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2007 Review of Payroll Systems

Keeping Ownership Of The Client Payroll Relationship

From the Sept. 2007 Issue Jump
to Reviews

“Ugh, Payroll.” That’s the thought that goes through the
minds of many small business owners every pay period, every quarter and then
one more time at the end of the year. And for good reason: Payroll can be complex
for even small businesses. It requires management of withheld federal, state
and local payroll taxes; unemployment insurance; union dues; and voluntary and
involuntary deductions like insurance, child support and garnishments. Then
come the reporting obligations and payment of these funds to government entities
and third parties, and even little mistakes can be costly. According to the
IRS, 40 percent of small businesses pay average payroll penalties of $845 per
year for late or incorrect filings. Non-penalized mistakes, such as incorrect
pay amounts, missing checks and other issues can also cause temporary headaches
for employees and, in turn, the business owner having to look into and reprint
a check.

It’s no wonder that many small business owners have outsourced their
payroll responsibilities for years. And with technology making payroll processing,
compliance and payment processes more easy to manage, it’s also no wonder
that professional accounting practices are increasingly adding payroll services
back to their client offerings. While many are doing so on a limited basis for
just a few clients, many professional firms are going all out, having realized
that with the proper technology and workflow processes, payroll can be a key
revenue center. Either way, systems on the market allow professional practices
to manage as little or as much of the payroll processing tasks as they want,
and still own the client relationship. In other words, even if your firm outsources
some or most of your client payroll processes, all client billing and interaction
can be handled through your practice.

Modern payroll preparation systems offer fully-automated processing functions
that let users simply enter employee time and accrual data, add bonuses, tips,
new deductions or other information, with the program performing all calculation
tasks when it’s time to pay employees. The continued adoption of direct
deposit has been a big relief, saving businesses as much as $0.50 to $0.60 per
employee by removing paper and check delivery from the process, while also eliminating
the need to reprint lost checks and diminishing the time that employees spend
at the bank. Newer additions to this feature also allow direct deposit for unbanked
employees, with their paycheck funds electronically deposited onto debit cards,
which frees them from usurious check cashing fees and decreases the risks they
face walking around with too much cash.

The continued movement toward online capabilities has extended to the payroll
arena, with programs offered both as online or traditional applications. The
most advanced payroll systems even provide secure online portals for employee
self-service, allowing them to view prior pay stubs and W-2s, as well as to
make requests for time off or notify payroll and HR personnel of changes to
their personal information like dependents, address and filing status.

Other features being rapidly embraced are electronic filing and payment of
state and federal tax returns, liabilities and workers’ compensation funds
from within the payroll system. Many programs include due-date management functions
that notify the user of pending tasks and provide prompts to process forms and
make payments. More advanced systems have started adding the ability to also
make electronic payments to non-government entities, such as child support withholding,
insurance premiums and garnishments. Because of the close relationship between
payroll and human resources benefits that are based upon payroll or time worked
(like deferred savings accounts, hospital plans and vacation and sick leave
accruals), payroll systems also provide varying levels of support for these
tasks but with automated workflow processing capabilities that greatly ease
these functions.

There is a broad array of payroll processing options available for professional
firms to offer their clients. Options include totally hands-off systems where
the business client provides the accountant with basic employee timesheet data.
Other options provide systems where the business client performs most of the
processing work, including check printing, but with the professional having
access to the payroll program to provide review services and to be able to import
transactions for write-up and reconciliation tasks. Still other options allow
the business client to outsource virtually all tasks to the accounting firm,
while the accounting firm also outsources the functions to an accountant-friendly
payroll service provider. The result is client payroll services branded as a
service of the accounting firm, with all client contact and billing handled
by the practice.

In prior years, we have reviewed professional payroll programs in two review
sections, based partly upon on how the software was used as well as on the role
that payroll services played in the professional firm. For firms with a strong
focus on payroll as a key service offering to most of their clients, we reviewed
systems that enabled these firms to work as a payroll service bureau. For professionals
to whom payroll is a peripheral function provided to only a few clients, a separate
review section explored programs more suited to payroll services on a more limited

This year, we have combined these groups into a singular payroll review resource,
with each product rated on several areas of program functionality: Ease of Use/Data
Entry, Features, Reporting Capabilities, Integration/Import & Export, and
Relative Value. The Relative Value section of each review specifically identifies
the type of professional practice most likely to benefit the most from implementation
of a specific program. 

