Thinking about outsourcing payroll? Looking for payroll service reviews? Using a small business payroll service is a no-brainer. We discuss payroll outsourcing and highlight some of the best payroll service firms, including our favorite, online payroll service SurePayroll, as well as ADP, Paychex, and Paycycle.
Whether you process payroll manually or use a payroll service, the time is right to reevaluate your payroll processes - as the new year approaches, small business payroll outsourcing options are better than ever.
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Are you bogged down with tedious, time-consuming administrivia that prevents you from focusing on your core business? Instead of growing your business, are you suffocating under a pile of mind-numbing paperwork?
Join the club. Most small business owners wish they had more time to focus on growing their business. The solution to the problem is to outsource those things that take up your time but don't really help to grow the business. Outsourcing payroll is an easy one. If you're tired of all the headaches associated with payroll, it may be time to take a look at outsourcing payroll.
Processing payroll is a pain. If you process payroll yourself, you've got to keep track of payroll regulations and changes in withholding tables, a time-consuming task. Calculating the actual payroll amounts and deductions is equally tedious - it's very easy to make a mistake.
Then, there's the arduous chore of writing checks and making all the proper quarterly and end-of-year filings for federal, state, and local payroll taxes. It's not uncommon for small businesses to spend two to three hours processing each payroll if they do it manually.
Mistakes are costly. Employee morale dips when you give an employee a check or a W2 with errors - they quickly lose faith in management when that happens. They may forgive but they don't forget.
File late or with an incorrect amount and you'll have to pay a payroll penalty. Every year, four out of ten small businesses pay an average payroll fine of $845 for payroll errors. When you add it all up, that's billions of dollars in payroll fines.
Plus, there are other payroll fines that penalize you if you don't keep good payroll records. California passed a law that imposes a $750 payroll fine on small businesses that aren't able to quickly produce accurate payroll records upon an employee's request. Experts believe that many other states will follow with similar legislation.
When you consider these payroll penalties and the value of your time, processing payroll internally can be a very costly proposition. Even if you're already outsourcing payroll, there may be room for improvement. Payroll services change over time, and there are new payroll services that are worth checking out.
To be sure, if you've already outsourced payroll, it's worthwhile to consider whether you're current payroll service is giving you everything you want. Payroll service offerings today are better than ever, and now is the right time to be thinking about making a switch to a new payroll service.
When Should I Outsource Payroll?
The end of the year is the best time to sign up with a new payroll service. In fact, it's estimated that 60% to 70% of the small businesses that decide to outsource payroll each year do so effective January 1.
That's because you and your new payroll service provider start the new year with a clean slate. There's no payroll history to transfer over to the new payroll service. You can change payroll services after the new year starts, but it requires more paperwork. Now is the time that it is quick and easy to get started with a new payroll service.
What's New in Payroll Outsourcing?
The Internet has greatly improved the process of outsourcing payroll. With SurePayroll's online payroll service, for example, you can enter and view payroll information from anywhere at anytime, as long as you have access to a Web browser.
Once you enter your payroll data, the Web-based payroll service automatically calculates, deducts, pays and files all federal, state and local taxes. Paychecks can be printed on your laser printer or can be routed to your employees' bank accounts via direct deposit. W-2s are automatically prepared at the end of the year.
The key benefit of an online payroll service is enhanced control. Traditionally, payroll services required small business owners to call in payroll at a designated time, even if that meant having to leave an important meeting with a customer or an employee. With an online payroll service, payroll can be processed whenever it's convenient.
Control also comes through the ability to modify payroll information in real time and view your payroll calculations instantly. With traditional "offline" payroll services, the small business owners act through an intermediary - the payroll clerk - who enters the data. When mistakes are made, which frequently happens, the small business owner doesn't know it until the checks arrive.
Finally, control is increased through the availability of reports that let you track and monitor your payroll. Employers have access to online payroll reports in real-time after logging into a secure web site. Similarly, employees can log in and access and print their payroll records, thus alleviating an administrative burden that frequently arises when employees need proof of payment history for loan applications and other purposes.
