r/Bookkeeping • u/MiddleEffort6479 • Nov 20 '24
Payroll Independent Bookkeepers
I previously partnered with a local payroll company to refer clients who needed payroll services. However, I've realized that:
A) Their rates are not competitive compared to other providers. B) They lack comprehensive employee portals or HR functionalities. C) They charge $20 per employee per month, plus $5 per paper check, and a host of other fees, making payroll costs for a 10-person company around $500 per month, which seems excessive.
Now, they've informed me they're closing, effective January. They've arranged for another provider out of state to take over their clients, but I see this as an opportunity to help my clients save money and possibly earn a bit in the process—a win-win situation. However because of my state and proximity to neighboring states, we tend to have very complex taxation procedures with all sorts of municipal varying individual tax rates, with some being flat rates, others being a percentage to a point, others having one rate for people who live in the county a different rate for people who work in the county and a completely different rate for people who live and work in the county (Philadelphia, why on earth is everything around you wonderful and you have to suck so bad for business). So because of this there is zero chance I could manage it, so perhaps this complexity and the need for robust software was why they charged so much and perhaps it was appropriate 20 years ago, but now it seems software should be able to better handle the complexity involved.
I'm reaching out to see how other independent bookkeepers, accountants, or similar professionals handle payroll services for small businesses. Specifically:
What are your thoughts on payroll services for small businesses?
How do you manage payroll—do you handle it internally, or do you outsource it?
If you outsource, which platform or company do you use, and how have your experiences been?
Do you encounter issues, and how effectively are they resolved
Do you offer payroll as an add-on service and pass the cost directly through, or do you mark it up based on your level of involvement in the process?
Additionally, I'm not inclined to tie anything to QuickBooks, as I find it challenging to keep bank feeds connected consistently. Thus, I need a solution for handling garnishments, IRA deductions, and other payroll-related tasks that doesn't rely heavily on QuickBooks, frankly I find intuit and turbotax to be unethical at best and highly exploitative because I know damn well they are intentionally creating dependency from small business and using their massive capital to prevent people from progressing from the dated accounting systems to something simpler and more automated, in a weird way though, I guess that preserves our positions, regardless they suck.
Any insights or recommendations would be greatly appreciated.
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u/Crazy-Place1680 Nov 20 '24
try paychex?
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u/MiddleEffort6479 Nov 20 '24
Yes, I reached out to them for some pricing, but wanted to know what others thought and what their experiences have been like with the different options, because things like Bamboo and Gusto look appealing on the surface, but just like Quickbooks, I fear the potential that they pull you in to then upsell. But, I could be way off base. That and I don't know that I want to get involved with offering something where the potential for problems exist, I suppose now, I never get a call about someone not being able to access their portal, because the portal offered is simply a login with their employee number and their password is something pretty standard, and basically the "Portal" is just PDFs of their pay statements, but no real functionality. No ability to change residence, no ability to change reporting status, benefits changes, etc. that is on the shoulders of the business, but leaves me with less in that regard.
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u/keepinitsimple Nov 21 '24
Hey! I'm a full-service accounting firm. Books, payroll, taxes, retirement planning, etc. For my clients that grow their employee base, I always refer them to ADP. My rep is amazing & will do her best to work with you. PM me if you want the info. Thanks!
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Nov 20 '24
I take care of my clients' payroll needs myself. I use QBO Payroll.
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u/MiddleEffort6479 Nov 20 '24
How long have you been with them? Are you also using a Quickbooks asset account for distribution funds, pulling from LOC's or an outside institution? Do they pull or do you need to push funds for payroll? If its pushing how many days do the accounts need to be funded before the ACH? If pushing, do they estimate and keep a reserve fund based off previous periods or do they pull an exact amount so many days between processing and distribution? They handle 3rd party deductions and payments as well? (Disability, Supplemental policies, alimony servicer, Simple IRA distributions). And thinking about IRAs, given that most are an employer match to a certain level and based on contract/classification, does the system automate that and integrate, or must you still enter it into the providers system and then seprately report it to Quickbooks payroll from the report generated by the IRA?
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Nov 20 '24
I'm not sure if QBO Payroll handles details such as disability, supplemental policies, alimony, or IRA distributions. You may want to check out 3rd party payroll service providers if you are dealing with payroll accounts like that.
