by Ted Needleman
Payroll services can drive accounting professionals crazy. Mistakes can be costly and the process is time consuming, whether you prepare it manually, use a service bureau or run it in-house.
1099-Etc. & A-T-F
CBS Payroll Services
Payroll Solution for Windows
DacEasy Payroll for Windows V12
PenSoft Payroll Accounting
However, computerizing payroll cuts down on errors, and makes keeping up with depositories of taxes and filing of needed information forms easier, timelier and more precise. This accuracy is a prime reason that most businesses no longer prepare payroll manually.How to implement a payroll system, however, is often the sticking point. Because payrolls must be prepared in a timely manner, many firms and their clients want to minimize the work that is done in-house.
Outsourcing payroll preparation often makes sense, as the service bureau bears responsibility for making sure that the software is up to date, maintaining tax tables and backing up data. That’s why payroll service bureaus continue to thrive.
Service bureaus aren’t the answer for every company. As hardware has become more reliable, and backup easier, many firms and clients are more comfortable having critical data, such as payroll information, in house and under their direct control.
Client or service bureau? In looking for a payroll package, CPAs must first consider whether to install and use the package clients’ offices or install it in their office and process client payrolls from there. Payroll software designed for practitioners allows them to run a payroll service bureau for clients, and includes features not usually found in client-installed, stand-alone payroll.
Some of these features include the ability to run completely unrelated multiple companies, accounting and billing functions that let you track client transactions and create invoices, and the capability of applying optional features, such as direct deposit and self-service.
All of the payroll applications reviewed are Windows-based and most require 32-bit versions of that operating system. Few vendors offer DOS-based solutions anymore, partly because Microsoft Corp. no longer supports that system. Insta-Pay, one of the still-popular DOS-based payroll solutions, was scheduled to be in this review, but its vendor Cheque-Mate, did not provide a test version in time.
We performed all of our testing on a generic system built in-house. Our PC had an Intel motherboard, 512MB of RAM, and a 2-GHz Pentium 4 CPU. Our test platform was running Windows XP Professional, and we did not experience any problems installing or running any of the packages.
We looked at several areas, including ease of installation. All products were easy to install, but configuration can be time-consuming because employee data has to be entered, then verified, then verified by the employee and then corrected. Budget the time needed to do a good job up front.
In the following reviews, we examined a representative sample of different types of payrolls. Some are appropriate for use in your clients’ offices, others for use in your office.
1099-Etc. & A-T-F
Advanced Micro Solutions
After-the-fact payroll is an inescapable part of running an accounting practice, especially at the small to midsized firm. Many clients, especially the "Mom and Pops," like to do their own payroll, often by hand. But many don’t have a clue about filing quarterly 941 and similar payroll reports, making up W-2s and W-3s and determining when to make payroll tax depositories and for what amount.
To accomplish these tasks, the payroll should be reconstructed in your office, usually from the returned check. A better way, if there are not too many checks being issued, is to have the client fax a copy of the check before it is issued. That way, you can "run" the A-T-F payroll almost in real-time.
Most "true" payroll systems can also be used to run an after-the-fact payroll, but it’s not always easy. Advanced Micro Solutions has offered its 1099-Etc & A-T-F package for many years. The A-T-F capability is really an add-on to the basic $65 package, which, as you can tell from its name, is intended to produce 1099s, W-2s and other required forms for your clients.
Getting the full capability from the 1099-ETC & A-T-F software requires purchasing additional modules. The module that lets you use a laser printer costs $65 extra, while the A-T-F Payroll costs another $95.
You can get away without ordering the $95 Magnetic Filing Option and the $35 Forms-Etc option that lets you generate a single W-2 or 1099 without having to go through an extended setup routine, but these are worthwhile additions. Our entire review application, with all of the options, priced out at $355. That’s not bad considering all of the functionality in these products.
Setting up the software was easy, but if your client has a lot of special deductions, it could take time. If you have the Laser Forms option, you can even print checks after entering the payroll, and with MICR fonts and magnetic toner, you can print the entire check, including the MICR line, on blank check stock.
If your needs fit the product, AMS’s 1099-Etc & A-T-F is a good value and a very easy-to-use way to accumulate necessary payroll information and file the required forms.
Abra is one of the best-known names in in-house payroll processing. This application is available integrated with human resources software from Best. That is an important consideration in many companies, especially the midsized to large corporations that are the most frequent users of Abra Payroll.
Abra offers its payroll and HR applications in several different versions, including an online application service provider offering. Also available for in-house or online use is Abra Suite, which incorporates the payroll, HR and even rŽsumŽ scanning and management. There’s also is an optional direct interface between Abra Payroll and MAS90, the accounting system product from another division of Best Software.
We tested the base version of Abra Payroll, but we don’t want to imply that Abra Payroll is low-end in any way. It is priced according to the sizes and numbers of payrolls that it will process, so a direct quote needs to be obtained from Best Software or one of its partners. With all the features available, the software could top $2,000-$3,000.
At the same time, that’s not an excessive amount of money for a high-end payroll system. The Abra Payroll includes the ability to handle pretty much any type of payroll, including union and construction. Multi-company and multi-state capability is built-in, as is direct deposit. Optional modules include MICR, laser generated signature and self-service.
If you order a demo version to examine the application, don’t be misled by the clean, sparse interface. Abra arrays the global task categories along the left vertical edge of the screen, and when you select Payroll, an activity center screen opens up. This screen has a number of selections that include Actions, Processes, Analysis, Reports, Rules and Panels.
Choosing one of these brings up a different set of selections. This approach is a bit different than the standard Windows drop-down menus, but is easy to get accustomed to and navigate.
Abra may be overkill for many smaller clients. If, however, you have midsized clients that would benefit from an integrated HR application, or ones expected to experience quick growth in the payroll area, take a close look at Abra. As a client grows too large for the standard version, it’s a fairly easy transition to Abra Enterprise.
Payroll Connection 2000
CBS Payroll Services
CBS Payroll Connection 2000 is a bit different than the other applications reviewed here. It is not a complete in-house solution, but rather two-thirds of a complete payroll system. In many ways, CBS is providing a service-bureau solution, with the front and back ends located in your or your clients’ offices. This, by itself, would not lead us to cover the Payroll Connection, as a number of national service bureaus also provide similar capabilities.
What really sets CBS apart is that it was acquired by Intuit in June. This acquisition not only backs up CBS Payroll with a major player in the accounting industry, it also provides users of the new Enterprise version of Intuit’s QuickBooks software a payroll provider.
The actual payroll computation and file updating is performed by CBS Payroll on its computers. This accomplishes a number of things. Data entry is a task that’s best performed in-house, a fact that service bureaus recognized decades ago. This gives the client (or your firm) the greatest amount of control over the process, while minimizing the costs. You do this when you want, and how you want.
The same holds true on the payroll application’s back end. By printing reports and checks at your facility, you aren’t at the mercy of a service bureau running out of check stock, or bad weather delaying the delivery. If you are running late with a payroll, you don’t have to worry about missing courier or delivery deadlines.
Having the actual processing performed by CBS Payroll means that they have to worry about tax table changes and data backup. You spread the risk of data loss between your company office and CBS, which gives you and your clients greater protection.
We tested the CBS Payroll Connection 2000. This is really the data entry and report engine. The actual CBS Payroll is a generic, high-end service bureau system. It can be configured for whatever type of payroll, such as a restaurant, that you need it to handle.
There are plenty of custom deduction fields, and you can easily configure a multi-company, multi-state or union payroll. We found the default data-entry screens very easy to use, and there are enough default reports to please even the most picky payroll supervisor.
CBS also offers many options, such as MICR check printing, and links to online HR applications. Net-Pay, another option, lets you perform data entry on CBS Payroll’s servers over the Internet. There’s also a self-service module for companies that want to provide employees with ability to log onto the Payroll system and adjust their personal information.
CBS Payroll is a perfect solution for those who don’t want to move payroll entirely in-house, but at the same time feel uncomfortable with completely outsourcing the application. The only downside is that CBS Payroll represents an on-going expense. But, whether completely in-house or outsourced, payroll will always require an ongoing expense for maintenance.
Payroll Solution for Windows
Creative Solutions Inc.
Creative Solutions is well known in the accounting industry for its popular line of highly integrated accountant-oriented Solutions application line and has expanded rapidly in payroll. In the last year, it acquired both Pro Tym Systems, which developed Thunder Payroll, and UniLink, the accounting systems publisher that also provided a Windows-based payroll system.
CSI will continue to support both of these products for a while, but according to a company spokesperson, neither package will continue to be actively sold. CSI is a division of Thomson Corp., which also owns the publisher of Accounting Today.
Payroll Solution for Windows is a robust and highly configurable midrange payroll system specifically designed for service bureau applications in accounting firms. As with all of the midrange and high-end payroll applications looked at, Payroll Solutions supports multiple and custom pay rates, custom deductions, 401(k) and cafeteria plan deductions, and pretty much any other kind of deduction that you want to provide for your clients’ employees.
There are a comprehensive set of reports, and you can create your own custom reports when necessary either by using the filters provided in the system, or by purchasing the optional payroll reporter, a report generator. Direct deposit, a very popular feature in payroll, is another optional module.
In fact, if you add all of the options, Payroll Solution gets much more expensive than its $1,000 base price. By the time you add the Payroll Compliance Solution (which prints W-2s, 1099s and such), the Payroll Reporter and Direct Deposit, and any state modules (at $125 for the first state and $50 for each state after that), you can easily double the initial base price.
If you will be processing more than 20 clients, or operating on a network, there are additional charges for these features, as well. Though this shouldn’t stop you from considering Payroll Solution, especially if you already use other CSI applications.
While Payroll Solution works just fine as a stand-alone service bureau payroll application, it really starts to shine if you are also using other CSI products such as the Write-up Solution or Practice Solution.
CSI’s applications are all built around a single central database, which provides an incredible amount of integration between systems. If, however, you are not interested in using other CSI applications, you will find that its payroll program offers pretty much the same functionality and ease of use found in several other products covered here.
DacEasy Payroll V12
Most of the payroll systems that we’ve looked at in this roundup are in the mid to high end, with prices starting at over a $1,000, and in some cases, several times that price.
DacEasy Payroll is one of the modules in the DacEasy Accounting system, and can be used as part of the integrated system with the other modules, or implemented as a stand-alone payroll processing application. Priced at under $500, it’s an affordable alternative to a smaller business that wants to implement payroll right now, and perhaps general ledger and other applications at a later time.
The payroll is intended for use by a single company. It can be configured for multi-divisional or multiple location use, but if your client is a multi-company entity, it probably will require a more upscale package. Our review copy offered the standard deductions and the ability to define up to a dozen additional deductions and 30 user-defined earnings fields. 401(k) and Insurance are not predefined, but are easy to add.
There is a nice selection of predefined reports, and Crystal Reports can be used to generate custom reports if desired. DacEasy Payroll can generate a Direct Deposit compatible file, so you can set up this service through a clearinghouse or bank. It does not, however, offer MICR printing.
One of DacEasy Payroll’s big advantages is that it is sold by Best Software’s resellers. If you don’t want to be bothered by installing the software for your client, you can contract a reseller for installation. You may not want to forgo this additional revenue opportunity, but the choice is there.
DacEasy Payroll is really a good choice if you’ll want your client to upgrade to a full-blown accounting system in the near future. The DacEasy Accounting system is full-featured and affordable.
If, however, the client already has an accounting system in place, it will be easier to integrate that vendor’s payroll, rather than DacEasy. DacEasy is part of the Best Software family that includes Best Software Peachtree and the Abra product line. If your client is not going to look for DacEasy as its primary accounting software vendor, you might want to advise them to look at another Best Software offering.
Pensacola Software (PenSoft) offers many different payroll systems, such as ones targeted to health care providers, restaurants or hotels, distribution or manufacturing companies and several generic versions. The version reviewed here is Accounting Edition, which is specifically oriented toward accounting firms that want to offer payroll services. Its features include very easy set-up and the ability to maintain separate complex payrolls for many companies.
Pricing is dependent on the number of employees processed, not on the number of companies, and the base price includes up to 50 employees.
Accounting Edition is intended to be a stand-alone application and does not directly integrate with any specific accounting system. You can, however, import time and expense information from T&B packages, and export payroll information in an ASCII format that can be used with most accounting packages to eliminate re-keying.
Other features that you will appreciate are the ability to produce Job Cost payrolls, Direct Deposit file creation and MICR check printing. Accounting Edition comes with tax tables for all 50 states, and there’s a built-in invoicing capability that makes it easy to bill your clients as the payroll is produced.
As with all of the high-end payroll systems reviewed, Accounting Edition can handle 401(k) and cafeteria plan tracking. We found the reports comprehensive and easy to read and use, and the program prints and prepares all the requisite W-2 and 1099 forms on paper or magnetic filing format.
There’s nothing particularly fancy about PenSoft Payroll Accounting Edition. The interface is straightforward and screens are well laid-out and easy to use. The 177-page manual is not overly illustrated, but is still very useable.
PenSoft doesn’t provide a lot in the way of frills, but the application is nicely designed and implemented. If you want a stand-alone payroll service bureau package, Accounting Edition should definitely be considered.
Time+Plus Payroll is also somewhat different than most of the payroll applications we reviewed. You can purchase a complete turnkey service bureau application or a high-end system for large enterprises.
The pricing reflects this, with a system starting at about $15,000 for the non-SQL Server version, and at $20,000 or more with versions of the Time+Plus Payroll that run under SQL. That’s a lot compared to most of the other reviewed applications, but don’t simply cross it off your list because of the price.
At the heart of the application, all payroll systems are similar in the most basic approach. It’s precisely how those features are implemented and supplemented that make one different and more expensive.
One of the reasons that Time+Plus Payroll is priced higher than the other packages is that it is truly turnkey. Time+Plus Inc. provides software, installation help if needed and marketing advice. It’s similar to a franchise in that the company will not place multiple competing installations in the same geographic area.
Time+Plus Payroll also is different in its features. You need to configure the system for your office (as a service bureau) or your client, but you can get Direct Deposit, MICR check printing, an amazing array of reports and the ability for an accountant to print out client reports in their own offices.
To make time-keeping easier and more accurate, Time+Plus Payroll supports a wide variety of electronic time clocks, and can alert a time-keeping manager when an anomaly occurs, such as someone forgetting to punch out or someone punching out when there is no offsetting punch in. Catching these problems in real-time reduces problems when its time to process the payroll.
If you are considering setting up a service bureau, Time+Plus Payroll can let you set up your payroll clients so that they can perform data entry or paycheck and report printing.
If you are serious about offering payroll in a service bureau environment, keep in mind that software and ongoing maintenance and upgrades are just part of the cost of business. Purchasing a top product like Time+Plus Payroll makes it easier to offer superior service.
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