Beyond increased control, online payroll services let small business owners save time and money. It only takes a few minutes to process payroll online, so time is freed up for more important things, like getting a new customer or spending time with your family.
How do the new payroll services save money? Because the new online payroll services don't have the same cost structure as traditional payroll services, they can charge 30% to 50% less. Moreover, many payroll services guarantee that you won't incur a payroll penalty, which can represent a considerable savings.
Taking Control of Payroll
Outsourcing payroll is a no-brainer. It simply doesn't make sense to waste time, money and resources on a tedious task that is ancillary to your core business.
Getting started with payroll outsourcing is easy enough. You can find the payroll service that's right for you by searching on the Web or by asking your colleagues for a recommendation. In many cases, you can simply enroll online and get started immediately.
Here are a few payroll services that are worth checking out:
- SurePayroll Online Payroll Service - This online payroll service is our favorite. It's amazingly convenient because you can process payroll anytime, anywhere as long as you have an Internet connection. Very affordable.
- ADP Payroll Service - You can't get fired for using ADP, or so the saying goes. They are the biggest payroll service. They've been around for a long time. This payroll service is most appropriate if your business is bigger - say, over 100 employees.
- Paychex Payroll Service - This is another big payroll service, a runner-up to ADP. Good offerings and good service. Again, most appropriate for larger companies.
- Paycycle - This is a good service that reminds you when to process payroll. Unfortunately, it doesn't guarantee that you won't have penalties and you still need to do a fair bit of work yourself.
The bottomline? Making payroll is something that small businesses have to do. Outsourcing payroll or switching to a new payroll service for the new year can alleviate pain and let you focus on what's most important - growing your business with focus and attention.
Want to learn more about this topic? If so, you will enjoy these articles:
SurePayroll Payroll Service Review
We greatly appreciate any advice you can provide on this topic. Please contribute your insights on this topic so others can benefit.
I've used both ADP and Ceridian.
Both have deplorably bad online systems, evidently written by high school web wannabe's. The user interfaces are arcane, non-configurable, and just plain hard to use.
Our managers waste hours per week approving (or trying to approve) timecards. Our staff have to put up with a daily hassle, especially the non-exempt employees.
I have an engineering staff reporting to me, and if we could spare the time I'd have them write a *real* front end and just send a file to ADP for processing.
ADP, Ceridian, if you're listening (and from my experience, you're not) please please please hire a user interface or user experience expert and fix your online system!
Our company has used paychex since inception. We are shopping for a new payroll provider now due to a terrible online payroll presence that Paychex presents. The layout is not user friendly, and seems to have been written some time back. The online program and reporting is quirky.
I used ADP when they bought out Intuit and thier service was laughable. Paychex's rep came in and promised to do better, but after 2 months they were worse than ADP. And their online system was horrible. I switched over to a company called E-chx earlier this year and have not had a problem since. Their online interface is great and thier customer service is head and shoulders above ADP and Paychex.
We used ADP "Easy" online payroll for two payroll periods. It did not take us long to find out the myriad of mistakes that they made, debits that were unauthorized, the horrible customer service we encountered, and the high pricing that they charged and the absurd amount of unnecessary paperwork and reports they would send us. We went back to Bank of America payroll.
We used ADP for several years and finally got tired of the constant increase in their fees and the lack of customer support. The final straw was when they charged us 3 times to process our W-2s. We switched all of our processing to Payco in NY about 3 months ago. The difference in customer service, responsiveness, and ease of their online system is simply unbelievable. I now wonder how ADP is so successful, and wish we made the change years ago.
