Skip to main content

Human Resources & Payroll

Major Profits up for Grabs with Payroll Services

Column: My Perspective


From the September 2010 Issue

If at one time you offered payroll services and stopped because you found
it to be less than profitable, it may be time to re-evaluate. Back in the day,
we didn’t have the advanced technology required to process payroll and
make a decent profit. But oh, how things have changed. Powerful payroll software
and SaaS-based applications have changed the game, turning a once slow-moving
profit creek into a major revenue stream.

Payroll software isn’t what it used to be. What’s the old saying?
Oh, yes, “This isn’t your father’s Oldsmobile.” Advances
in technology, particularly web-based platforms, have truly changed the payroll
business. Payroll marks an enormous untapped market. And with today’s
technology, payroll processing is what it should be — highly efficient
and simple.

As you evaluate whether or not to get into the payroll biz, you shouldn’t
start by asking yourself, “What’s the right payroll software?”
Rather, you should start by asking, “What’s the right payroll model?”
I see your decision falling into one of four categories:

— This is an easy one. Evaluation over. Simply refer the business elsewhere.

don’t want to be in the payroll business, but you realize the value in
having a relationship with a provider. You refer the business out and may receive
a percentage of the captured revenue and have access to payroll reports on your

You want a piece of the payroll business, but require an advanced SaaS-based
system to perform some of the back-end processing. Typically, this model works
with your staff or clients entering time online, and the remainder of the payroll
process (back-end) is performed via the system. For example, the application
handles the direct deposit of payroll checks, and EFTPS is automatically paid
along with state and local taxes. With this strategy, the application is typically
tightly integrated with client employee portals for payroll check and client
report delivery. The firm invoices clients for the services. The cost is usually
higher than the traditional desktop solution based on the additional services
performed on the back-end by the vendor.

By “full-service,” I don’t mean to imply that other models
are not full-service. This is just a way to differentiate that the firm performs
all tasks related to the payroll process in-house. Applications used to support
the full-service model are often desktop-only (some are SaaS-based). The technology
in this space has improved significantly within the past few years. You will
find better integration with client employee portals for paycheck delivery,
electronic filing functionality, EFTPS deposit, along with many state and county
payment options. I have also seen improved impounding capabilities.

Be sure to read our Sept. 2010
review of payroll software
and services in this issue. I hope that outlining
these four payroll models will give you a better idea of what payroll solution
is right for your firm. One thing is sure; major profits are up for grabs. It’s
the great payroll opportunity out there. So take your time, think about the
payroll business model that’s right for you, read the reviews, and you’ll
be in a good position to make an informed decision.

See inside September 2010

ECR Software Corporation (ECRS) — Catapult

6703 800-211-1172 Catapult from ECR Software Corp. is a customized point-of-sale product that offers a series of specialized solutions geared toward specific retail business entities. Several add-on options are also available, the system a good fit for high-volume transaction processing businesses such as convenience stores, gas stations and grocery stores. BASIC SYSTEM FUNCTIONS The […]


Peachtree Payroll Options & New Benefits of Sage Accountants Network

Column: The Sage Peachtree Perspective