From the October 2021 Issue.
Software makers are trying hard to make a difference. The accelerated change noticeable in the last two years in accounting software, accounts payable, payment systems, human resources, and payroll is astonishing. The same is true for practice management & trial balance software, too. As this year completes and the conference season heats up, I’m anxious to see the new developments in document management, workflow, tax, and audit software. But that will be a topic for a different day.
The temptation was great to write about the advances in Cloud Accounting. Following the theme of this month’s publication with products like AccountantsWorld Accounting Power, AccountingSuite, Acumatica, Dynamics 365, Intuit QuickBooks Online, NetSuite, Sage Intacct, simPro, Spire Systems, Xero, Zoho Books, and others would have been easy. Our weekly podcast, The Technology Lab, should cover these cloud accounting products for the moment.
This year provided an opportunity to review over 50 payroll, PEO (professional employer organization), and HR (human resources) products for our K2 courses on accounting software, add-ons, and reporting tools. Fantastic progress has been made, and to quote an old advertisement, payroll “is not your grandfather’s Cadillac” anymore.
So, Why Payroll?
Simply put, most of us get paid to work. If you are lucky enough to create jobs or have a job, you wind up with a check once or twice a month, whether a draw or paycheck. Our pay is a measurement of the value we put into businesses. It is the great bargain some of us can make, trading our daily lives to accomplish goals. Peter Vessenes, in his book Bumper to Bumper: Building Your Multimillion-Dollar Business, explains this quite clearly. Bumper to Bumper is one of my top recommended books of the year in addition to WorkQuake by Steve Cadigan. Both can help you see the future of business and work in this decade including the evolving culture of employees. In addition, both books can provide insights into the Great Retirement and Great Resignation that we see in many accounting firms and companies.
In effect, our paychecks represent Capitalism at a very personal level. To quote Peter Vessenes, “Capitalism is an exchange of goods or services wherein all parties in the trade believe that the value received is equal to or greater than the value offered. In the simplest form, Capitalism is nothing more than a barter. Each party believes they received something that was worth more to them than what they offered. The key word in this statement is believe. Very successful capitalists are very effective in persuading their trading partners to hold a high value of their goods and services.”
Payroll systems allow companies to pay their employees conveniently. Whether the payroll is run as a self-serve DIY operation or completely outsourced is a point for another discussion. However, there are so many payroll options, they will not all be listed in this article, but rather maintained on the K2 websites at the cloud section of CPAFirmTechnology.com or the human resources section of AccountingSoftwareWorld.com.
If you are running a Client Accounting Services (CAS) practice, payroll is one of the essential recurring revenue streams that you can create. Consultants that sell practices note that a firm with recurring revenue in a payroll operation can obtain 3.5-4.5x revenue during a sale, while most firms today are doing well to sell at .8-1.25x revenue.
So, What Do We Need to Know About Payroll Systems?
Everyone has one. The question is how much involvement you want in payroll. For the last 30-40 years, most CPA firms outsourced payroll to ADP, Paychex, or Ceridian. These very capable companies built large payroll and HR operations on the backs of their hard work, software, referrals from CPAs, and the efforts of their sales and support teams. All three are frequently recommended and deserve referrals. Each could have a column, or a book, written about their capabilities.
The most accountant-friendly and reasonably priced payroll system in the U.S. market is AccountantsWorld Payroll Relief. This system is only available to professional accountants to use for their clients. It is never sold directly to end-users. The system is highly efficient for data entry, when required, and handles the entire payroll process end-to-end as effectively and efficiently as any system in the market.
The ACH capability could be sold separately if the AccountantsWorld management team was interested in capitalizing on the FinTech stock boom. But they are focused only on helping accounting professionals help their clients. As an additional benefit, Payroll Relief is one of the lowest cost solutions, too. Their 12-page brochure explains many of the features. However, the best thing to do is participate in one of their 30-minute webinars or request a detailed demonstration. As part of an evaluation and selection process with a client recently, I was fortunate to participate in a five hour demonstration of Payroll Relief’s capabilities including handling agricultural clients and 943 forms.