I was a customer of Paychex for nearly a year and they provide the worst service, most annoying billing model, and most frequent “Billing Errors” that I have ever experienced. We signed a contract that laid out a price per payroll however, the price we actually paid was always 40-50% more than that price because of “mysterious charges” that kept appearing on our bill, billing for extra payroll that were never processed, and also all the extra fees and surcharges that Paychex adds on that nickel and dime you to death. Every month we spent hours calling multiple times about the “mysterious charges” or extra charges that somehow would appear on our bill 10 out of 12 months during the year. They would always reverse the charges and claim that the error wouldn’t happen again but it always took 60 days (per their contract) for them to credit our account (which means they have our money during that time), it always took more than 2 calls and the next month there was a different “mysterious charge” that they could not explain that would appear on our next bill. I think this is how they make their money because most people probably don’t check their bill and they always try to hide the charge in something that sounds legitimate. Beware of their scam!
Second, if they want to speak with you for any reason, they have this automated computer call you and tell you to call them back. It doesn’t even give you the option to connect right away so you have to hang up and dial back which I guess is to save them long distance charges. Sorry, guys if you want to talk to me, you will have to have a live person pick up the phone and call.
Third, the reporting is decent but they charge a lot for this service and it uses their own software that you have to install. Again, it’s 2008 and everyone expects online access to data and it should be included in the price of the product. You can tell they build this site in 1998 and it hasn’t changed since then so it costs them less to provide electronic access than to print reports.
In conclusion, Paychex revenue model is to scam you out of your money hopefully without you realizing it. They are a company that seems to still be operating in 1998 with all of their efforts being put into printing paper reports and checks and charging the customer extra for any modern technology that saves them money like online reports and electronic deposit. They choose instead to modernize by purchasing automated calling machines to insulate themselves from their customers.
Stay away, they will take your money, overcharge you repeatedly, hold your money for 60 days, charge you extra for services that save them money, and send their automated calling machine after you.
I have never had a bigger nightmare to deal with then when I went with ADP for 2 of my companies' payroll services. This company has made more mistakes than I can even count. Even when they are trying to fix a mistake, they mess that up. This is not a joke when it comes to dealing with taxes, as I've had to deal with their mistakes with the state and local. DO NOT USE THEM! Went with a competitor and have not had a problem. They also gave us a rep we could call all the time, unlike ADP where you speak to someone new all the time.
We have been using Paycycle for a bit over 1 year. It has been just great! So much better than ADP in both use and predicable costs. (They actually charge you exactly what the promise, unlike ADP!) From a utility standpoint, they are easy to setup and use, provide e-mail and on-line paystub access, and very nice reporting. There are definitely a few more steps involved compared to ADP when taking into account tax payments, but overall I spend far less time on payroll than with ADP as I don't have to analyze their paper reports and reconcile seemingly endless charges.
SB Owner, glad to hear you've found a choice that works for you. We use SurePayroll because we think it's the best combination of great technology and great service at a good price. PayCycle is good too, but it's a payroll reminder service, so there are some things that SurePayroll does as a full-service payroll service that PayCycle doesn't do. As for ADP, we've used them in the past and they were fine. They've just been a little slow on the uptake with a simple online payroll service, which is important to us. In any case, thanks for the feedback. It's good to hear what people think about the various payroll services, including the good, the bad and the ugly.
I think ADP is horrible. I worked for a multi-million dollar corp a few years back who FIRED them in the middle of a payroll year because they were so consistently AWFUL. Mistakes... bad customer service, etc. The corp I work for now switched from Primepay (who weren't really THAT bad) because of the fact that we had a few MAJOR problems when we were 'transferring' payrolls and our system went down due to power failures... it was a nightmare. We switched to Paychex who is okay, but we had a HUGE problem with them at one point and they actually gave us a free month of payroll because they screwed up so bad. They are presently switching their website and reports to be more user friendly so we will see how that works out. I think, personally, that no matter what you do, a third party payroll system will ALWAYS have quirks.
