Human Resources & Payroll
Making the Right Payroll Choices for Your Firm and Your Clients
Jul. 11, 2015
For many accountants, payroll=plague, and should be avoided at all costs. Others have discovered that there are antibiotics, and a clean, safe way to handle payroll where there are notable recurring profits to be made while improving client relationships. Industry accountants who need accurate payroll information automated for integrated costing or benefits can self-medicate. Public practice accountants with successful collaborative accounting practices can add payroll with Human Resources (HR) capabilities. Many accountants have come to the conclusion that running a payroll system accurately and with minimal liability has become practical, cost-effective and profitable. Have you made this discovery?
No amount of reasoning, and certainly not this simple article, is likely to convince you to provide payroll services if you aren’t already doing so. Profitability, better client service, more accurate information, deeper client relationships and a more valuable practice are certainly not reasons enough to consider adding this your practice if payroll services don’t fit your strategy. However, if you can manage a team of people effectively, and these people know they are helping businesses with a burden that most business owners and manager would like to avoid, there is a business opportunity waiting for your consideration.
Why On Earth Would I Ever Want To Process Payroll?
First, I’ll readily acknowledge there are multiple pain points in running a payroll system. Pick one or more choices from the following list:
- remitting appropriate taxes,
- submitting forms and payments in multiple jurisdictions,
- compliance with payroll and HR regulations,
- time consumed running the system,
- extra time required for quarterly or year-end reporting,
- if paper is used, getting the forms required,
- acquiring all of the information accurately,
- maintenance of both the applications and data,
- integration to benefit systems,
- simply having to pay attention to and run the system every week or every day, and
- correcting errors that have been made.
More could be named, but this type of list is what prevents most accountants from considering running a payroll system, and feeling good about outsourcing this non-core competence activity. Admittedly, large scale payroll companies like Ceridian, ADP and Paychex exist for a reason, and they have built very nice, profitable, recurring revenue businesses. I respect and recommend these companies and their services on a regular basis when they are chosen for the right reasons. Rarely are these payroll services chosen because they are the least cost.
On the other hand, many of these pain points have been made much less painful with the current generation of software. Notable changes in the last 5-10 years include:
- Ability to outsource part or all of the payroll process eliminating the complexities and retaining the client relationship,
- SaaS solutions that eliminate maintenance and updates of the software,
- Employee Self Service (ESS) has reduced much of the data entry, accumulation of information, corrections, and distribution of information,
- Automated Clearing House (ACH), Electronic Funds Transfer (EFT), and employee payroll cards for the unbanked have made moving funds easier,
- Time capture including SaaS and Mobile timesheets have made accumulating employee hours easier, and in some cases, completely automatic,
- Some payroll services are willing to accept all liability, reporting and payment obligations, just like the completely outsourced payroll services, while your firm does the processing,
- Systems have optimized the time used for processing by minimizing or automating more steps without compromising controls and confirming audit steps,
- Processing both salaried and hourly employees has become almost automatic in some systems, with as little as one step for an entire payroll,
- Heavy payroll compliance areas such as Professional Employer Organizations (PEO), Staffing, Fiscal Agents and payroll services capabilities have been added to many software platforms,
- Integrated HR assists in the onboarding, compliance and termination of employees,
- Accuracy, control, ease of adjustment and flexibility while complying with regulations is easier to accomplish in less time with in-house payroll offerings,
- Time and costs are frequently reduced. While you may not have the appropriate skills to run a payroll system well, producing a weekly payroll, 941’s and W2’s has become routine and accurate and consumes minimal time.
Public accounting firms with collaborative accounting practices can add profitable recurring revenue using less expensive employees to service clients directly without increasing professional staff. Beyond increasing revenue, adding payroll and HR services can increase the value of the practice and tie clients more tightly to your firm in a way that compliance services can’t. Banks learned long ago that you have to have at least three service offerings to keep customers from switching. What three services do your clients use every month, or at least every year?
