Payday Possibilities

By Lauren Simonds | Posted January 25, 2005

Payroll; for some SMB owners it's just another business process awaiting their attention. For others, the very mention of the word can bring on a migraine headache (you know who you are). Fortunately, plenty of options exist for both groups, and knowing what they are — and how to pick the one that's right for you — can go a long way toward making payroll processing more efficient and less taxing.

Intuit — recognized as the defacto leader in the accounting software industry — offered up its payroll experts to talk about payroll options for SMBs — even the ones who don't care to use the company's ubiquitous QuickBooks. Here's what we learned.

Door Number One?
When it comes to processing payroll, SMBs can choose from four different methods. They can outsource the whole deal to a full-service payroll provider; employ a partial-service payroll vendor; have accountants provide payroll service, or keep the whole process in-house and do it themselves.

A full-service payroll provider takes over the entire payroll process. According to Diane Ueberle, senior marketing manager for Intuit Payroll Services, "All the SMB owner does is provide the company with the necessary data," she said. "The vendor takes care of everything else, including regulatory compliance, forms and taxes."

Handing off this task lets SMBs focus on building business rather than spending the time processing payroll. According to Ueberle, most companies that outsource their payroll to a full-service provider do so because they don't have enough people to handle it in-house.

Choosing a partial-service payroll provider means that you'll handle part of the process — processing data, printing checks, etc, — while the vendor takes care of payroll tax calculations, deposits, filings and W-2s. Ueberle said the benefit with this solution is that "it allows the SMB owner to maintain control over the payroll processing while avoiding the hassle of handling tax filings."

Many accountants offer payroll services, and they can help ensure regulatory compliance and handle forms and taxes.

Keeping your payroll process in-house lets SMB owners maintain total control over their payroll from start to finish. "SMB owners handle it all on a flexible schedule of their choosing," said Ueberle. "They maintain control and save money."

How to Choose What's Right for You
Are you happy with your current method of processing payroll? If not, or if you're adding payroll for the first time, spend some time thinking about what's important to you and your business. Intuit suggests that before choosing a payroll solution, you think about the following:

  • What do you need to accomplish — Payroll accounting? Payroll administration?
  • How do you receive information — Via the Web? Via fax or phone?
  • What payment method do your employees prefer — Checks, direct deposit, pay cards?
  • How much control do you need — Is retaining your payroll data in-house important to you?
  • How do you want to send out reports — Weekly updates?
  • Do you get to try before you buy — For a full-service solution, you should not have to commit to a product without trying it first.

Now you need to think about which vendor you should trust with your payroll. Consider these factors:

  • Vendor reputation — Will the vendor provide support for the unexpected?
  • Integration with other business programs — Does the vendor's system integrate with your accounting software so you don't have to enter data twice?
  • Time needed to get up and running — If you choose a self-service or partial-service option, you should consider how long it will take you to transfer your data and install the program.
  • Ease of use — Will this program be easy enough for you or your designated employee to use without extensive training?
  • Feature selection — Does it offer Direct Deposit, Paycards or HR benefit administration options?
  • No-fee guarantee — A full-service vendor should provide a no-fee guarantee that your payroll will be accurate and on time.

QuickBooks Payroll Solutions
According to Pamela Jackson, senior product marketing manager for QuickBooks Payroll, "we process payroll for more businesses than any other payroll service in this country." At last count, Intuit claimed over 800,000 customers for its QuickBooks payroll services.

The company breaks down its product offerings into a family of products.

  • QuickBooks Payroll
  • QuickBooks Standard Payroll
  • QuickBooks Enhanced Payroll Plus
  • QuickBooks Enhanced Payroll Plus for Accountants
  • QuickBooks Assisted Payroll
  • QuickBooks Complete Payroll

Quickbooks Payroll, with its three sub-products, stands as Intuit's answer to SMB owners that want to handle their payroll services on an in-house basis. According to Jackson, The Standard program ensures that your payroll is accurate. Integrated with QuickBooks software, the payroll program automatically fills in the data directly from your QuickBooks account. The program is also designed to update federal tax tables. Pricing starts as low as $17 per month when billed annually.

Jackson said that the Enhanced Payroll Plus edition adds state payroll forms to the mix along with Worker's Compensation tracking, Net-to-Gross calculations and automatic subscription updates to QuickBooks Pro and QuickBooks Premiere. Pricing ranges from $34 to $42 a month ($399 - $499 when billed annually)

Enhanced Payroll Plus for Accountants lets accountants offer full-service payroll processing as a value-added service to their customers. Pricing ranges from $399 to $499 per year.

Intuit designed QuickBooks Assisted Payroll to let you control the payroll while Intuit takes care of the payroll tax deposits, filings, and W-2s. Pricing starts at $79 based on five employees.

QuickBooks Complete Payroll lets SMB owners focus on building the business. "Typically," said Jackson, this type of customer values time over money. He'd rather pay a bit more money than spend an average of 60-to-80 hours a year behind a desk processing payroll." Pricing starts at $100 per month based on five employees. If you're interested in any of the QuicBook products discussed above, but still aren't sure which is right for you, try Intuit's 'Help Me Choose' survey.

Lauren Simonds is the managing editor of SmallBusinessComputing.com

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