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| Software Review: Online Payroll Spreads |
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| Dave McClure Accounting Technology August 16, 2004 Summary: Need help with PR? If you are looking for a great PR firm, you've found one. Walker Sands is a leading Chicago PR firm with a strong track record that makes it one of top national PR agencies.. For a software vendor, moving a product from the desktop to the World Wide Web can bring as much bad news as good. On the plus side, it shores up waning revenue streams from products that
don't change much from year to year, ensuring that people pay for access
even if no updates are available. On the minus side, the category, flush
with me-too competitors is ripe for consolidation.
For a software vendor, moving a product from the desktop to the World Wide Web can bring as much bad news as good. On the plus side, it shores up waning revenue streams from products that don't change much from year to year, ensuring that people pay for access even if no updates are available. On the minus side, the category, flush with me-too competitors is ripe for consolidation. Online payroll processing is experiencing both. While there is some expansion in the product lines with the aggressive move by states to bring their payroll tax functions into electronic formats, the emphasis has shifted from product development to shoring up service levels and redefining market segmentation. The products are not yet cookie-cutter clones of one another, but they are becoming remarkably similar in pricing, core functionality, and presentation. Data-entry screens at the front end don't leave much room for creativity, and the final products-paychecks and reports-likewise are pretty standard in format. The user interfaces for these programs range from Spartan to attractive, but this is not as great a selling feature for accounting firms as it might be for the average consumer. Pricing policies are not greatly different from one package to the next. Only a few of the online payroll sites have caught on to the fact that service will be what differentiates them from competitors. The majority are still touting the convenience and control of online processing as compared to desktop processing and printing, even though there are virtually no major players still offering only PC-based services. Even the long-dominant service bureaus have joined the fray by adding Web interfaces. Nor is collaboration the strong selling feature it might be with other accounting software packages. While it may be important for the accountant and the client to examine and confer over financial results or balance sheets online, payroll is more often considered a subroutine-just make the changes in hours or pay, process the results and cut the checks. For this reason, many companies of 10 or fewer employees still prefer to use a simple PC program, or even a paper ledger with manual transfer of the data to their accounting system. Differentiating between competitive Web sites for online payroll processi must ultimately be based on efficiencies that can be delivered to the client, not simply a list of features. The seven online payroll processing programs presented for 2004 do differentiate themselves, though perhaps not as much as they will need to if they are to avoid the inevitable wave of consolidation over the next few years. A new and welcome development is the number of sites that are geared specifically to the needs of accountants, foregoing the revenue streams from individual companies to build and retain loyalty in the accounting markets. SurePayroll.com SurePayroll lays claim to being the largest online payroll processor, and also to having a 94 percent satisfaction rate among users due to its innovative style and strong support. Streamlined navigation is conducted via five tabs along the top of the site or by links along the left side of the page. Calling up payroll information allows the administrator to adjust and preview the payroll, then see the payroll cash requirements and the date the money will be withdrawn from the company bank account prior to approving the payroll. The payroll reports include 401(k) totals, benefits, pay stubs, and quarterly tax and W-2 information, with two years of historical data displayed for reference. Employees are paid by direct deposit or with a physical, MICR-encoded check. SurePayroll also offers an employee self-service that allows each employee to view his or her pay information online, print copies of pay stubs, and view balances for vacation, benefits, withholding, deductions, and 401(k). The payroll data can be integrated with QuickBooks or MYOB general ledger programs. New for this year are two additional capabilities-SureCheck, which provides an additional verification of year-to-date payroll totals for each employee; and W-2 Preview, which allows the customer to preview the year-to-date information for each employee before the end of the year. SurePayroll offers a product exclusively designed for accountants called the Custom Payroll Service for CPAs. The Custom Payroll Service is a turnkey solution that lets accountants offer a "branded" Web-based payroll service to their clients, licensing and remarketing the service under their brand and pricing. The solution is ideal for accountants that don't offer payroll services, and the pricing includes direct deposit, all tax filing and tax payments (federal, state, and local), quarterly returns, unlimited customer service, and the employee self-service functionality. SurePayroll is an excellent package for accountants looking to offer payroll services and for small companies that want a professional payroll service but can live without the more advanced human resources services required for larger firms. EasyPayNet In December 2003, Automated Data Processing introduced a significant overhaul to its online payroll service with the debut of the Data Access Suite, a valuable complement to the EasyPayNet payroll service and a substantial resource for partnering with accountants. The Data Access Suite includes the InfoLink general ledger interface, which transforms gross-to-net payroll and employer tax information into pre-formatted journal entries that are then imported electronically into QuickBooks; Data Export, which gives users the ability to access and download payroll data; and Electronic Reports, a sophisticated reports generator. The suite rounds out the offering of EasyPayNet, an effective and easily navigated online payroll processing service. Embedded within the program are a number of critical features, including 