what cpas want in payroll

how does your system stack up?

by rick telberg
(for the aicpa insider)

if you’re like most cpas we know, chances are you’re not completely happy with the payroll system you’re using. but there’s hope: payroll software makers, service centers and other solutions providers are listening.

according to bay street group research, fully six in 10 cpas are open to switching to a new payroll/benefits solution for themselves or their clients within the next 12 to 18 months, and one in 10 is already actively shopping right now.

sixty percent of all the cpas in the country is a sizeable number – well worth the attention of software designers and service providers. cpa wish lists are therefore well worth noting.
and, to be sure, we know that payroll solutions vendors are listening, and listening hard. the issue is explored further, with vendor comments and interviews, in a special advertising section in this month’s journal of accountancy.

in an early look at the results of our latest soundings (the survey, by the way, is still open), the most commonly sought feature is the elusive “ease of use,” followed by ease of installation. not surprising, then, many want better tech support.

facility aside, a large majority shows most interest in programs that keep abreast of tax rates and payroll regulations. sixty-five percent think operating costs are important. also important: integrating 401(k) data, management of flexible spending and health savings accounts, and security.

slightly over half currently use in-house software. between a quarter and a third hand it off to an accounting firm. manual in-house and web-based in-house systems were each in use by only a few respondents.

we’re not surprised to find that cpas have suggestions for better solutions.

the whole wish-list comprises a treasure of market data for software designers.

a few words came up a lot: ease, integration, cost, and reports.

ease features included a request for a better manual rather than the “on-line crap.” someone in middle management wanted “a provider with knowledgeable staff who can help on the first call.” there were requests for ease in report writing, in setting up deduction items, and in general ledger entry.

“get unneeded features out of the way,” said one sole proprietor.

maria t. maza, controller and owner of valet parking service in chicago, knows what she wants: “elimination of redundant input of supervisors and payroll managers, employee info available regarding vacation time, better tools for supervisors to plan.”

accountants want integration with accounting systems, human resource systems, detailed labor data, multi-state data, outside payroll processors, time and billing systems, cpe information, payroll tax forms, general ledger, and general business and erp systems.

suggestions for better reporting features called for greater flexibility, as well as capability for ad hoc and unique reports.

sometimes the requests revealed the complexity that accountants face in the payroll niche (in their own words):
“ability to save excel reporting templates i create and import easily into each payroll.”
“ability to stagger non-taxable income for tax calculations and garnishments.”
“accurate multi-state and multi-departmental reporting.”
“ability to import data to our erp system.”
“automated interface to client’s general ledger.”
“automatic payroll journal entry generation.”
“automatic remittance of withholdings.”
“ability to do payroll in mexico.”
“better hr tracking and reporting.”

some of the suggestions were for features outside of the software. robert e. moorehouse, cpa, in mechanicsville, va., suggested that a vendor provide “client education on what payroll is and what rules apply.” a managing partner of a small firm suggested that the vendor provide marketing support to help the firm find clients.

a senior executive at a not-for-profit suggested “an automatic flag when a person over 55 has reached the limit on 403(b) contributions?”

from murfreesboro, tenn., h.a. beasley, partner of a small firm, wouldn’t mind “stronger internet and/or paperless features.”

cpa firms might be especially interested to know that many of their colleagues think that in three to five years local firms will be earning a significant portion of their revenue from some involvement in payroll services or activities and/or benefits services to clients. next in line: regional firms. just a few cpas expect payroll to be a big factor at national firms.

posted on september 6, 2005