Had ADP for 8 years. Old archaic system. Price for upgrade was outrageous. Switched in late 2003 to Ceridian. Source 500. Reporting not that great but had access to data for querying ourself. Customer service is terrible but price remain fairly flat over the past 6 years. Looking at Paychex now. Price is about 40% cheaper so tough to say no but must say i'm leary about them. Look hokey and a bit too slick in their sales pitches. Online comments read to date aren't helping convince me otherwise. Really now, how difficult is it for these payroll companies? In the end, they all need a lesson in customer service.
The company I work for just switched to ADP and we have had several problems. I am wondering if this outsourcing of our payroll is being done by personnel that are not "English First". Does anyone know if they are overseas and if you do can you give a link that proves it so I can verify for myself?
I work for a small business, 10 employees, 9 in California and 1 in Boston, MA. We use ADP and have had no major issues with them. However, I've been approached by WPS, Inc. payroll services. They are quoting about a 40% savings. Does anyone have any experience with this group?
Jean - I work for one of the large payroll companies so I won't comment on who is better than whom. However since I do work in the industry, I hear a lot of buzz about the smaller companies that come and go. The smaller, cheaper companies are usually not bonded, insured, or subject to certain financial "rules" that Paychex, ADP and Ceridian are. In my state alone, we've seen 4 small payroll companies go out of biz in the past 18 months. And when they go, they do it with a bang! Collectively they embezzled almost $200M of tax liabilities from their clients. Now those business owners and/or the local taxpayers are stuck with the fines and penalties. Sometimes you get what you pay for.
Jean & bboop-In contrast, I work for a smaller payroll company and also being in the business not only do you hear of smaller companies that come and go, but many "horror" stories about folks who signed up with the big companies thinking "bigger is better" only to find out it's not. If you are researching a smaller company, find out if they have an SAS70 audit done yearly. Also check their references. Our company isn't big but has been around for over 35 years. Not all small payroll providers are embezzling money.
|Small business nightmare
First time small business in Tulsa that knew nothing about payroll or taxes so I signed up with Paychex. Salesman convinced me Paychex was the perfect solution. First payroll Paychex reported taxes but didn't withdraw from my account and pay them, which is what I thought I was paying them for. Equally as baffling is why they did'nt inform me. Eventually I found out about the back taxes now with a large fine attached. Paychex said they would fix the problem. Now months later, Paychex will not return my calls. I have a letter from the tax comm. informing me of intent to file a warrant for back taxes and a large fine. I fired Paychex. I never have been, nor imagine I ever will be, so utterly failed by a company in the service field.
|Payroll Co Employee
I also work for a large payroll company. I am flabbergasted by the number of comments stating that companies have had such a terrible experience with the large providers. The fact of the matter is no company is perfect and mistakes are bound to happen, it is how they are rectified is what really matters. I would always recommend on having a personal relationship with your sales rep. Contrary to popular belief your experience with one of the large companies can highly depend on a good relationship with your sales rep. They are the ones who you can get a hold of after business hours, and will go to bat to fix any problems you may be having. Hold them accountable, after all they are the ones who made the sale to you, and will be around to help you through any transition issues. I can say this with confidence because I am a sales rep for one of the large companies, and help my clients through questions and issues instead of directing them to a 1-800 number.
Also small business owner should feel secure in knowing the a large company will not up and run with their tax dollars, and leave the small business owner holding the bag when it comes to tax payments that have not been made. Also I will say this, don’t assume just because a payroll company is a heavy hitter in the payroll industry they are only for large clients. The provider I work, in which many people have the misconception it is only “big business clients” actually has a phenomenal platform for small business, and when I say small, I mean I have signed up companies with 1 employee on payroll.
Also to the blogger named “Small Business Nightmare” I would be happy to speak with you about my companies services, and give you a much better experience with an outsource provider.
|ADP District Manager
I am a District Manager with ADP in the central Connecticut region. In my opinion a lot of the issues that previous clients have with ADP stem from an error in judgment that ADP made back in the late 80's early 90's. What ADP did was they tried to set up smaller businesses on the same payroll platform that our larger accounts (Coke, ING, NYY) were using. For many of our clients this solution worked fantastically. However some clients found the solution a bit cumbersome to navigate and a little bit on the pricy side. Late last year ADP rolled out a brand new web hosted platform called run. Run employs a Microsoft Excel style architecture with the ability to process payroll and pull reports anywhere in the world you have internet access.
