For the better part of two years, Perquest has quietly gone about developing a new way for small businesses to process their payroll. This week, the Los Altos, Calif.-based company launched the fruit of its labor in the form of a new online payroll service that provides small businesses with the ability to manage their entire payroll process over the Internet.
The Perquest online payroll service is designed to bring a new level of flexibility and ease-of-use to payroll processing. Through a controlled early release, Perquest already processes tens of millions of dollars in payroll for a number of small businesses in California.
BarkerBlue Digital Imaging is a small blueprinting firm based in northern California and a beta tester for Perquest. Gene Klein, Jr., president of the 35-person digital imaging firm, said his growing business experienced growing pains when it came payroll processing.
“Processing payroll has been a challenge for my company. As our workforce grew, we outsourced to a large, traditional payroll service, but we still found ourselves burdened by a laborious call-in process and our responsiveness to our employees actually decreased,” Klein said. “After being introduced to Perquest, the improved results have been dramatic. Our accounting department now saves many hours of time per pay period, and our employees get even better service now than when we did payroll in-house.”
Retooled for the Digital Age
Perquest built its online payroll service from the ground up to ensure that small businesses have an ideal combination of convenience and control when handling their payroll. Because the service is XML-based, the registration process that puts the service in gear is quickly completed over the Web. It also means that the service can be is fully integrated with most major financial management software, such as QuickBooks.
David Kahn, founder and CEO of Perquest, isn’t shy about touting the new payroll systems capabilities.
“The launch of Perquest marks a new era in the payroll industry,” Kahn said. “The more than seven million small businesses in the U.S. finally have an outsourced payroll solution that is designed with their specific needs in mind.’
According to Kahn, the payroll industry has largely ignored the small business market. He said large corporations with hundreds of employees pay less per employee for their payroll processing than small businesses, which doesn’t sit well with the upstart application service provider.
“Payroll processing systems haven’t changed in years — they are still archaic and time consuming,” Kahn said. “A large business might pay $2 per paycheck, but a small business will pay $10 for the same service. We’re using the Web to automate the payroll process for small businesses. We mitigate the costs and hassles associated with current solutions.”
Secure, Yet Flexible
Perquest focused on eliminating two barriers in order to come to market with a service that simplifies the payroll process for small businesses. First, the company had to build a fault-tolerant infrastructure capable of handling sensitive information securely over the Web.
The Perquest online payroll service takes advantage of advanced security technology. The company employs business practices guaranteed to keep payroll information safe, secure and private. Perquest’s service is entirely server-based and browser-accessed, so no confidential payroll data is stored on small office networks. If a hard drive crashes or a laptop is stolen, sensitive employee information won’t be lost or fall into the wrong hands.
Payroll information resides on servers that are guarded both physically and electronically. Perquest’s servers sit behind an electronic firewall and are not directly connected to the Internet — private information is available only to authorized users. Physical security includes two guarded security perimeters, redundant Internet access and backup power supplies, as well as regular offsite data backup.
Additionally, when in communication with Perquest payroll services, data is encrypted using the Secure Sockets Layer (SSL) protocol, with an encryption key length of 128-bits — the highest level of security commercially available.
The second barrier to efficient payroll processing Perquest had to overcome, was figuring out a way to automatically process data from the 3,000 federal, state and local taxing authorities in the U.S. Once again, because the service is Web-based, any changes to tax codes are automatically replicated throughout Perquest’s system. This makes it much easier for small businesses to know they are operating in compliance with current tax laws.
Perquest can handle processing hourly, salaried and commissioned payrolls on a weekly or biweekly basis. A small business can be up and running with the Perquest service in a matter of minutes without having to purchase, download, install or learn a complicated software program. The program is flexible enough to let bookkeepers assign specific earning codes for regular hours and overtime. Hourly rates can also be adjusted to reflect special pay schedules for night shifts and weekend work.
The program automatically calculates and withholds taxes and other deductions, but still allows for applying regular or one-time deductions and withholdings for cafeteria plans, insurance, plans, and 401(k) allocations. Perquest can also handle one-time payments, such as salary advances, bonuses or severance pay.
Bookkeepers can preview each and every paycheck and stub, transfer funds by direct deposit, or print checks. If payroll needs to be corrected, the entire payroll can be reversed, or a payment to an individual employee can be reversed, then corrected.
Perquest can also handle hourly plus commission payroll processing — and it does so like no other service. Kahn explained how.
“The large payroll houses process hourly plus commission with a flat tax rate that averages on the high side of things,” Kahn said. “Because the tax rates are different, it’s a complex process. But our system is accurate enough to process each form of compensation with the lowest tax rate available. We’ve refined our payroll process to support the back office, not vice versa.”
Company information can be reviewed and updated online. There is no need to call or fax Perquest to change the company’s address, bank accounts, or tax information. All changes that made will be reflected in the automatic filings that Perquest makes with the relevant tax agencies. Audit trails and notifications ensure that small business owners can track and monitor all payroll entries, changes to employee and company information, or modifications to access rights.
Pricing and Availability
Even with a rich feature set, Kahn said the best thing that Perquest service offers is no hidden fees.
“We can provide lower fees because of our end-to-end redesign of the business process,” Kahn said. “Usually lower fees equates with less service, but that’s not the case with Perquest. Payroll companies have a history of hiding fees. We don’t hide our costs.”
BarkerBlue Digital Imaging’s Klein said the firm is enjoying hard-cost savings of about 40 percent on payroll fees.
A base subscription to Perquest costs $29.95 per quarter. In addition, each bi-weekly payroll processed costs $22.95 plus $2.50 per employee; weekly payroll processing is discounted to $14.95 plus $2.50 per employee.
The Perquest service is available immediately to California-based businesses and will expand to Florida, Michigan, Massachusetts, Texas, New York, Oregon, Washington, and Nevada in January 2004. The service will be rolled out nationwide throughout next year. In the meantime, you can checkout Perquest’s payroll service online and take it for a 10-employee test drive.
[UPDATE: December 4, 2003] Since we first covered Perquest’s payroll service for small- and medium-sized business, the company has changed its pricing and feature set. Perquest found that it was much simpler for its customers to offer its services at monthly rates. The new pricing for Perquest’s standard payroll fees is $49.95 a month, plus $4.95 per employee per month. In addition, a number of services that used to carry service fees are now included in the standard payroll service. Unlimited payroll runs, W-2 filings, new employee registrations and payroll reversals are now free of charge. Toll-free phone and e-mail support is also free and comes with a guarantee to respond by the next business day.
|Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!|