PayCycle, Inc. ‘ PayCycle Accountant Wholesale Service

CUSTOMIZATION/ SCALABILITY/SECURITY – 4 Stars

PayCycle offers a fair amount of
customization in terms of defining
the setup of pay types, vacation
and sick pay, and payroll deductions
(voluntary and garnishments, etc.)
Because the system is offered in
a hosted environment, it is highly
scalable from an infrastructure
perspective. You will need to assess
whether or not the system is suited
for a high-volume payroll.

The security is controlled via login
passwords, and the fact that the
data is stored off-site minimizes
the opportunity for other personnel
to access the system data.

FLEXIBILITY – 4 Stars
The system is designed for basic
payroll processing and has sufficient
flexibility for the typical small
business. You can print payroll
tax forms for all 50 states and
D.C. In addition, PayCycle offers
‘one click’ electronic
tax payments in 16 states. Checks
can now be printed on either pre-printed
or blank check stock, and direct
deposit is available at no additional
charge.

One particularly unique feature
is the automatic e-mail reminder
function for payroll processing,
tax payments and forms filing. The
e-mail message contains a link directly
back to the system to complete the
procedure.

Because this is a web-based solution,
the client or the accountant can
print reports locally and view information
simultaneously. Most importantly,
you get anytime, anywhere access.

REPORTING & CHECK PRINTING – 3 Stars

The reports available are nicely
organized into two categories: employee
and employer. Report selection parameters
are somewhat limited relative to
most of the other packages reviewed.
There are 13 standard payroll reports
that provide you with the basic
information required to process
payroll.

INTEGRATION/IMPORT/EXPORT – 3 Stars
PayCycle is designed to integrate
with popular small business accounting
packages including QuickBooks, Quick-
Books Online edition and MS Money.
You also have the ability to export
reports directly to Excel.

SUPPORT & UPDATES – 4 Stars

PayCycle offers a nice ‘to
do list’ feature to remind
you of tasks that need to be completed
to help avoid missing an important
step in the payroll process. The
company offers e-mail and toll-free
phone support at no extra charge.

RELATIVE VALUE – 5 Stars
Perhaps the most attractive attribute
of the PayCycle service is the pricing.
The price is $14.99 per month for
the first five clients and $9.99
per month for each additional client.
(The company noted that this is
a flat, monthly fee that doesn’t
vary based on the number of paydays
run during the month; nor does it
vary based on the number of employees
per client. Direct deposit, W-2s,
electronic tax deposits and filings,
and customer service with payroll
experts are all included at no extra
charge.) With all that the system
offers, including the infrastructure
and network administration services
provided via the ASP model, if you
can’t deliver a profitable
payroll service with this solution
then you need to conduct a careful
analysis of your service delivery
process and pricing model.

SUMMARY

Don’t be misled by the less-than-perfect
rating of some attribute categories
relative to the other packages in
this review. This is not because
the system has issues; rather, it
is a matter of the feature and function
set being much more streamlined
compared to many of the other packages
reviewed. This can be a real advantage
for those clients who only need
basic payroll processing. I think
it is fair to assume that the PayCycle
feature and function set will continue
to expand as the product matures.

2004 OVERALL RATING: 4 Stars

Review Attributes
This review is intended to focus
on payroll software solutions that
accommodate accounting firms that
provide client payroll services
as a ’boutique style service’
as opposed to a high-volume payroll
service bureau model (see August
2004 issue.) The attributes that
we felt were most important to address
for these boutique payroll systems
include the following six areas:
Ease of Use/Data Entry, Customization/Scalability/ Security, Flexibility, Reporting/Check Printing, Integration/Import/Export, Support/Updates
and Relative Value.

One caveat: The vendors who submitted
their solutions for review made
their own selection as to which
category to be listed under, and
the distinction between the packages
in the two separate groups can become
blurred. Therefore, be careful not
to reject solutions in one review
or the other simply on the basis
of the category they fall within.

Due to the fact that these systems
are not necessarily intended for
a high-volume, payroll production
environment, the Ease of Use/Data
Entry attribute is extremely important.
It is likely that the system will
be used by one or more staff members
who will process payroll on a relatively
infrequent basis, perhaps only a
few times a month. Therefore, the
system needs to be very intuitive
and easy to work with. What I looked
for here is how easy is it to quickly
understand the system flow, menu
design structure, data-entry screens,
etc. The easier it was for me to
understand and work through the
system, the higher the rating in
this category. If I had to constantly
refer to the help screens, user
guides or contact the vendor for
support, the rating was lower.

Even though we are making the assumption
that the packages reviewed in this
article are going to be used on
a relatively limited basis, it is
important that they have the Customization/Scalability/Security
features to support a large volume
client, provide the capability to
be adapted to a unique situation
and offer secure access to sensitive
client data. After all, the primary
reason firms support a boutique
level payroll service offering is
often driven by demands from a key
client who may have a relatively
large organization, highly specialized
needs, or a high profile in the
business community and wants to
ensure that the accountant provides
the maximum level of protection
and confidentiality of sensitive
payroll information.

The overall Flexibility of the system
is another important attribute that
was evaluated. The emphasis here
is on the software’s ability
to handle a multitude of payroll
situations, including pay date frequency,
multiple pay types and deductions,
multiple states, etc.

From the accountant’s perspective,
the software’s Reporting and
Check Printing capabilities are
perhaps the most important attributes.
After all, the accountant will be
relying heavily on the reports generated
to make sure the payroll tax compliance
requirements are met and to generate
the GL entries necessary to record
payroll. He will also use these
reports to continually monitor and
analyze the payroll information
to identify any irregularities and
unusual situations to which the
client should be alerted.

The ability to extend the payroll
system’s functionality by
importing data electronically from
time clocks, checkwriting systems
(for after-the-fact payroll processing)
and exporting information to human
resource and GL systems as well
as other software applications is
rated in the Integration/Import/Export
attribute. The higher the rating
in this category, the better able
the system will support a more complete
payroll service for your clients
as well as streamline the data-entry
process to optimize staff productivity.

The vendor’s commitment of
resources to help you utilize the
system as efficiently and effectively
as possible and to make sure you
are kept current on tax withholding
tables and other tax compliance
requirements is rated in the Support
& Updates attribute. Other than
providing some specifics of the
vendor’s policies and pricing
model for these services, the real
assessment of this attribute requires
you to perform your own due diligence
by speaking with other accountants
who are using the system in order
to assess their experience.

The Relative Value attribute focuses
on the overall economics of the
program. While a high rating here
implies a relatively lower overall
cost, I would like to caution you
that, as accountants, we tend to
focus on costs and how to minimize
them. The point to keep in mind
is that the lowest cost system is
unlikely to be the system that provides
the highest ROI (return on investment.)
If a more expensive system can reduce
total payroll processing time by
30 percent as a result of a better
design, user interface, etc., the
impact on the overall profitability
of your payroll services can be
significant.