Payroll Thrives on
the Internet: Dot-coms may have
Burst, Online Payroll Processing is Alive and Well
One of the most surprising aspects of the dot-com bubble
burst is the survival of Web-based payroll processing. Ever increasing in popularity,
there are an abundance of Internet-based service providers that market a range of payroll
solutions to small and medium-size businesses.
One reason for this popularity surge may be the comfort
(trust) factor. In the early days--when traditional service bureaus were the modus
operandi--accounting firms and clients alike appreciated the safety and convenience of
outsourcing payroll processing and avoiding the liability for federal and state tax
collections. Trust in these providers mounted, until outsourced payroll became the
preferred approach for many businesses.
Web-based providers capitalize on this comfort level, but
also provide convenience, offering the same services as traditional service bureaus, but
utilizing the Internet. They offer anytime, anywhere access to payroll information,
surpassing the advantages of traditional providers and even office-based systems.
Indeed, the five most emphasized attributes of Web-based
payroll providers--flexibility, freedom, control, accessibility, and security--are not all
available with most conventional offerings. Flexibility allows you to maintain online all
the data necessary to manage your payroll and choose between different set-up and
processing options and methods of payment, from direct deposit to debit card. Prior setup
options can be changed in a matter of minutes.
Freedom allows authorized users (control) log-in capability
anytime day or night and eliminates scheduling and data-entry timing issues. Users are
given different levels of access depending upon their job responsibilities. Payroll
administrators typically log-in through a different screen than employees.
Accessibility gives employees immediate access to their own
paycheck and pay history data. The employee, eliminating the burden on the payroll
administrator, easily makes changes to W-4 and address information.
Security involves password protection, data encryption,
firewalls, and automatic input confirmation to ensure that only authorized personnel can
access your company's payroll information. Notification by email occurs anytime payroll
modifications take place and automatic log-out prevents unauthorized users from accessing
the information when you are not around.
Web-based solutions typically require little, if any,
software installation or hardware investment, and minimize initial setup and configuration
activities. In fact, with most products it is possible to enter employee information and
process your first payroll within an hour.
Once enrolled you simply log-on with pre-approved security
information and enter employee name and address information, pay rates and frequency, and
tax status, deductions and benefits. Next, you choose from processing methods that may
include individual timesheet entry, multiple employee entry, and even electronic import of
pay information from an external source. You then review, edit, and approve the payroll
calculations, submit the payroll for processing, and view or print the pay period reports.
Checks are automatically printed and direct deposit
accounts updated. Federal and state tax reports are prepared, reconciled, and forwarded to
the appropriate agencies. Emails are sent updating payroll administrators on the
completion of these tasks.
This simplicity in set-up and processing has its drawbacks.
Most products reviewed lack the features, functionality, customization, and reporting
capabilities of traditional office-based products, which have evolved over the years to
meet the needs of companies with several hundred employees. These limitations are the
primary reason some Internet-based providers target their products towards companies with
fewer than 100 employees. The few capable of meeting the needs of larger organizations
offer more sophisticated set-up and reporting choices than the rest of the pack.
Web-based payroll is not foolproof. More than once, when
trying to log-in, I received the message "Online Payroll is currently unavailable due
to daily system maintenance. Please check for service availability at a later time."
Backup plans still need to be in place. But overall, access to data and processing
reliability was quite impressive.
The products reviewed offer online demos and test companies
for practice. Peruse them carefully to get a feel for navigational intuitiveness. Some
even offer free trial versions to try for a month. Areas of differentiation among the
different products are few, but include a variety of payroll processing methods, the
number of available reports, and import-export capabilities. A few offer employee
self-service options, a feature I would like to see become standard. Custom screens and
reports are also more common than they were a year ago.
The trend is clear: Web-based payroll adoption shows no
signs of slowing and may soon overtake office-based systems. Your company will need to
decide if the convenience of Web-based payroll outweighs the more robust features and
reports found in traditional packages. As Web-based products continue to increase in
popularity and acceptability, they will bridge the features and functionality gap, further
blurring the distinction between Web and office-based payroll solutions.
