Save as you pay

Kevin Kevany discovers that when it comes to choosing a suitable payroll system, the range of options is wider than ever.
Tauranga’s Business Resource Group’s Maggie Curtis reckons she ‘knows a bit’ about payroll and accounting systems for SMEs. Among her clients is a health and social service provider, with contracts to deliver services to the public sector. Needless to say, they are required to provide extremely detailed reporting about the delivery of particular tasks within those contracts. This all needs to be done over specific time periods to maintain their contract funding; so being able to deliver this is crucial.
The company particularly needs to be able to enter staff time, by authorised task code (required reporting), as well as by contract and by funder – and then to have this flow through to payroll for employee payment, plus their contract and grant funding reports.
And, this service provider also needs to be able to see their profit and loss by company and profit and loss by contract.
Previously, they had to enter staff time into their payroll system; then enter payroll information into their accounting software; and then manually go back through their timesheets to extract specific coded tasks against time and put this into Excel – all this to provide the required reporting to the funder.
No prizes for guessing that all this resulted in very detailed and ‘heavy’ reporting, with a lot of room for error.
Curtis’s solution? Implementing Reckon QuickBooks with Payroll (in this case, the client was already onboard with their accounting software) which enabled them to enter staff time for payroll processing and payment and, at the same time, cost this time to contracts by funder, and code staff time by specific task code. All of this flowing through to the required reporting, processing and payment of payroll. Job done!
Essentially this met the brief of ‘one data entry point’, branching out seamlessly to many sectors of the company for reporting and processing purposes. Cost savings (taking out the ‘triple-handling’), the exclusion of potential errors and the streamlined efficiency made for general happiness all round.
The industry which has sprung up around payroll, in all its formats, is testimony to the efficiencies and cost savings which new technologies, innovation and service bring to the table. Flexible new programmes are freeing business owner/managers from what was an enervating and fraught task, which ruined many a month-end weekend and inevitably left a platoon of unhappy employees the day after payday (albeit nowhere near Novopay proportions!)
With payroll being such a competitive sector, there is every option you can dream of and at reasonable rates. Which means the DIY option is now extremely rare.
The real issue facing business owners is choosing what is right for your company now and into the future. It’s bad enough getting the ‘now’ right, but how can you anticipate technological changes (such as every member of staff carrying a smartphone with an app linked to a scan function that does it all, with a daily consolidation); new laws, contracting and part-time workers becoming the norm, etcetera?
The answer is you cannot. So, we asked a number of reputable companies ‘What makes them so suitable?’
Client-focused service
“Not all payroll systems are created equal,” says Martin Gleeson, founder and CEO of iPayroll, “but when you take out all the gee-wizardry that pops out from time to time in this competitive industry – and we’ve had a few of those including our ‘payslip kiosk’ and ‘iPayroll Giving service’(with more to come there), we believe the best solutions are based on client-focused service.
“And that’s what our thousands of customers have been telling us for more than a decade as we have moved them through the early SaaS period, into mainstream cloud solutions. As well as having full access to their organisation’s data in the cloud our customers also have free access to our excellent helpdesk, because we know that SME owner/managers are all busy people and need immediate responses to their queries,” says Gleeson.
iPayroll was established in 2001 as an Internet-based payroll service. “Now iPayroll is New Zealand’s largest listed online IRD PAYE Intermediary, processing upwards of $1.5 billion of customers’ payrolls every year,” says Gleeson. “This is more than double our nearest competitor, based on their own declared website numbers.”  
The company also offers iPayroll Professional to a growing market of independent accountants and bookkeepers incorporating payroll into their services. iPayroll is compatible with all leading accounting software including Xero. Gleeson says their Professional Services model operates similarly to the My Xero service.
iPayroll has also successfully launched ‘CloudPayroll’ for their Australian clients, and for New Zealand firms paying staff in Australia.