A few examples of software providers may help you see the possibilities. For example, long time software company CYMA offers payroll solutions across many different businesses, from PEO, Staffing, Fiscal Agents, Corporate, Not for Profit to Payroll Services companies. Having the upfront capability provided by Web-Based Employee Self-Service (ESS) which includes pulling hours into Payroll and then pushing to AR the invoice for payroll services all from one company is a big improvement in payroll. As CYMA has added HR, PPACA compliance reporting, Advanced Workers Compensation Reporting/Billing, Staffing Payroll & Billing, Payroll Billing, Client AR/EFT Enhancements, and improvements across all core accounting modules during the past year, they have vastly improved the ability of public practice accountants to provide payroll services, after the fact payroll and write-up. CYMA can be used by industry accountants for payroll, HR, inventory, and costing in addition to NFP accounting and is generally more sophisticated and faster than QuickBooks Enterprise for around the same licensing fees.
Another example includes Payroll Relief from AccountantsWorld. This SaaS based payroll system is part of the Power Practice family, and includes ESS, ACH/EFT capabilities and leave the public practice accountant in control. From the Firm Administration Portal through the Payroll Center and Dashboard capabilities, the product was designed to help an accountant work with their clients to make payroll processing collaborative, easy and effective. Payroll Relief can be set to automatically do the following on time: direct deposit, tax deposit, e-filing, child support, alimony, and comparable deadline based tasks. When Accounting Power and Cloud Cabinet are added, the firm can offer a complete collaborative accounting solution.
An additional example of a new generation payroll system that many firms have missed is the Sage Payroll Services powered by PayChoice. This acquisition by Sage in October of 2014 makes Sage one of the largest payroll organizations in the U.S. This business unit is serving 115,000 business in all 50 states, has nearly 2 million paychecks are processed each payday, and around 300 employees. Customer Support Representatives (CSR) have the Fundamental Payroll Certification (FPC) which contributes to notable Net Promoter scores and strong client satisfaction. Sage Payroll Essentials is for 1-10 employees and includes Internet Input/Mobile Access, HR Resources/Compliance, Standard Payroll Reports, Tax Filing, and CPA GL/Tax Data Access. Sage Payroll Full Service is for 11-500+ employees and includes Internet/Phone/Fax Input, Mobile Access, an expanded HR Tool Set, Advanced Reporting, Tax Filing, CPA GL/Tax Data Access, and a dedicated Client Support Representative (CSR). Another interesting capability is the interface to the Intuit QuickBooks family. The offering may be a better payroll option for QuickBooks than those from Intuit itself.
For public practice firms, Thomson Reuters myPay or ACS Payroll runs millions of payroll checks with sophisticated outsourced payroll capabilities. With over 6,500 customers, a 120%+ growth rate year-to-date, more than 1,100 referring accountants in all 50 states while actively processing payrolls in all 50 states, myPay is a viable alternative to outsourced payroll referral when compared to ADP or Paychex. Referring accountants can now import myPay Solutions W-2s to UltraTax CS via data sharing. myPay payroll uses the same sophisticated software engine as ACS Payroll to allow firms to process payrolls for clients. New to myPay this year is check based pricing. This simplified and bundled pricing model allows firms to offer a turnkey web-based payroll solution that is easy to understand and position in a large payroll offering. This also allows firms to address pricing model competitive disadvantages and capitalizes on Accounting CS Payroll success. Accounting CS payroll should be considered by full service accounting firms with in-house payroll processing services generating significant revenue and by larger accounting firms with a niche strategic focus on payroll, particularly firms that see web benefits. ACS Payroll is a good choice for firms doing small to large amounts of payroll.
