rest of the team

    Keep a short written guide covering where tasks live, how to name them, what each status means and how to request help. New team members can then get up to speed quickly without relying on someone to explain everything verbally.

    Final Thoughts on Fit

    No single project management tool suits every team. The right choice is the one that matches how your team already works, removes friction rather than adding it and is simple enough that updates happen naturally during the workday.

    Frequently Asked Questions

    What is the best project management tool for small businesses?

    It depends on your workflows and team. Try a few with real projects.

    Are free project management tools good enough?

    For small teams, often yes. Check limits.

    Kanban or Gantt?

    Kanban for visual workflows; Gantt for deadlines and dependencies.

    How do I get my team to use it?

    Start simple, train the team and set clear conventions.

    Can project management tools track time?

    Some include time tracking; others integrate with time trackers.

    The Bottom Line

    Project management tools help small teams organize work. Compare approaches, features, pricing and integrations, test with real projects and choose a tool your team will use. Start simple and refine over time.

    Editorial note: Biz Benchly is independent and reader-supported. This guide is based on research into manufacturer documentation, published specifications and widely accepted best practices; we have not been paid to mention any product. If we add affiliate links in the future, they will be clearly disclosed per our Affiliate Disclosure.