128-bit SSL encryption for security of the data online; a sophisticated online help system that includes Frequently Asked Questions on 202 topics; and systems for electronic tax reporting, tax payments, MICR-encoded check printing, direct deposit, and extensive payroll reporting. ADP ups the ante for its payroll service by packaging it with an online resource for accountants offered through the ADP Small Business Division. Here, in addition to access to information on ADP products, accountants can find a Professional Education Center with more than 400 accredited and discounted courses for continuing education credits; a page of research data and useful tools, including payroll, retirement, and investment calculators; a master list of accounting trade shows; and a host of ancillary services. In addition to straightforward payroll services, the site also provides products for tax and compliance, human resource management, time and labor management, and insurance services. There is still room for improvement, of course-the product descriptions on the accountant's site are somewhat vague and barely mention the online services. But ADP has vastly improved on its first-generation EasyPayNet product, and its current Data Access Suite offers an excellent balance of features and simple navigation to make it a high-value product. For its product depth, its support of accountants, and its excellent online implementation, ADP should be at the top of the list for online payroll services under consideration by an accounting firm. Paychex Online Payroll Paychex continues to be one of the most highly lauded companies in America both for its business performance and its products. In 2004, it was named one of the "25 Most Admired Companies" by Fortune Magazine and one of the best-managed by Forbes. Its flagship online payroll processing program, Paychex Online, is a tightly integrated suite of Web-based services first introduced in 2001. The suite has undergone a continuous process of improvements, including an update earlier this year that added another new online service center and weekly training seminars in addition to updated capabilities. The updates add a quarterly employee earnings record, an on-demand capability that allows you to choose an employee and date range, and Reportlink, a report generator that allows the export of data to other software applications. Three things set Paychex apart from other online payroll services. First, the application is extremely flexible and scalable. Data can be entered or viewed en masse or by individual employee, and the program has the ability to handle complex as well as simple payrolls. Second, it offers integration with a host of other essential programs that include a paperless reporting service, online time sheets and an interface to post payroll data into popular general ledger programs. Supported ledger programs include Accpac, Creative Solutions, MYOB, Peachtree, and QuickBooks in addition to manual integration with other accounting programs. All of these programs are supported both with online help and via customer service offices. Finally, it offers an array of additional services for small businesses and accounting firms-from assistance in electronic payment of payroll taxes to handling of 401(k) plans and workers' compensation. For accountants, a wealth of reference material is supported by educational programs in 14 practice areas. There are even referral sources for employee assessment, pre-employment screening, health insurance and other small business services. As an added control feature, companies can give their accountants access to the online data at no additional charge. Aimed at small to midsize businesses and their accountants, Paychex Online is a smart, flexible service offering high value and superior performance in a simple, easily navigated package. PayChoice Online PayChoice Online, a flexible, customized online solution included in the Payroll Associates Online Employer suite, covers payroll, employee services, Internet time tracking, general ledger interface, workers' comp, data recovery services, and debit cards. Payroll Associates was one of the first companies to realize that the Internet provides a means to extend the service bureau concept with a highly customized Web interface. Each company receives its own payroll site hosted by Payroll Associates, with the company name, logo, and choice of color scheme. Clients are able to view their company and employee information, make personnel changes and additions, enter their payroll information, settle their totals, run a Gross-to-Net Preview (not required), and when it is completed to their satisfaction, submit their payroll for processing. Helpful wizards make the processes easy and fast. Payroll data is transferred to the service bureau as 128-bit encrypted files secured with Secured Socket Layer (SSL) protection guaranteed by VeriSign. Payrolls are automatically processed and the Web server can then be updated with the new master files. An email is sent to the employer informing them that their payroll is completed, along with a full set of electronic report files, check stubs, or live checks if they prefer. Payroll Online features a clean, attractive interface that is easy to navigate and use. What makes the service exceptional is the level of detail available, particularly in terms of employee data. In addition to the standard level of data, this service captures sick time accrual, the employee's training history, I-9 citizenship data, military status and security clearance information-data normally relegated to human resources software but essential to many small companies. Payroll data is presented in one of two views: Pay Detail or Pay Grid. The Pay Details screen is designed to show the complete pay information for a single employee, and is suited for payroll that requires frequent overrides, such as department splits or temporary hourly rates. The Pay Grid is a faster view designed to present the "big picture" view of all employees along with the nine most common pay codes used by the company. PayChoice Online is a very robust online service, backed with a solid and reputable service bureau. Oriented to serving companies, it nonetheless offers excellent collaboration features for accountants and their clients. PayCycle Wholesale Accountant Service PayCycle offers economical wholesale payroll services for accountants in a simple and flexible online format. The service allows accountants to manage multiple payroll clients from within a single dashboard view accessible from a single log in. Accountants can decide whether they or clients