Every question about a feature needed was correctly answered affirmatively. Larger competitors had already proved they could not do what was needed by this client. While AccountantsWorld is not perfect, they work to get things right and better every day. Many of my clients have converted from Intuit payroll in the past year. They are more motivated to do so right now because of the forced conversion going into 2022 AND the new licensing policy that went into effect in September 2021.
Speaking of Intuit, many of you use Intuit payroll with great satisfaction. However, you should read Intuit’s Global Privacy Statement, Intuit’s Terms of Service for QuickBooks, and QuickBooks Workforce Services and determine if the Intuit Workforce data usage is acceptable in your client base. Intuit has an aggressive strategy to convert your clients into their customers.
After reviewing payroll systems that could be effectively used with QuickBooks, Sage Intacct, Xero, and other CAS solutions, the most impressive new products were OnPay and Rippling. At least 20 good payroll products could be used as an effective CAS payroll solution, but our favorite remained Payroll Relief. Even though the K2 websites for payroll named earlier are vetted options for payroll, this list may help get you started on evaluating your payroll alternatives:
- AccountantsWorld Payroll Relief
- ADP Full Service Payroll
- ADP HR Services
- ADP RUN
- Apex Human Capital Management
- Ascentis
- Bamboo HR
- EmpowerHR (Fusion 5)
- Gusto
- Ignite InfoBright CD (Columnar Database, NuViewHR)
- Insperity
- Intuit Core
- Intuit Elite
- Intuit Premium
- iSolved
- Justworks
- Namely
- OnPay
- Patriot Payroll
- Paychex Enterprise Payroll Services and Software
- Paychex Flex
- Paychex HR Solutions and Services
- Paychex SurePayroll
- Paycom
- Paycor
- Payroll Vault
- Rippling
- Sage Business Cloud People
- Thomson Reuters Accounting CS Payroll
- Thomson Reuters MyPay Solutions
- Trakstar
- Trinet
- UKG (Kronos) Optimum
- UKG (Kronos) UltiPro
- Wave Payroll
- Workday Human Capital Management
- Xero (Gusto)
- Zoho Books Payroll (SurePayroll in US)
As noted earlier, each one of these products deserves a separate column to discuss their features, approach, and applicability to your client base. Above all, most important is your clients’ needs. You see, these payroll systems touch your clients and their employees directly. The payroll portal is the essence of their client experience with your firm. While you may never have the resources or desire to develop a payroll product, the software publisher that provides payroll, PEO, and HR software focuses on this every day. Clients and their employees should have a seamless client experience.
And What Should Your Client Experience be With Your Payroll Offering?
Are you simply trying to get rid of payroll since it is essentially an annoyance and risky? Or do you see payroll to build a deep relationship with the client, understanding one of their larger cost items and most valuable resources? Payroll can be a strategic asset or an overhead expense for you and your clients. Employees of clients can be referral sources based on their client experience OR they could be detractors.
What client experience do you want for payroll? Get a paycheck efficiently in the great barter of capitalism trading labor for money? Or do you want to leverage human capital as effectively as possible while accurately providing compensation, compliance with all taxes, and various benefits, including healthcare and retirement? Wise advisory-thinking accounting professionals want relationships with their clients and their employees, and to not be treated as disposable contractors. Would you like your professional services thought of as an overhead expense that needs to be cut at every possible turn? Short-cutting your payroll service to your clients is throwing away an opportunity to leverage your relationship.
On the other hand, providing relief to payroll headaches could be one of your most effective, profitable recurring services. Or you can choose to have payroll be a commodity that is shopped on the open market. Do you want to supply a commodity, compliance, or advisory service? It is your choice.
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Tags: Advisory, Benefits, CAS, Payroll, Technology
