Automation For The People

More Automation

A shining example of Internet payroll is QuickBooks Payroll Service from Intuit. You simply upload employee hours and other pertinent information already in the QuickBooks accounting program over the Internet two days before payday. A transaction report is downloaded, so you can review it and, with a few mouse-clicks, add the necessary debits and credits to the appropriate accounts. All data transmissions are encrypted before being sent over the Internet.

Donna Piehl, co-owner of Alpha Tool Co. in Franklin Park, Illinois, finds this payroll service complete enough that she can do the company payroll from her vacation home 400 miles from the office. Piehl, 46, figures the 200 hours per year she used to spend in the office doing her weekly payroll has been cut to 12. Most of the time savings, she says, comes from not having to deal with government reporting requirements.

The service's shortcoming is that it's only available to the estimated 2.5 million QuickBooks users; not even the 3 million businesses that use Intuit's Quicken personal finance manager to keep their books can use it. Fortunately, a simple file transfer can upgrade you from Quicken to the $120 QuickBooks99, an amount you can probably recover in savings during the first year of using Intuit's payroll services.

A small business with five employees and a biweekly payroll can subscribe to payroll and tax-deposit services for $30 per month. Add $15 per month for direct deposit of employee paychecks, and, with a few extra charges, the annual bill comes to around $555. That's an approximate 35 percent savings over the $845 per year the Beacon Research Business Consumer Guide says is the national average for full-service biweekly payroll costs for a company with five employees. Paychex's prices vary among its branch offices, but the same services typically run well under $1,000 annually, depending on services chosen. ADP's charges also vary but are estimated to be $800 annually for basic payroll and tax filing services.

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This article was originally published in the January 2000 print edition of Entrepreneur with the headline: Automation For The People.

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