“We have quickly established ourselves as experts in the trans-Tasman payroll field and have the capability to conform seamlessly to the very different and frequently-altering tax regimes and legislation in New Zealand and Australia,” says Gleeson. “That’s taken some doing, I can tell you – especially when considering the variations between the Australian states.”
Smart followers
All the payroll providers NZBusiness spoke to are out to exceed the expectations of their clients – focusing heavily on service and support.
“I’m proud to say that a recent customer survey found 95 percent of clients rated our support as ‘Very Good or Excellent’,” says IMS Payroll GM Patrick Hegarty.
IMS Payroll, with more than 10,000 companies using its payroll system, has recently celebrated 30 years in the business.
“The secret of our success, on top of that support factor, is that we continue to change and adapt our software to new technological advancements, and take our customers with us, when they are ready to move on to the next level.
“We are smart followers. Scalability is a very real benefit we provide. As our clients’ business grows, our system can be adapted to suit. They won’t grow out of it,” adds Hegarty.
“We’ve just helped Diagnostic Laboratory Services to transfer from paper-based timesheets and leave forms to the online versions: IMS Online Express and Max.”
Howard Webb, DLS’s payroll manager, says they were finding the manual systems cumbersome and time-consuming. “Increasing administration efficiency and streamlining our financial procedures are a big focus for us.”
Online Express allows staff to securely access their leave balances/forms, payslips, details with a personal password, explains Hegarty. “When they apply for leave through the secure website, managers are sent a notification email, as is the staff member when it’s approved or declined.
“It also builds a history of each staff member so it is easy for them to see how their leave is tracking and reduces enquiries to payroll admin staff. Transactions flow directly into the payroll, saving time.”

Integration with accounting software
After an unexpectedly long delay, accounting software providers have decided they are no longer going to leave the payroll function to specialist providers. They are offering payroll as part of an integral package. So there’s a further option.
MYOB recently launched MYOB LiveAccounts (online accounting software with full payroll functionality built-in at no extra cost) as well as a new suite of cloud-enabled products in its AccountRight Live family. Their GM Julian Smith is on record as saying “the future of payroll is in the Cloud”.
“The latest cloud or cloud-enabled payroll systems are set to make a considerable difference to the way employers manage payroll,” says Smith. “Not only does the convenience of ‘anywhere-anytime access’ to an online payroll product mean you can run a ‘pay’ whenever and wherever you need to – from home, on the road, late at night – reflecting the way busy business owners tend to work, but it also means your product is always up-to-date with the latest payroll legislation.
“You are always on the latest version and any new compliance or legislative changes will be automatically updated, to be ready as soon as the new requirements come into force. We believe we’ll see a tipping point for local employers, as more and more businesses begin to see the benefits of seamless online payroll management,” he says.
Smith cites the pending Employer Superannuation Contribution Tax as yet another reason to opt for MYOB LiveAccounts, which integrates key business functions – accounts, banking and payroll – into one online solution.
“As part of a raft of Kiwisaver changes announced in Budget 2012, the tax exemption on employer contributions to employee’s Kiwisaver was ended. This means that the employer’s contribution will now be taxed and collected as part of the PAYE scheme.
“However, these contributions are not calculated as part of PAYE, but are instead considered part of the employer’s contribution towards their employees superannuation, and so fall under the Employer Superannuation contribution,” Smith says.
For businesses using a payroll program like LiveAccounts with payroll, changes like this will be handled automatically, he adds.
Reckon has a similar offering. Reckon QuickBooks Hosted with Payroll 2012/13 is the online version, which allows the user to backup data to their own desktop, so they can ‘control and own their own data’ – but it is accessible anywhere and anytime via the Internet. But, in keeping with the competitive payroll sector, it is different. It combines payroll and job-costing in one package – and ultimately, that makes it much easier for a business to streamline its business processing and ensure reliable data is continually being produced in the most efficient way.
“In a nutshell,” says Catie Cotcher, GM Reckon NZ, “that gives SMEs the confidence they are not losing money or time, and they can be assured that their business is running at its optimum.