We have also changed our pricing structure creating consistent invoices and can often be offered at a cost savings compared with other service providers. We take a bundled pricing approach vs. an “a-la- carte” approach with three packages depending on the needs of our clients.
If you are a small business owner with less than 50 in the greater Hartford area and would like to re-evaluate feel free to e-mail me at [email protected] Include the name of your company and the number of employees you have and we can discuss our solutions further at a time that is convenient for you. ***You will receive a free federal labor law poster valued at $30.00 when you mention this post in your e-mail!!!***
I am just starting a small business with only 5 employees. The past owner only used Paychex and said NOT TO USE ADP. Has anyone switched from Paychex to ADP and if so, did you have a good experience?
It looks like many of these posts are created by individuals working for one of the named payroll outsourcing companies above. I actually work for one of them. I can tell you that no company is perfect nor is any client.
When looking for a good payroll company, your decision is simple. Find the payroll providers who are publicly traded and are financially transparent. The good payroll services will each have more than 500,000 clients. Ask your accountant or CPA for advise, not random people online. Best of luck!
DO NOT USE ADP if you are a company with less than 50 employees. I would totally choose paychex if your a smaller 5 man company. Paychex is more of a personalized service designed for companies like yours DI
Di, where abouts is your company located?
Has anyone used Bank of America for their payroll service provider? If so, are you pleased with their service?
We used ADP for about 2 months and they were horrible! Mistakes, double pays, late on paying payroll taxes, unaccounted for fees, terrible customer service. It actually took several weeks, many letters and phone calls to fire them. I have used Bank of America easy online payroll for two years now and they have been excellent. No problems, great customer service, reasonable pricing, very easy to use.
the bottom line is that 3rd party payroll services are a means to an end. as a small business owner, i dont have time to deal with the constant changes in payroll and DOL laws. my concern is finding ways to grow by business and improve my bottom line. i used ADP for years back in the late 90's to about 2004 only to find their system was inconsistent with fee structure and the rep in which you would speak to when calling in to ADP to correct something (always someone different). i then switched to paychex only to find their system was maybe just as good as ADP's at best but even more inconsistent. after a few years i decided to re-evaluate again and met with an ADP rep who presented their RUN platform to me, which was honestly leaps and bounds better than anything i had ever seen in the past. real time payroll processing right on their website, a full HR suite to keep me up to speed with what seems to be daily changes in federal and state laws, at a price that is more competitive than i would have ever imagined (5 employees at less than $50 a week!) plus i have a team of 3 people that i always speak to when i call in to them if i have to make a correction, and one of them is always available so no more having to leave a voicemail waiting for someone to call me back 8 hours later.
for all those reading this thread, my advice to you is to go with ADP. they are the biggest for a reason!
Surepayroll is NOT the choice anyone should make. We have had continual problems with them, they weren't filing our returns on time so we received notices from the state. They then were billing us the incorrect amount so we had to make up for the difference due to their error. When we've sent documents in they don't confirm that they have received them and then will state that they didn't ever get them.
When we've called and asked them to cancel our service, and sent in the documents they continued to debit our checking account for 5 more months. They wouldn't even consider a credit for 1 month.
The representative says that each employee is responsible for their work load and management so if we don't get the response we expect it may be due to the person, but no matter what we will not get a credit for the months that our business was closed.
I just started with SurePayroll after switching from ADP. I am shocked to learn that SurePayroll can only produce a payroll journal entry if their system is set-up for integration with the accounting package. Of course, we use Quickbooks On-line and it is not supported. I asked support about outputting an entry to Excel, but there is no way to do it. You can't even manually assign account numbers in their system. This was a major surprise and makes me wonder why they come so highly recommended.