Outsourced payroll services allow you to….

• Focus on more lucrative work. Research indicates that a small business of 10 employees will typically spend $2,600 per year in direct labor costs associated with payroll. You can save your clients time and money by offering payroll services, but you don't have to worry about the payroll workload interfering with your other more profitable activities.
  
  
• Minimize risks. The IRS reports that 40 percent of small businesses pay an average penalty of $845 per year for late or incorrect payroll filings. If your firm made the mistake, it can be held liable for those penalties. But most national payroll providers remove that burden for you by providing a tax guarantee; if the payroll provider makes an error that results in a penalty, the provider will pay the penalty.
  

A new service from SurePayroll (www.surepayroll.com) allows accounting firms to sell clients a Web-based payroll service that is completely branded with the accounting firm's name. Behind the scenes, SurePayroll transparently runs the Web site for your firm. Under the Web-based private-label program, called Custom Payroll Service, SurePayroll charges your firm a discount off its list price for services, such as tax filing and direct deposit. Your firm can mark up the price or pass the savings along to clients.

Here's a list of additional payroll providers that you might want to consider:

• ADP (www.adp.com) offers a full range of benefits, payroll, and business management services. The company's EasyPayNet provides online access to payroll processing, payroll tax filing, and benefits administration.
  
  
• Paychex (www.paychex.com) is a national provider of payroll, human resource, and benefits solutions to small business. Its online services include Paychex Online Payroll, Internet Time Sheet, and Internet Report Service. In addition, the company offers General Ledger Reporting Service, which allows companies to post payroll information directly to popular accounting software packages.
  
  
• Ceridian (www.ceridian.com), a large national payroll processor, recently introduced PowerPay, a Web-based payroll solution that offers tax filing, direct deposit, and unemployment tax compensation.
  
  
• Wells Fargo (www.wellsfargo.com/biz) has been offering payroll services to small companies for 40 years. The company's OnlinePayroll offering enables businesses to provide direct deposit, print their own checks, run payroll and view reports online, and track vacation and benefit accruals.
  

When selecting a payroll provider, keep in mind that each provider is unique. Some payroll providers allow you or your clients to interface with them via the Web, while others still require a phone call, a fax, or data entry via a software package and modem.

In addition, features and functions offered vary considerably by provider. Some handle every possible payroll scenario and are equipped to support large Fortune 100 companies. Others target their offerings to a specific niche market, such as exclusively serving small businesses.

If you work primarily with small businesses, find a payroll provider that focuses exclusively on small business and has a track record in that niche. If you work with corporations, look for a payroll provider that can handle all of the many complexities that are associated with those businesses.

The IRS reports that 40 percent of small businesses pay an average penalty of $845 per year for late or incorrect payroll filings.