We could continue naming great payroll systems from companies like Intuit which offers Basic, Enhanced and Full Service Payroll as well as payroll systems for accountants including Online Payroll For Accounting Professionals, ProAdvisor Program Plus Payroll, and Enhanced Payroll for Accountants. Other notable payroll competitors include WaveApp with the least expensive payroll system in the market, Zenpayroll for businesses with less than 20 employees that assigns direct service people to accounting firms, Paycom, Paycor and Optimum Solutions for organizations with Payroll and HR needs and many more. I hope you are getting the idea: there are lots of payroll systems that can support your needs and payroll opportunities.
So What Are The Most Important New Payroll Tools And Programs Available?
Up to this point, we have discussed the pros and cons of running payroll and given a few examples. There are many good to great payroll systems available. Products to definitely include in your search are:
- AccountantsWorld Payroll Relief – http://www.accountantsworld.com/solutions/payroll-relief
- CYMA Payroll and HR – http://www.cyma.com/
- Intuit Payroll – http://accountants.intuit.com/payroll-payments/
- Sage Payroll Services powered by PayChoice – http://na.sage.com/us/sage-payroll-services
- Thomson Reuters myPay Solutions – http://cs.thomsonreuters.com/mypaysolutions/
- Thomson Reuters ACS Payroll – https://cs.thomsonreuters.com/accountingcs-payroll/
- WaveApp Payroll – https://www.waveapps.com/payroll/
Other vendor offerings that you should be aware of and may satisfy your needs include:
- ADP Accountant Community – ADP Small Business Services
- EasyPayNet – ADP Small Business Services
- myPay – Thomson Reuters
- PayChex – Paychex, Inc.
- Paycom Payroll Services – Paycom
- Paycor – http://www.paycor.com/
- Payroll Relief – AccountantsWorld
- Payroll Services – Intuit
- Paylocity WebPay – Paylocity
- Sage HRMS – Sage
- SurePayroll (acquired by Paychex) – SurePayroll
- ZenPayroll – https://zenpayroll.com/
- 1099 Etc A-T-F Payroll – AMS Payroll
- ACS Payroll – Thomson Reuters
- CenterPoint Payroll – Red Wing Software
- CYMA Payroll & Human Resources – CYMA
- Optimum Payroll Software – Optimum Solutions
- Payroll for Windows – CheckMark Software
- QuickBooks Enhanced Payroll – Intuit
- Sage 50 (formerly Peachtree Accounting) – Sage
- Sage HRMS Payroll (formerly Abra) – Sage
- Payroll modules from accounting products such as Dynamics (GP=Great Plains, NAV=Navision), Open Systems TRAVERSE, etc.
Other Payroll Products
- CMS Payroll – Cougar Mountain Software
- Certiflex Payroll – The Versatile Group
- CyberPay – AdaptaSoft
- Execupay Payroll Suite – Execupay
- Insta-Pay for Windows – Cheque-Mate Internatinal
- Payroll Cafe – Stellar Softtware
- Payroll Plus – PenSoft
- TimeSheets – https://www.timesheets.com/
- Track1099 – https://track1099.com/
- Tsheets – https://www.tsheets.com/
- Winflier Plus After-The-Fact Payroll – Greatland, Corp.
An additional reference site for payroll and HR that include reliable products is at: http://www.accountingsoftwareworld.com/industry-solutions/human-resources. If you are aware of any significant product that should be added or removed, please contact me directly.
Better Results for Your Business and Your Clients
The right payroll and HR programs can provide better management, information and team member experience. We can continue to run payroll like we always have, or we can choose to improve the end-user experience, reduce costs, take less effort and integrate the time capture and payroll information with the accounting to provide accurate costing.
If you are in industry, you have the opportunity to make time capture, processing of payroll, costing, HR and benefits integration better for your employees. If you are in public practice, adding payroll and HR to your practice can improve client service and increase the long term value of your practice with a recurring revenue stream. Is it time to reconsider payroll?
See inside August 2015
How to Retain Your Firm’s IT Superstars
Retention is a huge challenge for CPA firms across the country and most of the focus and discussion is on accounting staff. What isn’t addressed nearly enough is retaining talent in important functional areas such as IT, HR, Marketing and Training.