Have you ever processed an entire payroll while on vacation? Approved a timesheet while commuting to work on the train or perhaps from the beach in Nassau Bahamas? A few years ago these scenarios would have been laughed at by most business owners. Today, these processing options are realities made possible with the advent of both the Internet and online payroll processing services.
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Utilizing widely available high-speed (and secure) data connections, these programs enable any Internet-connected business to safely and remotely enter payroll data, generate checks, tax reports, tax filings, and tax deposits and integrate with third-party accounting systems. This happens all without having to be inside a traditional office.
One of the first concepts that a company has to "buy off" on is that these transactions are secure and employee data remains confidential. There are no companies looking to transmit their confidential payroll data unless they are certain the transmission is protected against interception by hackers or thieves. Today's transmissions over the Internet are protected by special Web technology referred to as SSL transmission standards. SSL stands for Secure Socket Layer protocol and is a method designed to prevent interception of data by unauthorized parties. This SSL protocol is widely used and has become the de facto standard for transmitting sensitive data securely over the Internet.
To fully understand the potential benefits, consider whether any of these situations regularly occur in your company?
* An employee needs copies of a pay stub for a bank. The employee forgets to ask for them until Friday at 4:15 p.m., and wonders (a.k.a. demands) if you might possibly have the stubs available for him by the end of the day because they're going to the bank right after work.
* A temporary employee (who only worked for three days) lost a W-2 from seven years ago and arrives in your office asking for a copy, naturally believing that it's the duty of your accounting department to maintain all the historical documents onsite for ready retrieval and to drop all tasks and immediately make photocopies of those documents.
* An employee (or 15) comes into the office to ask what their withholding status is. More than a few of them may want to make changes to their status. Each request requires the attention of your accounting department and takes staffers away from more important tasks.
Each of these above scenarios is easily resolved when your payroll processing is done via an online processing solution offered by one of the following companies.
The key benefits to online processing extend far beyond an accurate payroll and timely payment of withholding taxes (as all service processors offer).
In reviewing different services, here are some desirable features to keep in mind:
Remote time entry. Each online processor uses the Internet to connect to their services and process some (or all) of your payroll. If you expect to be working from many different locations, you'll want to ensure that the service offers a completely remote solution which does not require any software to be loaded on your desktop. These services are usually available via your Web browser and offer a completely secure connection. Not all systems are completely browser based, so be sure to inquire.
Historical document retrieval. Once you have completed a payroll year, make sure all the documents can be reprinted at any time. This would include payroll tax returns, employee quarterly reports, W-2 forms, W4 information and customized reports. The best systems have a separate area of their service set aside solely for archiving documents.
Employee self-service. Stop providing concierge services to your employees. If you provide them with a login to your payroll system, they'll be able to keep their employment records updated with changes to tax statuses as they occur as well as deduction information. Nearly all remote services allow the employee to retrieve pay stubs or W-2 information from any years where historical information exists. Just think of the time savings you can reap by allowing the employee to retrieve this information themselves. In addition, many services will electronically generate a pay stub and email it to your employee. This all happens with zero configuration or software on your internal computer systems.
Integration to accounting systems. Both General Ledger and Job/Project Tracking Online payroll services almost always lack their own general ledger accounting system. And almost none offer a standalone job costing or job tracking solution. So what you should strive for is a way to extract the journal entries and job data for posting to your accounting system. This is not available with all online payroll services. Some online payroll services only support the most widely available financial systems such as QuickBooks or Peachtree. Be sure to ask about the availability of an interface to your financial system. Check references on any interfaces the vendor claims to have. If they are going to build an export file, make sure you're clear on both the cost and the exact output to be expected via the export file they'll create.
Paychex is a large nationwide provider of traditional outsourced payroll services. With offices nationwide, its clients range in size from start-up to multiple location enterprise level companies.
Typically, the Paychex client either phones in weekly payroll information or keys the data through a remote session which connects to the Paychex main computer system.
Because Paychex is a large provider of payroll processing, it can offer a host of complimentary services. If you need 401k or Human Resources assistance, Paychex has a solution to fully or partially replace your existing internal efforts in that area.
What the Paychex online platform presents is the ability to enter time remotely to their system as well as generate a multitude of reports. The reports (and data entry) are all in the format to which Paychex customers are accustomed.
Upon the initial login to your Paychex Online account, you're met with a message board with news from both your local Paychex branch as well as notices of online training classes which are offered regularly over the Internet. Separate sections enable you to view reports and enter time. The data-entry screens are simple, though not open to user customization.
Reporting is done through either a PDF file format or the Paychex Report Manager, which is a separate piece of software you must install on your computer prior to viewing any reports. Time tracking is available through the Time in a Box application, which offers time clock data collection. There is no employee Web entry of time available.
With the breadth of payroll services available, Paychex is a good solution for nearly any sized company. You can start out phoning in your time to a local representative, and eventually graduate to performing the data entry yourself. All along the way you have the benefit of the extensive customer support and wide range of payroll service add-ons available.
The PayCycle mission is simple: It would like to convince CPAs that payroll is profitable, simple and easy to do for their clients. To this end, the company has designed every step of its system to make the payroll processing job easier for CPA firms of all sizes and experience levels.
There are two ways that CPAs can work with PayCycle. Either they can refer the client to the service (retail) and have the client deal directly with PayCycle or they set up their own firms as processors (wholesale) and use the PayCycle serve as an unbranded method for entering data and servicing their clients' payroll needs.
Completely Web-based, the system allows you to check and process your payroll from anywhere with no software download required. PayCycle is geared primarily toward CPAs with an interest in either processing their client payroll or referring their clients to PayCycle for online processing.
The CPA who uses the wholesale service will not see any PayCycle branding and all links will point people right back to the CPA firm. Typically, the CPA will have clients do the keying themselves, however in some instances the CPA firm could elect to key data for the client.
Data export is supported to both QuickBooks (all versions) and Microsoft Money. Additional export is provided via customized reports or the use of an intermediate file in Excel. When exporting to QuickBooks, full general journal entry detail is retained.
When the payroll is processed, employees receive an email alert telling them that their check is ready. When employees log in, they receive an electronic version of their paystub, and can also log in remotely to retrieve past pay stubs. This electronic pay stub is a great benefit to employees who might not want to leave paper records of their pay sitting in an office desk drawer.