CBS Net-Pay
Upon log-in, the "What's New" button in CBS
Net-Pay updates the user on any developments that may affect the current pay run. The
screens use a series of tabs to navigate through the steps of the payroll process in an
extremely intuitive fashion. These tab choices include Company, Payroll, Employee, and
Reports. When each tab is highlighted, additional navigational icons appear across the top
of the screen specific to each choice.
I found this product to be one of the most intuitive and
feature rich of those reviewed. Reporting capabilities are phenomenal and the ability to
customize the pay information screen is valuable. CBS Net-Pay is an excellent Web-based
solution that takes major strides at closing the functionality gap between Web-based and
traditional office-based solutions.
InterPay
InterPay offers several payroll service options including
payroll, employee benefits, and management reporting. With InterPay Online, the new online
payroll application, the online payroll log-in screen prompts the user for client number,
user name, and password. The welcome screen offers very concise navigation via five
selections: Client, Employee, Payroll, Reports, and Security.
InterPay is easy to navigate, simple to use, and
functionally solid. Standard reporting capabilities are enhanced with export capabilities.
InterPay provides nice entry-level functionality for employers with I to 100 employees,
without intimidating smaller organizations making their first leap into the world of
online payroll.
Paychex Online
Paychex Online makes a bold attempt to match the features
and functionality of Paychex's service bureau. As a result, this product offers
flexibility and sophistication virtually unmatched by the other vendors. The tradeoff is a
product that is more time consuming to set up and complex to use.
Paychex Online comes closest of any product reviewed to
bridging the features and functionality gap between Web-based payroll and office-based
systems. Its sophisticated data-entry screens combined with its breadth of reporting
position this solution as a candidate for companies of any size.
PayCycle
PayCycle's target market is businesses with fewer than 20
employees. Its Web interface features an innovative to-do list and email reminder
approach, which guides the user through the payroll process. The steps include Pay Day,
Taxes and Forms, Employees, Account, and Reports. Clicking on the to-do list button
displays outstanding items for completion.
PayCycle is not available in all states. Services are
provided in Arizona, California, Florida, Georgia, Illinois, Massachusetts, New Jersey,
New York, North Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin. New
states are being added fairly rapidly, however.
Powerpay
Powerpay offers a sophisticated feature set for an online
payroll provider and targets companies of up to 100 employees. The log-in screen prompts
for user and company password. The main screen offers several tabs including payroll,
employees, reports, company, and human resources. The HR tab provides data exchange
between the Powerpay payroll and human resource modules.
Powerpay's versatility will easily accommodate the needs of
its target market. The ability to import and export payroll data and reports provides
additional functionality that positions Powerpay as a strong contender in the online
marketplace.
PowerPayroll
PowerPayroll is designed for businesses with fewer than 100
employees, or large companies with multiple small work sites. PowerPayroll requires a
unique corporate ID, user name, and password to log-in. You are then provided with a
descriptive table of contents that allows access to any of the key features, which include
employees, payday, tax calculations, company, reports, pay view, customer corner, and
employee self service.
PowerPayroll is somewhat limited in its reporting
capabilities, but compensates nicely by offering a wide variety of processing options. The
employee self-service feature helps favorably position it to capture a fair share of the
online market.
SurePayroll.com
SurePayroll is impressive from the moment you log-in. The
simple-to-navigate interface displays multiple tabs that offer access to its features.
These include the Account Center, Payroll, Reports, Employees, and Company. The Account
Center display includes the status of the upcoming payroll and memos reference what next
actions to take.
Especially nice are SurePayroll's self-service aspects to
give employees direct access to pay information. Its simplicity in set-up and processing
will impress smaller organizations with basic payroll requirements.
Copyright 2002 Gale Group, Inc. ASAP
Copyright 2002 Thomson Financial Inc. Accounting Technology March 1, 2002,
BYLINE: Barry Knaster. CPA/CITP, specializes in providing technology consulting services
for businesses |