Many of our new customers these days are escapees from (ahem) another network ...er, payroll service.  Of course, we always ask them to tell us about the issues that are motivating them to change up ...and these are the Top Four answers we get:

4.  They keep messing up our payroll, and my employees don’t appreciate it.  Oh, and since I’m the one spending my time on fixes and re-runs... neither do I.
3.  The system they make me use is just plain clunky.  It’s not truly Web-based, not real-time at all ...and just fuggedabout being user-friendly.
2.  I can’t predict what I’ll be charged from run to run.  $25.00 for this, $1.25 for that;  it’s worse than our phone bill.  Every time I turn around, I discover the meter’s been running and there’s yet another fee category.  I’m sure you can imagine how much our CFO enjoys that.

(insert tympani roll here...)  And the Number One reason to hate your payroll service...

1.  I can never get the right person on the phone to get my issue resolved.  I get passed around from department to department.  No one ever gets assigned to our account ...so even after 5 years, they still don’t understand the quirks of our business.

But once those mistreated customers make the switch to MyPayrollHR’s online payroll service, all of those problems simply melt away... 

• Since they get to preview payroll runs online beforehand, there are virtually no reasons for messing up a run. 
• Our system gives you a foolproof, very user-friendly dashboard interface;  and it’s Web-based – and real-time – by design, from the ground up. 
• MyPayrollHR charges an all-inclusive flat rate ...no nickel-&-diming.  And we even throw in value-added services, like a resource center and HR consulting ...which those escapee customers could only dream about before. 
• You get a choice of support modes with MyPayrollHR:  Web, email, phone.  And we’ll assign you a permanent single point of contact, who will come to know your business.

If you’re one of those mistreated, unhappy clients of a sub-par service, don’t put up with those “Top 4 reasons” another day!

OK, so you did your homework and chose not to go with a traditional, batch-oriented payroll service.  And you resisted the siren song of your IT group, realizing that it’s just not likely that they could build a competitively-featured application in any reasonable sort of timeframe.

So instead, you went with an online payroll service.  But soon after signing on, you began having a severe case of buyer’s remorse:  not the generic, nameless sort of dread that attacks home buyers, but the very specific sort that arises from experiencing a number of very real problems.  For instance... 

• Just the other day, yet another employee just found a mistake with their W-2;  that makes 23 in just the first month that you used the system.
• You find several bugs in the system;  the vendor admits them, but it’s clear they have no intention of getting them fixed. 
• You’ve received your third tax notice concerning the very same issue.  Now, on your list of folks you really don’t want to have trouble with, the IRS ranks pretty close to the top. 
• When you call your vendor’s customer support line, you get an automated attendant ...and then (after holding for what seems like eternity) voicemail.
• You just got an invoice for making too many calls to their support line.  “Excuse me?! ...these are your service’s problems that I’m having to call about;  I don’t do this for the pure enjoyment of it.  And now you want to charge me?!  Sorry... not happening in this lifetime.”

It may seem like a made-up list, but these are actually real experiences we’ve heard about from real customers who finally called us to escape from their initial online payroll service.  Somewhere in a parallel universe, we’re so hoping that everyone simply calls MyPayrollHR to begin with;  everyone would be so much better off, all the way around!  Don’t make the same mistake these clients did;  call the pros at MyPayrollHR first:  (866) 697-2947.

So you’ve been comparing internet payroll solutions lately, and are leaning toward an online payroll service provider.  That’s good;  because (as we blogged about just recently) there’s virtually nothing to recommend the traditional payroll processing services, whose business model and technological foundation is largely unchanged since the 1960s.

But now the challenge becomes choosing the right internet payroll solution for your business ...and that won’t be easy.  Simplistic, one-size-fits-all answers won’t help, because there’s just too much variability from business to business.  Perhaps the best thing we can do here is to sketch out a set of factors that tend to discriminate among the various offerings;  then you can decide what’s best for you, based on the relative importance of the various factors to your business...