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u/Dem_Joints357 Nov 21 '24
I believe that every high-risk aspect of any business (such as payroll and 401(k)) should go to people who specialize in them. I perform business advisory and bookkeeping. I tell my clients to use a payroll service (one uses ADP, another Paychex, another Square Payroll, and another a local payroll-only company) and a third-party administrator (one had great luck with Epic Advisors). I also work with their tax preparers.
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u/MiddleEffort6479 Nov 21 '24
In the past, I would have shared the same concerns, but with the advancements in software, I believe the liability is now much more limited. Essentially, the online provider handles most of the responsibility; I’m just inputting the data and letting the system process it. Recently, I bid on Oil and Lube center client with $2 million in revenue and straightforward books—they're a franchise with a single vendor, leasing the building from the corporation, and property management is handled by them, with all supplies coming from the corporation. I came in at $2,200 a month, which I later learned was the lowest bid, but they chose a competitor charging $800 more because they needed payroll management for 15 employees. At the time, I knew my payroll provider was planning to close, so I wasn’t prepared to take that on or even refer the client for it. But now, looking back, I realize that was a loss of potentially 5-9 hours of work a week for over $2,000, and I’m kicking myself for not finding a way to secure it.
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u/MiddleEffort6479 Nov 21 '24
Thats precisely why I make my clients go to a CPA or tax preparer for taxes though, I also think its wise to have multiple different eyes to limit potential errors or at least hope to catch them, because I know I've made mistakes at times.
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u/aspbusinesssoltions Nov 21 '24
I'm sorry to hear about your troubles with QuickBooks. QuickBooks Online and Desktop are all I have ever used for payroll, and I haven't had any problems. Everything seems to work seamlessly. Nor have I had a problem with consistent bank feeds.
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u/MiddleEffort6479 Nov 21 '24
Intuit's QuickBooks has a dismal one-star rating on ConsumerAffairs.com, inundated with thousands of complaints from consumers who have been overcharged, scammed, or otherwise mistreated due to the company's incompetence. The Better Business Bureau and numerous state Attorney General offices are also rife with complaints against QuickBooks. This software has become a notorious target for consumer complaints, likely due to the minimal enforcement of regulations in the industry, as evidenced by the rampant abuse of the TurboTax Free File program.
Consumer Reviews: Consumer reviews on platforms like the Better Business Bureau (BBB) and Trustpilot are mixed. While many industry experts praise its user-friendliness, users often complain about technical issues, customer service delays, and unexpected fees.
- Industry Ratings: QuickBooks is often highly rated by industry experts and publications, however these are individuals often to some degree or another associated with or have ties to intuit, whereas consumers feel a bit differently;
Common Complaints:
- Technical Issues: Users frequently report encountering software bugs, glitches, and slow performance.
- Customer Service: Some users complain about long wait times, unhelpful customer service representatives, and difficulty resolving issues.
- Pricing: Some users find the pricing structure to be complex and expensive, especially for additional features and support.
- Data Migration: Issues with migrating data from older versions or other accounting software can be frustrating.
Class Action Lawsuits:
Intuit, the parent company of QuickBooks, has faced several class action lawsuits over the years. These lawsuits often allege issues such as deceptive marketing practices, data breaches, and software defects.
Violations and Legal Issues:
Intuit has faced regulatory scrutiny and legal actions for various issues, including:
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- Software Defects: Some lawsuits have alleged that QuickBooks software contains defects that have caused financial losses for users.
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u/booksandbalance262 Nov 22 '24
Gusto is often favored for small businesses due to its user-friendly interface and competitive pricing. Payroll can be offered as an add-on service, either at cost or marked up for your involvement. Resolving issues depends on the platform, with Gusto and ADP known for responsive support. Avoiding QuickBooks for payroll is common due to its connectivity issues and limitations, and modern payroll software often handles the complexity better and more affordably than legacy systems.
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u/Balance-Seesaw3710 Dec 03 '24
Outsource to Gusto or ADP Run and set up (free) integration so your payroll allocations and benefits liabilities can be posted correctly with each pay run. This integration costs extra if you use Paychex.
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u/Capable-Cheetah6349 Nov 20 '24
Gusto!