how does your system stack up?
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.six in ten 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.
in your own words…
if you could snap your fingers and change one thing about your current payroll solution, what would it be?
(first 20 responses only)
1 cheaper, i think it is too expensive
2 geared more towards significant multi-client use (reminders, scheduling, etc.)
3 better year end service re the inclusion of taxable fringe benefits on the w-2 form
4 ease of use
5 online access
6 needs to be upgraded to match the current operating systems
7 automatic remittance of withholdings
8 it would be easier to use and produce more flexible reports.
9 stronger internet and/or paperless features
10 greater flexibilty
11 updating payroll taxes.
12 ease of use, direct deposit
13 none
14 better reports. online access.
15 time entry is a little convoluded, would make that part easier
16 dont know
17 i would use software that was not available to the public.
18 having one complete solution instead of piecemeal
19 i am happy with my payroll situation. i have remote access which has enhanced accessibility while away from the office.
20 i would make them dependable and helpful.
is there anything else we should know about trends and issues in payroll, benefits and hr solutions? (first 20 responses only)
1 none
2 payroll processing firms are way too expensive for the function they serve.
3 automatic time capture at time card entry
4 handling all the new ira and related issues.
5 web based solutions and outsourcing will be reviewed closer as companies move more toward cost containment.
6 i do not know why it is so difficult for a payroll company to do their job well. we have worked very closely in our own firm, and referred many clients, to both paychex and adp. while we are now strongly recommending paychex over adp, neither company does a good job. we have had approximately half of our clients experience major problems with both companies. it is not profitable for our own firm to add payroll to our duties. oh where, oh where can we look for good payroll help!!!!
7 do to cost factors, our firm would like all clients to use a payroll provider for their payroll and payroll tax needs.
8 i do not get involved in this area of our practice. i have forwarded the survey to the parson in charge of this service in our firm.
9 no
10 services offer less each year
11 local/municipal taxation becoming more prevalent
12 payrolls are becoming inceasingly more complex and a speciallty service.
13 need more comprehensive solutions
14 more web based for transferring data between client and service provider
15 we use a timekeeping system where employees at remote locations phone in their time. it works great for these types of employees.
16 quit trying direct the work to outsourcing providers. i got a problem paying dues under those circumstances.
17 payroll processing is a growing service that will become an important revenue component for small to medium sized firms. for too long all this business has been given away to the national bureaus who are extremely profitable, while accountants work very very hard with constant fee pressure, etc. payroll processing adds a revenue component for small to medium sized firms that strenghtens them financially.
18 has to keep track of pto (paid time off) accruals and use
19 no
(parts of this report appeared first in the aicpa insider.)
for more information about obtaining the full study, complete with brand name results, please contact rick telberg at bay street group llc, or by phone at (914) 674-4531.