• Was the vendor’s system designed for a company of your size?  Some systems were designed for paying fewer than 5 employees ...which is fine, if your company is in that size range and planning to stay there.  Such systems tend to fall short on providing meaningful cost allocation information (among other things), which will become increasingly important as your firm grows. 
• Do you have full, real-time control over the system? ...or – harking back to the bad old days of traditional batch-oriented systems – can you only perform certain operations on some sort of vendor-defined schedule?  Are you beholden to someone in the “back room” to initiate certain common operations?
• Is the system intuitive?  Can you add deductions, departments, pay categories, etc., on your own, or do these need vendor intervention? ...and require how much lead time?  Does it provide a simple payroll “dashboard”?
• Does it enable online access, so that employees can easily view paycheck and paid time off information?
• Does it do more than process checks?  In particular, does it support tax filing/reporting and W-2 filing/printing?  And how about...

 task reminders
 HR performance statistics
 a custom report writer
 ability to post documents
 tracking employee paid time off, training, company assets

• Does the service charge only a single flat fee? ...or does it nickel-and-dime you with many miscellaneous charges?  Such charges – for things like delivery, direct deposit, reports, W-2s, etc. – can add up in a hurry.  Also, is the payroll service priced by the transaction ...even if you’re the one making the tax deposits and printing checks? 
• Does the vendor provide added-value services at no extra charge? ...for example, general HR consulting.
• Does the service provide multiple support options? ...most especially telephone, vs. Web/email only.  If so, will you be assigned to a specific person who will come to understand your business? ...or simply handed off to the “next available” agent in the phone bank?

You’ll find more in-depth information to facilitate your comparison on the MyPayrollHR website;  you’ll even be able to take a virtual tour.

If you hold the payroll responsibility in your company, you undoubtedly know the drill. Somehow every other employee of the company has found your phone number, and/or knows the way to your office.

Why? ... because they have questions.  You know they’re perfectly legitimate questions and have got to be answered, but that doesn’t stop you from informally totaling up just how many hours this ad-hoc personal service takes out of your week.

You can probably even recite in your sleep the Top Three questions (although there are certainly a lot more): 

1. I lost my pay stub ... can I get a copy?
2. How much paid time off do I have left?
3. Can I get a copy of my W-2?

Hopefully, your payroll service provider provides you with some sort of instant access to your database, so that you can at least answer those queries on the spot;  otherwise, it’s an “I’ll have to get back to you on this” (meaning two interruptions for the same question).  But in your dreams, you may have fantasized about a system that allows your entire employee population access to their own information ... like maybe over the Internet, from the office or their homes.

That’s no fantasy, of course, with an online payroll service such as MyPayrollHR’s.  Our system provides precisely that type of employee self-service, so they can get answers to all of those questions on their own via the Internet, any time they want.

And what does that mean for you?  No more queue outside your office;  no more 20 or so phone calls a day with fairly straightforward questions.  Which frees you up to focus on clearing up all those other piles on your desk!

Oh... of course, there are always those oddball questions thrown in:

Can you help me get discount lift tickets at Sugarloaf?
   or
What’s the best Caribbean island?

Sorry... but as good as our payroll service is ...it really can’t handle those. I have hear good things about St. Lucia, however.

Yes, the calendar just rolled over to 2011, so it’s reasonable to ask ... why should you choose a “traditional” payroll service that may have been around since those other 20s [the allegedly “Roaring” 1920s]?

OK, that may overstate things just a tad;  payroll in those 20s was simple enough to be done with quill pen, and didn’t even involve income or payroll tax!  But it’s very true that those traditional services were architected back in the days of centralized, batch-oriented computing ... and not a whole lot has changed with them since then.

The result is that tying yourself up with such a traditional vendor means that ...

• you’re totally subject to their rules, their rigid forms and their schedule (for hours submission and check delivery)
• you (or someone you authorize) generally need to be in the office at hours-submission and check-delivery times;  forget such high-tech conveniences as checking on your run from your laptop on the beach
• any errors in a check run will generally mean a new run, and possibly delayed paycheck delivery;  there’s typically no way to “preview” the run before it happens
• you become subject to potential check-delivery delays due to extreme weather ...a hazard that those of us in the Northeast US were unmistakably reminded of this winter
• when errors occur, it’s not always immediately clear whether your organization or the vendor’s was responsible
• your employees will still be taking up your time with routine information requests, since there’ll be no such thing as accessing their info online

But there’s no reason to buy into such an outdated and restrictive payroll solution.  In recent years, the Internet has enabled an alternative model:  one in which the application logic, data storage and processing power reside with the service vendor, but where control over inputs, schedule, data integrity and outputs remains with the client. 

Such an online payroll service turns the drawbacks of traditional services inside-out, and provides several additional benefits as well ...

