Paying your employees can be a painful process. I'm not referring to the money that goes out of your bank account every two weeks, but I'm referring to the hassle of paying employees (checks? wire transfer? envelopes?) and the hassle of keeping up with local, state and federal tax laws and payroll regulation is NOT for the faint of heart.
PayCyle's President Jim Heeger helps us understand more about PayCycle, but more importantly how payroll solutions differ and why they should be considered when it's time for your business to pay employees.
Intuit, on 2 June, announced their intent to acquire PayCycle for $170 million. Check out Intuit's Payroll 101 Guide
What solutions are businesses using who are not using a service such as PayCycle?
There are about 5.2 million small business employers in the U.S. Traditional payroll service firms, such as ADP or PayChex, have only penetrated 14% of that market. 58% of payroll is currently handled in-house, usually by the owner and 28% is handled by accountants.
PayCycle customers come from all of these "buckets". Often small business employers are switching to PayCycle from a traditional payroll service firm because they want the convenience and affordability of an online service, like PayCycle. Other times, customers have never used a payroll service but decide they want to switch to an easier method and choose PayCycle for its award-winning ease-of-use.
Others have used traditional software-based payroll but decide they no longer want to worry about downloading the latest updates of tax tables and forms. With PayCycle, because it's an online service, tax tables and forms are automatically updated and always available, and taxes and forms can be filed electronically making managing payroll even easier.
There are many companies using services such as PayCycle to manage their business payroll (and other disbursement) services. How does one know which company to choose?
PayCycle, with 85,000 small business customers, is by far the leading online payroll service. For those small business owners most comfortable selecting a leading provider, they should turn to PayCycle. In late 2008, PayCycle was awarded the Editors' Choice for online payroll after a comprehensive and thorough comparative review process by PC Magazine.
At PayCycle our typical customer is the "Modern Employer"- the small business owner who understands and embraces technology and particularly the Internet. The Modern Employer uses instant messenger in the business; is likely to use mobile devices like a BlackBerry or iPhone; likes to receive support online, listens to podcasts and is very comfortable conducting business via the Internet embracing services like online banking and online bill pay.
For the Modern Employer, the PayCycle service is very attractive because it's easy to use (payroll can be set up in minutes rather than days), is affordable (roughly $42 month for our Plus product which includes direct deposit and electronic filing of federal and state taxes and forms) and can be used virtually anywhere and at anytime.
Where does a payment service fit in, when considering the combination of spreadsheets, databases and accounting programs (such as QuickBooks, Peachtree, Microsoft Accounting) that many small businesses use?
Payroll is much more than paying employees their paychecks, it's also about ensuring the proper regulations are followed and taxes are paid on time. For this reason, payroll requires more than spreadsheets and databases. The accounting programs you mention work WITH Paycycle but do not replace the need to have a payroll service. For example, PayCycle recently streamlined its e-services offer by providing a one-click export to QuickBooks to ensure one's payroll is well documented by a users accounting program.
The other thing to keep in-mind about PayCycle is that it is an online payroll service. This means that it is quite different than a traditional payment service that is usually a phone, fax or traditional software-based approach. With PayCycle payroll is always available 24/7 and typically only takes a couple of mouse clicks to process. PayCycle customers love its convenience and ease-of-use, as well as find it extremely affordable when compared to these other approaches.
There are services such as PayPal and Freshbooks which provide simple payment solutions. How do these compare against more robust solutions such as PayCycle?
As you pointed out, those services aren't designed to handle the regulatory compliance that is inherent in doing payroll correctly. Payroll is complicated and for a small business owner, getting it done correctly and on-time is frequently a daunting task taking up precious time and energy.
The beauty of PayCycle's service is that it not only makes payroll easy, but it helps a person carefully navigate the tax forms and filings associated with payroll. For example, if a small business owner is stuck on what to put for tax rates or payments, PayCycle will recommend safe default values for the state unemployment rate, or SUI; federal deposit schedule; filer type (944 versus 941); and, in many cases, state deposit schedule. This is an extremely helpful feature that saves time and money for the busy entrepreneur.
In short, PayCycle is an easy to use online payroll service that not only helps a person set up and implement payroll quickly, but it helps the entrepreneur navigate complicated tax forms and filings.
Ramon Ray is the editor & technology evangelist for Smallbiztechnology.com.