Going to the Cloud: How Web-Based Payroll Helped a Medical Practice Run More Efficiently

A Small Business Success Story Feature - From the Dec. 2012 Issue.

Heidi Blodgett didn’t get a nursing degree so that she could run the business and process payroll for a medical practice, but that’s where her life, career and family took her. Since she and her dermatologist husband Tom opened Blodgett Dermatology in Gallipolis, Ohio, more and more of Heidi’s time has been spent doing business administrative work, particularly bookkeeping and payroll.

The couple initially opened the medical practice in 2005 Chillicothe, Ohio, then moved to Gallipolis in 2007. They are the only dermatology specialists within about 60 miles, so there is a strong need for their services. Heidi noted that the southern Ohio region has a lot of elderly residents, many of them former farmers or laborers who had long-term overexposure to the sun during their lives.

As such, the medical staff at Blodgett Dermatology treats many skin cancers, as well as other issues ranging from eczema and acne, to psoriasis. Prior to opening the medical office, her husband had worked at a large, multi-specialty practice.

For the first several years, Heidi processed payroll once per month for their staff of eight, including her husband and herself, a nurse and other mid-level practitioners. One of the staff recently received certification as a nurse practitioner, which Heidi says has eased much of the burden on her husband and allowed them to grow the practice by accepting more patients.

“Doing the payroll once a month was more manageable and it worked for me and my husband, but many of the other staff wanted to be paid more frequently,” Heidi said. “I really didn’t want to have to do it every two weeks, plus I’m not in the office all the time, so I needed something convenient.” She also didn’t look forward to having processing the quarterly reporting and payroll taxes.

So she turned to her accountant, Shayna Chapman, for advice. Although she doesn’t offer payroll services, as the managing member of Chapman & Burris CPAs (www.chapmanburris.com), she has helped many area businesses overcome similar challenges. She said she looked at the issues Heidi was facing as part of a larger one – freeing up Heidi’s time and reducing stress by helping her find a solution to payroll that would be as easy and hands-free as possible.

“Payroll can be a complex issue for small businesses, especially with all of the new tax laws and reporting for employees in more than one state,” Shayna said. One of the staff members lives across the Ohio River in West Virginia. “Heidi is a dermatological nurse, not a bookkeeper or a payroll expert, so we had to find a way to simplify the payroll process for her, while also making sure that all of the compliance factors are handled correctly and on time.”

They ultimately chose a payroll system that automates almost everything. All Heidi needs to do is enter employee time data into a website interface, and then the payroll checks are processed by the payroll company they chose. They even handle all payroll tax, third party and benefits payments, then provide Heidi with reports so that she can see the overall details of payroll runs.

Also, since it is a web-based, cloud solution, Heidi can enter data, verify and authorize payroll runs from wherever she may be. Since the couple is active with several community groups and also travels frequently, this anywhere/anytime access turned out to be a major benefit. She’s also trained one of her staff members to do basic entry functions, allowing Heidi more freedom to be away from the practice, or to help with patients.

The web-based system also offers benefits to Shayna, the CPA. “I can log into the program to check on things if I need to, and we’ve authorized the payroll company and me to discuss her payroll functions. As her accountant, the biggest benefit is that a professional service is managing the back-end compliance work. So, I know it’s being done correctly, and I can count on the books being right.”

Previously, Shayna would handle the compliance functions, but she said she prefers that the payroll company is handling those issues, since it frees up some time for her to help the dermatology practice in other ways.

“Looking at it from a cost-benefit perspective, there isn’t much difference, but there is much less stress, so it was definitely worthwhile,” Shayna said.

“It’s great to be able to help local businesses succeed, especially when they are like the Blodgetts,” Shayna said. “They’ve come into a small town and are amazing employers, creating good-paying jobs with benefits, and they treat their staff like members of their family.”

Shayna said the couple is also active in the community and church, have two children of their own, and are also swim coaches for the local USA Swimming league. Using the cloud-based payroll system has allowed them both to better spend work time on patients, and to more fully enjoy their outside activities.

This has them also looking at changing to a cloud-based solution for their bookkeeping, and Heidi notes that since their profession has been moving toward digitization, going to the cloud would make sense. With some of her time freed up by no longer doing after-the-fact payroll reporting for the Blodgetts, Shayna has been giving Heidi advice about the benefits it would bring.

“I’ve told her that as her kids are growing up and she has more time, it would be great to get all of their accounting to the cloud, making it easier for both her and her husband to access key information whenever they need it, and whether they’re at the office, at home or even while they’re vacationing in Mexico,” Shayna said.

A web-based accounting system would also allow Shayna to have more access to their financial information when she’s doing reconciliations, their business and personal taxes and other services. It would also allow direct integration with their accounts at Ohio Valley Bank.

“Heidi is a friend and we enjoy spending time together, but having instant access to their data would save me from having to run across town to get a report or other information from her.”

After seeing the benefits that web-based payroll gave her, Heidi agrees. “I’m all for going to the cloud. Everything in the medical field is heading toward electronic medical records and we’re constantly bombarded with information about doing that.” She noted, however, that there are still some challenges, particularly with reliable high speed internet in the area.