• Rather than imposing a fixed schedule and set of onerous rules, an online service puts you in the driver’s seat via a payroll dashboard:  you determine your desired check-run dates, and submit your input information at any time prior to the next run;  and typically you can actually modify data-input forms to meet the needs of your business, rather than the reverse.
• Because you have online-anytime access, you’re not chained to the office;  you can modify information or trigger a paycheck run from anywhere there’s an Internet connection ...which probably includes even that cherished spot on the beach.
• Instead of finding errors after checks are delivered, you have the ability to preview a run’s accuracy in advance;  and if errors do occur, it’s very clear who’s responsible, since you’re in complete control of your own data.
• Because you have the ability to print checks locally, you’ll avoid the cost of overnight shipping ... and no amount of bad weather will delay your paycheck distribution.
• You can free yourself from many routine information requests from employees, since they can have online access to (authorized) areas of their own information.
• Instead of being nickel-and-dimed for “extras” like shipping/delivery, direct deposit, tax reporting and the like, the better online payroll services will charge you an all-inclusive flat fee ... and sometimes include value-added extras, such as flexible support options and HR consulting.

For additional information, you might want to check out the side-by-side comparison on our website.  Hopefully, you’ll discover that there’s just no good reason to go with a traditional outsourced payroll processing service today.  For more individualized assistance, just give MyPayrollHR’s professionals a call, at (866) 697-2947.

It happens to nearly every company at some point... and for many, multiple times every year.  What is it?  Inclement weather that forces an office or plant closing.  In the North, the usual problem is snow or ice;  in coastal areas, it’s tropical storms;  in the Plains, floods and tornados.  Even in the relatively consistent climate of Southern California, there are occasional hazards such as torrential rain, mudslides and forest-fire smoke that can curtail business activity for some period.

Why is this a matter of concern for company management?  First, because unless ordered by a controlling governmental authority, senior management must make the call as to whether closing the office or plant is warranted, and for what interval of time.  This can be a gut-wrenching decision, and often must be made during what is normally personal time and on the basis of fairly sketchy information.

Second, having made the decision to close, you now face a thicket of regulations that govern pay practices in such circumstances.  Some of these are...

• If you close the office, you must pay exempt (salaried) employees for a full day of work;  but you are allowed to charge this time against their PTO bank.  However, if the business closes for a full workweek, exempts need not be paid at all (they are free to use vacation or other accrued time, if they have it). 
• If exempt employees cannot or are not willing to come to the office because of the weather, you are not required to pay them.  (As a practical matter, however, many employers pay them anyway, or allow employees to use available vacation or PTO to cover the absence.)  However, you are required to pay them for a full day if they show up for any portion of that day, even if you didn’t declare it to be a weather emergency. 
• You may dock the pay of hourly (non-exempt) employees for missed time, whether or not you had an emergency plant closing.

The confusion over exempt classification often leads to Department of Labor fines and class-action lawsuits.  Also, improper deductions from exempt employees’ pay – if not caught and reimbursed – can cause those employees to be reclassified as non-exempt, making them eligible for overtime pay ...including back pay for two or more years!

Your best defense is to ensure that your employees are correctly classified and that your company does nothing to jeopardize exempt employees’ status.  It’s also a good idea to review and publish your policies and practices, so that all of your employees understand how absences or closings due to bad weather will be handled from a payroll and attendance-tracking standpoint. 

Departures from routine – such as those caused by bad weather or other hazards – are an inescapable source of uncertainty and stress for employees and managers alike.  But with a bit of diligent care, you can minimize those effects and avoid unwanted collateral damage to your business.

Users of traditional payroll service providers (ADP and Paychex being two of the better-known examples) often literally don’t realize how much the service is costing them.

It’s common for these providers to charge on an a’ la carte basis for their services.  Which means that the only charge you’re likely to be really aware of is that big one, for the periodic payroll run.  So when you actually add up your charges for the year, you’re often taken aback to find separate, itemized charges for things such as...

• quarterly reporting
• check and report delivery
• check signing
• W-2s
• direct deposit
• extra pay runs
• support phone calls (that’s right: your vendor may charge you for the time it spends fixing even problems that it created!)
  ...even though many of those items are as much a part of “payroll” as the regular run itself.

Then there are a host of less tangible – but still very real – costs, such as:

• cost of resolving an error on an employee's paycheck caused by the payroll service provider (plus the likely cost of that same error occurring again, before the first one got fixed)
• cost in employee goodwill/loyalty of a late delivery, requiring employees to wait for their checks
• cost of time spent when employees question you about an old check, W-2 or vacation balance because they can't find the information for themselves
• time spent calling and calling your service provider to get problems resolved

This is the appeal of an Internet-based, “Software-as-a-Service” payroll service provider.  In some cases, you pay a single flat rate for access to all functions of the application, so your costs are level and very predictable.  In addition...

