ZenPayroll aims to unite the SMB back-office, integrates with a dozen other cloud-based systems

By Michael Carney , written on September 3, 2014

From The News Desk

Ever since introducing the world to ZenPayroll’s simple to use and now wildly popular cloud-based payroll software, founder and CEO Josh Reeves has been espousing payroll as the natural center of the back office. “It’s the only system that touches both the people side and the dollar side of the business,” he’s fond of saying.

Today ZenPayroll announced more than a dozen fresh integrations with complementary software platforms that will make this vision a reality. The company has added partners across HR, scheduling, insurance, bookkeeping, expense management, mileage tracking, and other categories.

Today, the list of partners includes QuickBooks, Xero, FreshBooks, TSheets, When I Work, Deputy, NimbleSchedule, BambooHR, Kin HR, inDinero, Insynctive, BayPoint Benefits, Receipt Bank, Zenefits, and SimplyInsured. With additional integrations underway, over the next few weeks this list will grow to include Maxwell Health, Expensify, hCentive, and Employee Navigator.

“Large enterprises have traditionally had a competitive advantage over the small players because only they could afford to acquire and operate the best technology on the market,” says ZenPayroll board member and General Catalyst Managing Partner Hemant Taneja. “Today, modern tools in the cloud are not only easy to use and affordable, but more interoperable than ever, which lowers barriers to entry for entrepreneurs and offers small businesses the edge.”

ZenPayroll wants to be the connector that allows these disparate software platforms and data silos to interoperate. As a result, Reeves hopes that resource scrapped entrepreneurs – be they founders of technology startups or owners of local small businesses – will waste less time on mundane tasks like duplicated data entry and more time growing their businesses. Business owners will soon be able to enter information like hours worked, time off, and expenses reimbursed once and have that data populated across all of their cloud-based back office systems.

“According to a recent survey, nearly a third of Americans find the idea of starting their own company scarier than skydiving,” Reeves says. “We believe technology should allay those fears and empower people to pursue their entrepreneurial dreams. SMB (small- and mid-sized businesses) has never been thought of as a good audience to target. But the driver of our growth has been our customers. They ask us to help them remove manual actions from their daily routine. It’s not just new business owners and first-time entrepreneurs either. We’ve been able to make established entrepreneurs lives’ easier as well.”

ZenPayroll has grown to employ 50 people and is now processing payroll at a $1 billion annual run rate, Reeves says, up from one tenth that figure at this time last year. The Y Combinator alumni company has raised more than $26 million across three funding rounds, from investors that include General Catalyst Partners, Kleiner Perkins Caufield & Byers, AFSquare, Data Collective, Sherpalo Ventures, and individual angels.

But despite this early traction, the fact is that small businesses have far too many software and technology needs for ZenPayroll to address them all on its own. Rather than building scheduling and expense management tools into its payroll platform, the company has gone the route of partnerships. And rather than partner with just one company in each category, and thereby limit the choice of its customers, ZenPayroll looks to partner with any and all companies that it feels meet its standard of delivering a “modern, delightful user experience.” This is not a low bar, however, and access to the ZenPayroll API is restricted on an invite-only basis.

“A lot of what we’ve enabled has never been possible before, but we’ve done a but we've done a lot of work on API side to enable syncing and eliminate redundant data entry,” Reeves says. “We feel like focus is important, and so is understanding what's core to your mission and what's not. Our mission is to automate complexity around payroll and tax compliance and to think about what payroll can be and how that experience can help people feel valued for the work they do. There are lots of great products out there that can be complementary to that mission.”

ZenPayroll’s competition isn’t other modern, nimble software startups, but rather lumbering giants of the legacy, on-premise software world like Intuit, ADP, and Paychex. While each is making overtures toward delivering a more modern user experience, it’s simply not in their DNA to move at the speed or with the customer-mindedness of ZenPayroll, which is built by entrepreneurs, for entrepreneurs. That said, the deep pockets and broad name recognition – though not all of it positive – of these giants makes them formidable competition.

Reeves describes the current crop of aspiring entrepreneurs Generation E. “There’s never been greater disparity between level of interest in entrepreneurship and number of businesses being started,” he says. “We’re making a big bet that technology can help bridge this gap and help these underdogs get an edge. It's a labor of love to build a business and its a privilege and an honor to work with these entrepreneurs.

[Image via HuffPo]