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Payroll preparation may not be the most glamorous aspect of public accounting, but it is an area where we have expertise, and our clients want and need our help. Over the past few years many smart practitioners have made payroll services a staple of their practice as they found it to be a great client retention service and also very profitable.

A generation ago, calculating paychecks and preparing quarterly reports was the sole domain of accounting offices. As payroll became more complex practitioners began to shy away and national providers such as ADP and PayChex rose to prominence.

In the mid 90s technology advances made it possible for many clients to prepare their own payroll. Then along came the Internet and with it the ability for accountant and client to actually collaborate in the payroll process. Since most clients feel more comfortable when someone outside the organization is looking for obvious mistakes and errors this new paradigm has grown dramatically. There is value in the consultative role for the outside accountant in the payroll process of a client and web-based payroll offerings make providing the service practicable for small firms and their small business clients.

Historically, clients either completed their payroll processing in-house, or completely outsourced it to an accounting firm or a large payroll processor. Web-based payroll offerings make it possible for accountants and clients to collaboratively process payroll with as much or as little outside accountant involvement as necessary, while using tools which ensure that whoever does the work, the calculations and tax reporting is complete and accurate. Payroll offered as a service (called SaaS) makes it possible for both the client and accountant to in effect “rent” the payroll resources of a large organization, and work out an arrangement for collaborating on payroll which provides value to the client and profitability to the accountant.

These types of client payroll offerings fit into three distinct segments, and appeal to companies at different stages in their lifecycle.

Entry level payroll services, such as Intuit Online Payroll, PayCycle, and Run by ADP are designed to be the first payroll system used by a company. They offer accurate calculation, interfaces to the business versions of personal financial packages like Quicken and Microsoft Money, as well as programs like QuickBooks, Peachtree by Sage, and Microsoft Office Accounting. The products generally focus on ease of use (so the non-accountant owner/manager can handle payroll), value pricing, offer limited feature sets, and give unlimited support. These products can be purchased from their accountant, or sometimes directly from the service provider.

Accountant-based wholesale payroll services like Payroll Relief from Accountants World, PayCycle, WebPay by Paylocity, SureChoice by SurePayroll, and Run by ADP appeal to the market segment of businesses who want their accountant at the center of their payroll process. These tools provide portals so that accountants can view their client’s payroll information instantly online, and most offer exports into popular entry level accounting and write-up packages to facilitate the outside accountant preparing monthly financial statements. Some services in this segment also offer research content to accountants and tools to help market payroll and bookkeeping services to prospective clients.

High-End Payroll Services such as Ceridian Payroll & Human Resources, CompuPay Payroll Online, WebPay from Paylocity, and SurePayroll offer the most sophisticated feature sets and the widest variety of reporting options. These products provide more opportunities for integration of payroll with human resources content, and better ways to meet the payroll, human resources, employee benefits administration, regulatory compliance, and financial reporting needs of a mature company. High-end services help accountants prepare sophisticated reporting and analysis of salaries, taxes, and employee benefits, as well as manage compliance with laws and regulations affecting mid-sized and large businesses. These services also commonly offer administration or data exports for benefit plans like cafeteria plans, 401(k) plans, health insurance plans, healthcare reimbursement accounts, flexible spending accounts, and dependent care reimbursement accounts.

Just as no service meets the requirements of all three types of services here, no plan can meet the needs of all customers. Accountants know that the cost of picking the wrong payroll solution can be many lost nights and weekends preparing manual reports to meet sophisticated needs, and should investigate any payroll solution before picking a solution that is not right for their organization. To assist our readers in determining the best answer(s) for their firm we’ve reviewed the best of many possible solutions.

Below are links to each of the reviews:

Payroll Relief from Accountants World
Payroll Relief2
Ceridian Payroll & Human Resources
CompuPay Online
Intuit Online Payroll
Intuit logo New for 20082
PayCycle logo2
WebPay by Paylocity
Run by ADP
adp logo2
SurePayroll / SureChoice

Web-Based Payroll Solution Comparison Chart:

Last modified on Sunday, 02 June 2013
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