Payroll systems like ADP and Paychex are a necessary business evil; they’re difficult to navigate and expensive. Three founders in Silicon Valley have designed a more attractive, cloud-based solution called ZenPayroll and in just eight months, they’ve seen a lot of traction.
The startup has processed over $US100 million for the businesses that use it. Its CEO, Joshua Reeves, won’t reveal how many companies are using ZenPayroll, but he says “thousands of employees are getting paid through it” and that his biggest customer represents less than 2% of that $US100 million milestone.
The majority of companies using ZenPayroll are small businesses with less than 10 employees. Reeves says they include bakeries, venture capitalists, law firms, hotels and churches.
ZenPayroll is backed by some heavy hitters in Silicon Valley, such as Yelp CEO Jeremy Stoppelman, Dropbox CEO, Drew Houston, Yammer founder David Sacks and Box CEO Aaron Levie. They’ve all contributed to a large, $US6 million seed round of financing.
It appeals to small businesses who would rather use spreadsheets and cut checks then use older, complicated payroll systems. ZenPayroll offers small but frustration-saving features like the ability to e-sign documents and automate all payments. The service costs $US25 per month if you have five employees, an extra $US4 for employees number six through 10, and an extra $US2 for every employee thereafter.
Once a business signs up, Reeves says there’s a 10-15 minute setup process. Data never has to be entered more than once (i.e., you’re not filling out the same paperwork or questions about your business multiple times). Bonuses, reimbursements and hours worked can be typed in below an employee’s payroll information for quick, as-needed adjustments (see screenshot below).
ZenPayroll also strives to make the process more fun for employees. Rather than receive a monthly paper statement, ZenPayroll sends emails exclaiming “Cha-ching! You got paid.” All pay stubs are stored in the cloud so employees don’t have to hoard them offline. Once an employee leaves the company, he or she can still access all of the information. Reeves calls this a “lifetime account.”
Reeves was born and raised in San Francisco. He graduated from Stanford with an electrical engineering degree in 2005 then went to work for Zazzle as one of its first 10 employees. Now Zazzle employs 150 people. His other co-founders were running startups of their own, and each had their own frustrations with existing payroll systems.
They built ZenPayroll and participated in Y Combinator’s Winter 2012 accelerator class. Reeves says the founders didn’t pay themselves until they made sure ZenPayroll was a fully functioning system.
“There’s a big shift happening toward delightful, easy-to-use software,” says Reeves. “We look at Square leading that shift. Generally businesses have never gotten the best software out there. We’re trying to bring that shift to payrolls.”
Here’s a screenshot of the ZenPayroll dashboard businesses see: