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    30 Replies Latest reply on Mar 17, 2009 12:27 AM by intellivolve

    Payroll - best options for a small business

    VinoNow Newbie
      I have 3 employees and was considering using ADP to do our payroll processing. Not sure if there's better alternatives as it's $55-75 per pay period (for us that is semi-monthly) so we'll be spending $150 per month on it. Are there better alternatives that aren't too labor intensive?
        • Re: Payroll - best options for a small business
          GBolden Newbie

          Yes, there are other companies that offers outsorucing payroll such as ADP and Paychex. My firm G Bolden & Associates offers it as well. Check with some of your local CPA firms. I have clients that are not in my city, but I handle everything virtual.
          • Re: Payroll - best options for a small business
            DallasPayroll Newbie
            There are many many payroll services. Our firm, Dallas Payroll provides the same service as ADP and is much more cost effective. You can check us out at http://www.dallaspayroll.com. To find a local payroll service I would recommend a Google search for Payroll Service in your city. Example: Payroll Service in Dallas.
            • Re: Payroll - best options for a small business
              gemwest Newbie
              Look into Paychex as an alternative. We have used them for a number of years and they are competitive, accurate and very flexible.
              • Re: Payroll - best options for a small business
                fjuarez Newbie

                Hi,
                You might also want to try Ameri-Chex they have been very reliable, reasonably priced and good customer service.....
                • Re: Payroll - best options for a small business
                  aityena Newbie
                  Be very careful who you trust your payroll processing to. The industry is not regulated, and if there is a problem, you are on the hook with the IRS and your employees, and not the payroll processor.

                  We found this out the hard way. Several years ago, we signed up with a small payroll processing outfit, because they were willing to work with our back office automation needs and about 20% of what ADP charged. After an initial rocky start to get things lined up between our system and theirs, it went pretty smoothly...for four payroll cycles (monthly). Then they missed a tax payment. We called up, they already knew about it, and they paid within the week and the penalties and interest. We started watching the transactions carefully. Two months later, they filed Chapter 7.

                  And the owner took all our tax payments that month with him.

                  If you find yourself in the same situation, let me save you some time. Just pay the IRS directly, pay your employees again, then immediately find the bankruptcy case and get in touch with the assigned bankruptcy trustee. We wasted a lot of time finding out that unless you are talking in amounts of greater than $500K, the IRS will not help with either pursuing the perp, or extending any forebearance measures; the state attorney's office will be completely uninterested; likewise the FBI (interstate funds transfer) or US Postal Service. Small business owners are completely on their own.

                  What saved us in this incident? My "business paranoia", which caused me to insist:
                  1. We set up a Bank of America "private account", and made our existing checking account a "public account". From that time onward, literally the only entities who know about the private account are BofA and the owners of the company; it is never divulged elsewhere under any circumstances. The public account became known as the "E-xfer", or "electronic transfer" account. Our banker was very helpful in getting this set up for us, and it didn't cost us anything extra with our existing commercial account because we kept a large enough balance.
                  2. We still handled all actual payroll issuing, and "firewalled" the payroll processor to just handling the taxes, which required special procedures to set up on both sides because the default payroll processing model is all funds are deposited with the processor and the processor cuts the checks or generates the direct deposit.
                  If we had set up the way they normally expected, our entire payroll would have disappeared that month. We would have never survived that. It put a pinch on our cash flow, but we still survived (and are thriving today). As luck would have it, I had a project that put me in the city of the payroll processor's offices as this was unraveling. I was able to find the office and confront the owner on the very day he was moving out of the office, but it was an unsatisfying encounter (he lawyered up). We're still trying to recover the funds from him by working with the IRS.

                  After the initial scramble to pay the IRS, we turned back to our CPA to temporarily handle payroll for a few cycles while we surveyed the payroll processor industry. We now process our payroll through PeachPay, after adding the following requirements to the above.
                  1. Verify that at no point is our data ever shipped offshore. We're scared witless that the SSN's will be hijacked in a mass identity theft, and our only recourse is retaining legal counsel in a foreign nation. This is why Bank of America payroll processing lost out in our survey; they could not demonstrate satisfactorily that the data does not ever leave the country.
                  2. "Two strikes" rule: one anomaly in processing allowed per year; terminate immediately on second anomaly in the year.
                  3. Run the check cutting during the first six months of payroll cycles completely by ourselves. We insisted upon being able to use the payroll processing service as just a fancy "generate the numbers" system for the first six months. Each cycle we would plug in the wages into the payroll processor's web site and copy out the taxes, withholdings, etc., then manually go to EFTPS (for the IRS) and state unemployment insurance web sites to file the payments (which were electronically linked to our public account). This was a real pain, and if I had to do it all over again I would hesitate a long time before committing to it.
                  Hope this helps, I never want another small business owner to have to go through what I did.

                  Even after all these precautions, we still worry about this, although practically we have settled for the status quo for the time being. Our nightmare scenario goes like the following. Whoever we pick, no matter how big or how flawlessly they have processed for many others for years and years, decides one day to send a portion of the processing offshore. Unbeknownst to them, the folks offshore scoop up all payments in one of the payroll cycles (likely end of calendar year when big bonuses are commonly transferred around). We get left out in the cold again, but this time there isn't even the emotional satisfaction of knowing that the perps could spend time in Club Fed, because it happened offshore.

                  There is another area for fraud that could be fixed in the shorter term. We wish Bank of America (or some bank, somewhere) would offer a self-managed electronic transfer accounts system, so we could create on demand new accounts that are tied to our private/primary account, but always defined with a maximum cap and optional expiry date. We could then control which account each vendor has access to, how much they could draw out, and optionally how long before the account withdrawl permission drops back to zero. Today, more than just a few vendors have shared access to our E-xfer account, we have to manually manage transfers from the private account, and I know it is only a matter of time before an excessive withdrawl is performed causing a cascade of problems for our other vendors.

                  Longer term, as we continue to grow, we're working out how to inexpensively insource this function, much as we prefer to outsource it. The chain of data custody is simply too obscure and unguaranteed for our comfort level going forward, and we're always going to be the liable party in the immediate term (and for all practical purposes, forever). The capacity for fraud is simply too great to ignore, and even with the big processors little guys like us just get trampled when push comes to shove. My preference is a market-enforced regulation, but I've yet to find a payroll processor who is bonded and insured with a Lloyd's-grade underwriter with a gold-plated Fitch rating. I'd really rather be able to make a claim on someone who absconds with
                  the funds and get immediately paid by an underwriter (who in turn will
                  put their significant resources to work on finding and apprehending the
                  perp). In the absence of that, I would settle for a regulatory environment that is actually enforced.
                  • Re: Payroll - best options for a small business
                    LUCKIEST Guide
                    You have received some very good answers to your Payroll question.
                    This is a good time of year to start with a payroll processing service. Going live Jan 1 would be great.
                    Another thought to save money. Switch to a bi - weekly payroll. That would cut your costs in half.
                    As you can see there is NO one option. ADP has a great track record, has been around a long time,
                    Do you have an accountant?? Where is your company located??
                    Good luck, LUCKIEST
                      • Re: Payroll - best options for a small business
                        DallasPayroll Newbie
                        aityena,

                        I am so sorry to hear about your problems with a local payroll service. This is always a possibility with a service that transfers your payroll tax payments from your account to their account and then from their account to the IRS. Any service that processes tax payments in that manner is not only setting you up for possible IRS liabilities but is also useing your money to reap additional profits from the interest earned on your funds. This is not only a problem with a small service, but you are not protected with even the large firms. Even large companies can fall from grace (ENRON).

                        Our service does not process tax payments in this manner and many other services have recognized this liability. We calculate and authorize the IRS to draft your account directly. This is the best way to protect the payroll service and the customer. With this type of processing, you can reap the benefits from the customer service, special processing capabilities, and personal attention that can only be offered by the smaller companies.
                      • Re: Payroll - best options for a small business
                        Ed O'Gee Adventurer
                        BofA has a free service for it's customers, most of the major banks have a free or reduced price service that is perfect for business owners who don't have complex payrolls. If you have some complex needs I'd take the suggestion of others can call Paychex or ADP
                        • Re: Payroll - best options for a small business
                          SOLUTIONSHR Wayfarer

                          Hi, just saw your post. I am one of the managing partners in SOLUTIONS Human Resources. We provided customized Payroll, Human Resources and Training solutions for small businesses. We are often less expensive that some of the larger companies like ADP and I fell we provided superior service. I would be happy to provide you with a quote. You can visit our WEB Site at www.solutionshr.com.
                          • Re: Payroll - best options for a small business
                            Payroll Place Newbie

                            ADP prices are way too high along with many other payroll companies. I have a payroll business called Payroll Place and our prices are MUCH lower than ADP's (less than half). One thing that separates my company from the rest is it does not matter if your pay cycle is weekly, bi-weekly, semi-monthly, or monthly. The price is still the same. Payroll Place is a full service payroll but very affordable; only a fraction of the price that other companies are charging.

                            If you are interested in learning more about Payroll Place or getting a quote, you may visit our website at http://www.payrollplace.com or call 866-535-1817.

                            Good luck to you!

                            Kathy
                            Payroll Place, LLC
                            Phone: 866-535-1817
                            Fax: 773-314-0413
                            mailto:info@payrollplace.com
                            Visit our website at http://www.payrollplace.com/
                            "Finally...A payroll service you can afford"
                            • Re: Payroll - best options for a small business
                              DallasPayroll Newbie
                              Not only are ADP's prices too high, but they are useing your payroll tax money to pad their prices. Dallas Payroll is also a payroll service that charges much less than ADP and provides better customer service. Plus we don't hold your payroll taxes in our bank account. We never transfer payroll taxes from your bank account to our bank account. We also develope and maintain our own software, so we can make adjustments to accept just about any form of data file for input. We have been in business since 1971 and are owned and managed by a CPA.

                              Visit us at http://www.dallaspayroll.com give us a call at 214-553-0700
                                • Re: Payroll - best options for a small business
                                  CorpCons08 Ranger
                                  How do you know this about ADP?
                                  I'm curious to learn this...

                                  CorpCons08
                                    • Re: Payroll - best options for a small business
                                      DallasPayroll Newbie
                                      I have worked with companies that use ADP and Paychex to outsource their payroll. It is a very common practice for a payroll service to draft customers accounts for payroll taxes and processing fees. Smaller companies taxes are not due until the 15th of the following month, however, a payroll service will draft the customers account and hold the money in their own account, earning interest, until the taxes are due the following month, or even 30 days after the end of a quarter. This is very very dangerous, see the above post by "aityena" about losing their money when the payroll service did not forward the payment(s) to the IRS or state.

                                      I use to work in public accounting and saw this first hand. I still help some companies with bank reconciliations and accounting questions, and still see the payroll service draft the account for taxes that are not due for months.
                                        • Re: Payroll - best options for a small business
                                          LUCKIEST Guide
                                          It is always good to get inside information on payroll and payroll companies.
                                          Thank, LUCKIEST
                                          • Re: Payroll - best options for a small business
                                            CorpCons08 Ranger
                                            Wow...good to know Dallas. Appreciate the information.
                                            It's interesting to see how the payroll companies are playing with due dates.

                                            CorpCons08
                                              • Re: Payroll - best options for a small business
                                                bonnie1110 Wayfarer

                                                One of the great things about our payroll service is that we do not "impound" the client's payroll taxes and earn interest off of it. Our clients keep the payroll tax money in their bank accounts which increases their working capital. When it's time to pay their payroll taxes we send our clients an e-mail reminder of what date the money is due, how much is due, and when it will be deducted from their bank account and paid directly to the IRS. ADP, Paychex, Surepayroll, and many other payroll services all "impound" the tax money and then you have to just hope that they will pay it on time.

                                                Another great service we offer is an affordable way to provide the mandatory workers' comp benefits for your employees. Instead of paying high workers' comp amounts for "estimated" payroll, our service has partnered with a very large insurance carrier that offers our clients the opportunity to pay workers' comp based only on the actual payroll run. This saves hundreds of dollars and eliminates harsh audits at the end of the year.

                                                Ace Business Services
                                                www.acebusinessservices.com
                                                  • Re: Payroll - best options for a small business
                                                    Elite1 Adventurer
                                                    I am a tax preparer/bookkeeper and have just started offering payroll services to my existing clients. I am currently considering the expansion of my payroll services to other companies in my area. I am still researching pricing, worker's compensation insurance options, etc. Any advice would be welcome.