will perform employee set-up and data entry. And the program exports paycheck data to most small business accounting packages, including QuickBooks, QuickBooks Online, Quicken, Money, and Excel, eliminating the need for data re-entry. Everything about PayCycle is organized to make the process less complicated and more profitable for the accountant. Direct deposit is available for no extra charge. Paychecks and pay stubs are printed locally from the Web site either by the accountant or client. Blank check printing eliminates the hassle of maintaining a separate inventory for each client, and can lead to more than 50 percent in savings over pre-printed checks Federal tax payments and tax filings (940s, 941s, and W-2s) can be made electronically for no extra charge, with a simple click of a mouse. PayCycle also supports electronic state payments in 16 states, and new state tax electronic functionality is added continuously. State filing and payment forms are available in all 50 states and the District of Columbia. The forms are pre-filled, and state tax obligations are instantly calculated. For states that require original forms. PayCycle provides a worksheet to show payroll tax numbers and tell accountants exactly where to put them on the form. The service automatically generates To Do lists and email reminders, ensuring that payday, filing, and payment deadlines are not missed. In the area of customer satisfaction, PayCycle has taken strong measures to both boost its service levels and keep track of trends. Its customer base of accountants has grown by 442 percent in the last 12 months. And in a recent IRS-initiated "94X Customer Satisfaction Survey," in which nearly half the respondents were PayCycle customers, 96 percent of the respondents were either satisfied or very satisfied with electronically filing their IRS forms, and 92 percent of respondents rated electronic filing as "better" than any other method. With a targeted approach to accountants, an economical fee structure, and a passion for performance, PayCycle is an excellent choice for accounting firms that want to offer payroll services on their own terms and under their own logo. Payroll Relief AC Unlike the service bureaus, which can compete with the accountants for the business of their corporate clients, Payroll Relief AC aims its services only at accountants, offering steeply discounted pricing and streamlined features designed to boost the practitioner's revenue. Incorporated as part of the AccountantsOffice Web site, Payroll Relief is well designed, with navigation via a top line of buttons. At the heart of the system are the Payroll Center for accountants, which offers reminders of pay and filing dates as well as payrolls in progress and helpful links, and the Employer Activity Center, which provides a detailed overview of the active employer's tasks, including current payroll status, payday reminders, tax due dates, taxes paid, forms filed, general reminders, and critical diagnostics, if any. Key features of the site are calculations and payment coupons for all 50 states and localities, the District of Columbia, and Puerto Rico; the ability to handle multiple pay schedules and multiple states, including multiple unemployment states; fast data entry either via spreadsheet format or one-employee-per-page format; the use of 18 pay types, including tips and reimbursement; and support for third party sick pay, dependent care benefits, health insurance for 2 percent shareholders, and handwritten checks. Payroll Relief AC provides for direct deposits with multiple accounts per employee; electronic payments for federal and most major state taxes; electronic filing of 941 and quarterly forms; and electronic filing of W-2s and W-3s. It generates 25 comprehensive reports, with export to Excel and RTF file formats for additional report formatting. And it supports all compliance forms for the 30 most popular states. Beyond payroll processing, Payroll Relief AC offers exceptional training and support, including continuing education courses and online seminars. Marketing support is also provided, with customizable product brochures and client letters. A relative latecomer to online payroll processing, Payroll Relief AC is nonetheless one of the strongest and best-designed program in its class. Its unabashed focus on accountants and extensive support system make it a standout worthy of consideration by accountants looking to boost their profitability. PowerPayroll/XpressPayroll PayMaxx, the sixth-largest nationwide payroll processor, aims to compete in the crowded field for online payroll services with superior service, more efficient centralized operations and a focus on companies with 100 or fewer employees. PowerPayroll, the core Internet-based payroll and tax filing service, was introduced in 1999 and aimed at the needs of companies with 11 to 100 employees. Using PowerPayroll, companies can submit their payroll via the Internet and receive payroll checks and reports the next day or, alternatively, print their payroll checks and reports in their offices. PowerPayroll features a sharp, attractive, and intuitive interface with eight major navigation tabs: Payday, to submit payrolls, checks and voids; Employees, to add or edit employee information; Company Info; Customer Corner, a support, contact, forms, and information resource; Reports, to manage checks and payroll reports; General Ledger, to export information to Excel, ASCII, or Intacct/QuickBooks format; PayView, to review check stub details and W-2s; and Employee Self Service, which allows the client company's employees to edit and update their own information. Additionally, PayMaxx has built in security features and Web access to reports for CPAs. In July 2003, PayMaxx released XpressPayroll, a streamlined Internet-based payroll service for micro-businesses (companies with from one to 10 employees). XpressPayroll can be used easily and quickly with little or no payroll experience. It includes a general ledger link, electronic new hire reporting, and a comprehensive tax filing, compliance, and payment feature for all payroll taxing authorities for one state including quarterly 941 and EOY 940. Direct deposit is supported for all employees (with a limit of two accounts per employee). PowerPayroll and XpressPayroll are economical and highly functional online payroll services that can compete effectively in a crowded marketplace because of an emphasis on streamlined operations and on service-welcome in any small business. EasyPayNet Data Access Suite
Copyright © 2004. Accounting Technology.
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