Oct. 2009

Top 6 Payroll Processing Solutions 2009

Help Clients Tax Plan Every Month

By Phil Britt

The current unemployment rate of 9.4%, a 15-year high, according to the Bureau of Labor Statistics, has forced accountants offering payroll processing services to become more aggressive in trying to replace lost business. Accountants expect the need for payroll processing to increase when the economy rebounds. In the interim, they are gravitating toward the most efficient payroll processing solutions.

"We've lost a number of clients because of the economy," says Kenneth Forman, owner of Kenneth Forman CPA, Mesa, AZ. "Some [former clients] are trying to do it themselves. But it's pay me more, or pay me later, and it costs more later."

With the ATX & TaxWise Payroll processing solution, Forman has everything ready for tax season. Already a user of ATX Total Tax and Accounting software, Forman added Client Write-Up for its payroll processing functionality.

"It enables me to be much more efficient," he says. "Thanks to the dropdowns, I am able to input information much faster."

Attracting New Business
A lot of firms offering payroll processing services are experiencing lost clientele, says Dave Olsen, director of product management for CCH Small Firm Services, provider of ATX and TaxWise Payroll. "But losses can be offset by landing start-up firms.

"New start-ups tend to grow when unemployment rises because former employees strike out on their own. Most of them look to accountants for assistance. They tend to need payroll preparation and compliance reporting and tracking."

Competition for these new prospects makes efficiency key. "We're always focused on feature enhancements," Olsen says. "We want to help them speed up the [payroll handling] process so that they can have time to focus on scaring up new business."

Among the efficiencies from which accountants can benefit is one-click entries for check preparation. "This feature handles deductions automatically and eliminates possible errors from manual entry," says Dawn Evanoff, product manager for CCH Small Firm Services.

Charging Less
Despite the weak economy and increased unemployment, some providers of payroll processing services are attracting enough new clients to see a net growth in business.

"The economy actually has helped our business," says Carmen Barmakian, owner of On-Time Payroll Services, Waltham, MA. On-Time uses Payroll Relief from AccountantsWorld.

A couple of her smaller clients hurt by the economic downturn are turning away from larger accounting firms, Barkamian says. "Bigger companies have a lot more overhead, so they have to charge more for their [payroll processing] services."

On-Time doesn't have the overhead of some of the larger firms because the Payroll Relief product is online.

By charging less than some of her competitors, Barmakian can attract more businesses. "Payroll Relief is very cost-effective to run," she says. "Their integration with QuickBooks, which a lot of our customers use, is a good selling point."

Value-added services are another selling point for accountants seeking to attract customers. "You try to help companies tax plan every month," says independent practitioner Christine Paoletti-Krim, CPA, who uses A-T-F Payroll from Advanced Micro Solutions. "You can lower or increase the withholding depending on their needs."

Maintaining Clientele
"The demand is relatively inelastic," says Alan Goldberg, CPA, president of Nanny Tax, Inc., a national payroll tax service for household employers. Goldberg points out that his client base consists of high-income earners who are less likely to lose jobs.

"Growth might be slower, but there's been no drop-off in clients," Goldberg says. "Most of my clients believe in efficient use of their time. And doing one's own payroll doesn't fall into that definition."

Goldberg also values efficient use of his time, which is why he uses the Advanced Micro Solutions product. The support the company provides Goldberg doesn't hurt either. "For a smaller firm, it's like having a technology partner. They're very receptive to customer suggestions, and they have a good schedule of regular updates. If I call them and about adding a feature the next quarter, they usually have it the next day."

Among the changes that Advanced Micro Solutions has made that have helped Goldberg increase efficiency are mailing and letter-writing functions and the ability to pull in a wide variety of customer data.

Like his clients, "my most valuable asset is my time," Goldberg says. "Whenever I save a minute, I make money."