                                                    The point of my post is..I give my clients the option of paying their accrued tax liabilities via the IRS's EFTPS as they accrue vs when they are due. This way, they do not have a large liability at the end of the period. If they do not opt for this service, I enclose a statement of accrued liabilities with each payroll statement so they are aware in advance. This way there are no suprises or shortage of funds. I would think it would be illegal to hold their funds until tax payments are due.
                                          • Re: Payroll - best options for a small business
                                            bonnie1110 Wayfarer
                                            FCP,

                                            If you are looking for high customer service and low-cost, I suggest you contact me at lavonne.clark@acebusinessservices.com. We provide payroll processing, Quarterly payroll tax processing, W2's and 1099 processing, and Direct deposit or Paper check offerings. We do not retain your quarterly payroll tax money. The money stays within your business until it time to be sent to the IRS. We send the payment electronically to the IRS or you have the option of having us process the forms and you mailing it yourself. We provide the option of you entering the employee hours yourself to ensure accuracy or we can do it. You would also be granted 24/7 access to your Payroll and Tax reports, which is password protected. Your employees would be able to have access to their paystubs and the ability to update their personal information. Our payroll processing can also be integrated into your accounting software. We eliminate your high cost of using an accountant or an expensive payroll outsourcing company as well as the time you would need to spend by doing it yourself with Quickbooks or Peachtree. We can provide what ADP, Paychex, Quickbooks, and Peachtree can not, excellent customer service and low-cost. With that being said, I have the solution to your hassles and headaches of payroll, taxes, and many other business services. We do not go up on your cost as you add employees, it actually goes down. This helps as your business grows. Our standard of service is always higher than our price.

                                            I look forward to meeting you,

                                            Lavonne Clark
                                            Ace Business Services Report as inappropriate
                                            • Re: Payroll - best options for a small business
                                              bonnie1110 Wayfarer
                                              Corp,

                                              If you are looking for high customer service and low-cost, I suggest you contact me at lavonne.clark@acebusinessservices.com. We provide payroll processing, Quarterly payroll tax processing, W2's and 1099 processing, and Direct deposit or Paper check offerings. We do not retain your quarterly payroll tax money. The money stays within your business until it time to be sent to the IRS. We send the payment electronically to the IRS or you have the option of having us process the forms and you mailing it yourself. We provide the option of you entering the employee hours yourself to ensure accuracy or we can do it. You would also be granted 24/7 access to your Payroll and Tax reports, which is password protected. Your employees would be able to have access to their paystubs and the ability to update their personal information. Our payroll processing can also be integrated into your accounting software. We eliminate your high cost of using an accountant or an expensive payroll outsourcing company as well as the time you would need to spend by doing it yourself with Quickbooks or Peachtree. We can provide what ADP, Paychex, Quickbooks, and Peachtree can not, excellent customer service and low-cost. With that being said, I have the solution to your hassles and headaches of payroll, taxes, and many other business services. We do not go up on your cost as you add employees, it actually goes down. This helps as your business grows. Our standard of service is always higher than our price.

                                              I look forward to meeting you,

                                              Lavonne Clark
                                              Ace Business Services Report as inappropriate
                                              • Re: Payroll - best options for a small business
                                                Fact_Finder Adventurer
                                                We have been using the B of A "Easy Online Payroll" Service for about a year an a half and have been happy with it. Although, it's not free as someone mentioned earlier (at least for my accounts) the charge is very reasonable (I think in the $15.00/month range-requires B of A business chekcing). Because our employees are paid via direct deposit into B of A personal checking accounts, there's no additional charge for that (or hard checks).

                                                The service handles all the Federal filing, withholding, and tax payments electronically. Depending on the state where you're doing payroll they'll either handle all that electronically or provide you with completed forms that you'll have to print and file manually.

                                                We've been happy with their customer service. They were particularly helpful when we had to file an amended 940 and pay additional tax when we forgot to enter a manual bonus we had paid to two employees at the end of the year.

                                                HTH
                                                • Re: Payroll - best options for a small business
                                                  lindas.press Adventurer
                                                  I currently use Payroll Mate payroll Software. I am very satisfied with their service. It is very affordable and easy to use. Furthermore, it generates and prints W2s, W3s, 940s, 941s, and 944s. Also, it produces nine customized reports. You can download a thirty day trial of Payroll Mate on their website http://www.realtaxtools.com.
                                                  • Re: Payroll - best options for a small business
                                                    intellivolve Newbie
                                                    VinoNow:

                                                    Most small business use Quickbooks. They have a great payroll program. I've been using them for about 6 years now. I've had no major problems. Customer service has been good with no problems. As far as payroll the support has been US based support.

                                                    Good luck,

                                                    George

                                                    www.intellivolve.com