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AccountantsWorld — Payroll
Relief AC
AccountantsWorld offers a suite of web-based programs
for professional accountants, including Payroll Relief AC, Accounting
Relief, CyberCabinet, Accountant’s Practice Online, After-the-Fact
Payroll and Sales Tax Online.
ADP — EasyPayNet
As a long-time direct provider of outsourced payroll
services to businesses, ADP is often considered a competitor, but the
company also offers an Accounting Partnership Program that provides various
options for accounting professionals.
AdaptaSoft, Inc. — CyberPay
CyberPay is a high-end service bureau payroll processing
system geared toward professional firms that provide payroll services
to large client bases. The highly customizable system offers integration
with Microsoft Office for reporting options.
AMS Payroll – 1099-Etc A-T-F
As an add-on option to the 1099-Etc system from
Advanced Micro Solutions, the After-the-Fact Payroll (A-T-F) system provides
both live and after-the-fact support for processing employee payroll and
1099 compensation.
CheckMark Software – CheckMark Payroll for Windows and Macintosh
CheckMark Software’s Windows and Macintosh
compatible payroll system provides support for all state and federal payroll
reporting, allowing users to process payroll runs with free direct deposit
and support for e-filing of returns.
CompuPay — PowerPayroll
CompuPay’s PowerPayroll is a web-based payroll processing and payroll tax compliance application geared toward use directly by businesses, but with accountant-oriented interfaces that enable professionals to manage payroll functions and access reporting for multiple client accounts.
Cougar Mountain Software – CMS Professional Payroll
CMS Professional Payroll is offered as an add-on
to the vendor’s professional accounting suite and is an integrated
part of the vendor’s nonprofit accounting suite. Generally used
as an in-house payroll application, the system can also be used by professionals
who provide payroll services .
CYMA Systems, Inc. – Accounting for Windows Payroll Module
CYMA Systems offers two comprehensive financial
accounting systems, one for traditional businesses and one for nonprofit
organizations, with GL, AP, AR, sales, purchasing and job costing. CYMA
also has a client write-up system for professional accounting practices.
Intuit – QuickBooks Enhanced Payroll For Accountants
QuickBooks Enhanced Payroll for Accountants is
an add-on module that integrates directly with an accounting firm’s
version of QuickBooks. Technically, the module is already in QuickBooks,
but a subscription to Enhanced Payroll is required to unlock these functions.
Mangrove Software — Mangrove Online
Mangrove Software’s Mangrove Online is a high-end, extremely comprehensive online payroll and human resources management system that provides variable levels of service…

PayCycle – PayCycle 2007 for Accounting Professionals
PayCycle’s online payroll system provides
a completely automated payroll processing and compliance system that can
be used in a variety of ways, either by the client or the professional.
Paylocity — Paylocity
Paylocity offers a web-based payroll and human resources
system that is designed to be a nearly hands-off system for use by individual
businesses while allowing supervision by the business’ public accountant.
PenSoft — Payroll Plus
Accounting Edition
PenSoft offers both industry-specific in-house and
service provider-based payroll solutions, including the Payroll Plus Accounting
Edition. The Payroll Plus Accounting Edition supports all 50 states in
addition to unlimited companies and employees .
Red Wing Software – CenterPoint Payroll
Red Wing Software’s new CenterPoint Payroll
is an impressive addition to the company’s line of accounting products
for small businesses and franchises, trusts, agricultural concerns and
government entities. Built on the .NET platform and utilizing new technologies,
the program is fully compatible with the new Vista operating system.
Sage Software – Abra Payroll
The Abra Payroll program is part of Sage Software’s
Sage Abra HRMS, a comprehensive human resource management system that
includes advanced capabilities for handling corporate payroll, online
benefits enrollment, employee education, performance reviews, and online
Sage Payroll Services – Full-Service Payroll
Through its Sage Payroll Services business, Sage
Software offers outsourced payroll processing, compliance services and
integration with the technology vendor’s professional accounting
systems. Primary processing functions are managed through the Full-Service
Payroll option.
SurePayroll — SureChoice for Accountants
SurePayroll offers payroll processing solutions to both business owners and accountants providing service to multiple clients. Through SureChoice for Accountants, professional firms can utilize the online system, including rebranding of client interfaces and support for an unlimited numbers of clients.
Thomson Creative Solutions —
Payroll CS
Payroll CS is offered as part of the Thomson Tax
& Accounting CS Professional Suite (formerly Creative Solutions),
which offers a comprehensive collection of completely integrated professional
accounting software, online applications, electronic document management
utilities and secure client collaboration portals.
UBCC — Payroll Service Bureau

Universal Business Computing Company (UBCC) provides a commercial Payroll Service Bureau program for accountants, along with a collection of professional accounting programs, including client write-up, contractor management and full accounting with GL, AP, AR, bank reconciliation, asset management, job costing, inventory and billing.