• the employee/hours/rate data used for payroll runs is totally under your control, not batched in and subject to key-entry errors;
• employees can access (authorized portions of) the same data, so they’ll rarely need your time to answer questions about old checks, W-2s or vacation time;
• you can print checks locally (if you wish), so there’s no such thing as a check/report delivery charge (never mind a late delivery);  and
• you can preview payroll prior to the regular run, greatly reducing the incidence of re-runs.  

We’ve looked at only the cost differences in this post;  in an earlier one, we outlined additional benefits of going with an online payroll service provider.  Hopefully, you’ll look carefully at all the dimensions before going with the provider type that’s best for you.  To make it even easier, we’ve also included a side-by-side comparison charts on our website.

So you’ve been studying the payroll service provider space and are leaning toward an online payroll service.  Well, congratulations! As I blogged about recently, I truly believe that for most SMB companies, Internet payroll solutions prove a better choice than either in-house application software or a traditional payroll processing service.

But now comes the hard part, because the criteria becomes finer-grained from here on.  In the remainder of this posting, I've assembled a checklist of items you can use to compare the offerings of the various providers you’re considering.  Not that there are “right or wrong” answers;  the point is to use the following criteria to pick the solution that represents the best fit to your situation:

• Design center.  Some services are tailored for companies under five employees, so they may be too slow or cumbersome to handle companies of your size and complexity. 
• History/legacy.  Some providers are traditional payroll processing service companies in disguise, having grafted a Web-ish front end onto a legacy batch application.  Their software isn't truly Web-based:  you have to install something on your desktop, you have to synchronize with a central server, payroll isn't calculated immediately for you to review.
• Flexibility.  How much can you control on your own?  Can you easily add new pay codes, departments, deduction codes, etc.?  Is the report writer real-time and easy to use?  Do you have the option of printing your checks locally?
• Full cost.  How will you be charged? ...per payroll run, or by the month?  Are there extra charges for such things as delivery, reporting, tax reporting, hiring/terminating employees, year-end processing (W-2s), direct deposits, etc.?
• Support.  Is it separately charged?  Is it provided by phone, as well as Web/email?  How do current clients rate the payroll service provider’s responsiveness?
• Application ownership.  Does this provider own the software that powers its service, or do they simply front-end another vendor’s software?  If the latter, you can probably expect significant wait times for enhancements and/or problem resolution.
• Breadth.  Do they provide for related HR functions such as HR newsletters, tracking of employee training and certifications, company property accountability and employee performance reviews?
• Expertise.  Can this vendor provide expert consulting services on HR issues beyond payroll, such as EEO and general labor law, training and development, hiring and promotion?

The right online payroll service can certainly be a boon to your productivity and your business.  Just make sure the one you chose is right for you.

When I talk to potential customers, at some point in the conversation I will be asked to answer the question “What’s in it for us?” ... or, more formally, characterize the benefits of an online payroll service to the inquirer.

I've actually found that the best answers to this question come from our own customers.  So here are some of the most frequent answers I've heard over the years;  you might call it a “Top Nine” list of the benefits of an internet payroll solution ...

1. I get to do things when I want, through a user-friendly payroll dashboard;  I don't have to conform to someone else's schedule or batch of rigid forms.
2. I can access my information (and therefore pay my people) anywhere there is an Internet connection.  The world doesn’t have to come to an end just because I’m on vacation or away on a business trip.
3. Because the system is truly online, I can preview my entire payroll before I actually run it.  This goes a long way toward eliminating embarrassing (and costly) errors.
4. I’ve set up our account so that our employees can access their own information (to the extent I’ve authorized).  Now I’m no longer indispensable to getting the answer to every routine question that comes up.
5. I control our firm’s payroll/HR information.  If a mistake occurs, there’s no need to search around for who’s responsible;  I can just focus on getting it fixed.
6. I can print my own checks locally, saving the cost of overnight shipping and the possibility of delay.
7. Knowing that the system is totally secure and frequently backed up gives me tremendous peace of mind, especially since I didn’t have to hire a whole IT department to achieve this.
8. According to our pre-purchase analysis, this approach was more cost-effective than either a traditional “black box” payroll service provider or acquiring application software and the expensive IT people to manage it.
9. It’s allowed us to “go green” by greatly reducing our reliance on paper.

A lot of growing companies are rethinking payroll performance, especially in consideration of today's economic environment. When you consider the control and convenience you gain with an online payroll service with built-in HR support, it's definitely worth looking into. If you’re thinking of doing your own comparison, you might want to check out the side-by-side comparison on our website.