Cotcher is quick to point out that Reckon’s role is not only to provide cloud solutions, but to provide innovation and allow for ease-of-upgrade and enhanced functionality in all they do.
“We understand our customers need to be mobile and able to manage the day-to-day running of their businesses, but we also understand they want to know those solutions are secure, reliable and innovative, so that they are ultimately successful for their bottom-line.”
Data security is big with Reckon too.
“SMEs need to know their data is secure, so electronic banking features make it easier to pay staff direct from the desktop, with secure password protection. There is also intuitive navigation, graphical screens and quick spreadsheet data entry,” says Cotcher.
And businesses like the idea of saving time and money with emailed payslips and payment summaries, which can be sent as soon as the payroll is finalised.
Crisis-proven
If you are of a more cautious bent and like the concept of a local company – determined, crisis-proven and more – take a look at Christchurch-based provider PayGlobal.
“What our clients have learnt is that planning for the unthinkable needs to be part of the plan,” says CEO, Hugh Martyn. “The last thing our customers need worry about, if a disaster strikes, is whether they can process their ‘pays’; and the last thing their staff need to be worrying about, when dealing with a disaster is whether their pay will be in the bank when they expect it.
“PayGlobal is focused on providing a solution to customers which is going to add tangible and measurable profit improvements, utilising technology to help businesses better manage their staff, and allow managers to focus on running the business, rather than being tied up with administrative detail and processes.”
They are happy to spell out those savings too. Goulburn Valley Water, which provides water and wastewater services in Victoria, Australia, is a good example of the return on investment PayGlobal can provide, according to Martyn.
“After the implementation of PayGlobal, conservative estimates show the company is saving around $70,000 annually on timesheet entry, and time spent processing payroll has been reduced by more than 50 percent.
“PayGlobal is firmly focused on the future too, having come through the two earthquakes with flying colours.
“We have invested heavily in our own private cloud, PayGlobal Online Services (PGOS). Already, more than a third of our New Zealand customers have made the move and we expect the same in Australia in 2013.
“We see access to the right information in the right format for the selected audience as a competitive advantage for our customers. Being able to make proactive decisions based on trending information or KPI dashboards will be the norm in the future,” believes Martyn, whose Exolvo Business Intelligence (BI) does just that.

Horse before cart
And just when you thought you’d heard it all, meet a very different company in this space – iDt Limited. They believe they’re ‘putting the horse before the cart’ – that’s especially so if you are in the 10-100 employee category.
Here’s their promise: capture accurate employee attendance, roster employees, automatic calculation of hours, adding overtime and allowances, and interfacing directly with your payroll system. That’s just for starters.
“iDt is not a payroll company per se,” says Richard Penny, iDt’s marketing and strategy specialist. “Our specialisation is in Time and Attendance solutions and in giving businesses the tools to help manage your labour force.
“If a company with 50 employees overpays each by just one dollar a day, it would lose $13,000 in extra wages over the course of a year. Our system negates the need for fallible manual time sheets or punch clocks, takes hours out of the payroll process task, and ensures that the payroll is accurate.
“A typical manual process, still prevalent in SMEs, involves an employee accurately completing their timesheet then passing it to their manager/owner for amendments and approvals. Timesheets are then sent to a payroll office to calculate hours, and payroll will often spend time calling back to check details.
“We use a number of options for data collection; from basic time clocks to biometric finger-scan units, swipe cards and PC touch screens. The information flows into our T&A software, ADI Time. This processes the information, based on the parameters or rules we tailor for your operation.  
“Once approved, the hours can be exported directly into your existing payroll system and integrated with your HR systems and accounting systems if required. It is compatible with all existing payroll systems,” says Penny.
“With an automated timesheet system, it’s estimated that you could save more than five percent on your payroll costs and reduce payroll preparation by up to 80 percent. Inaccuracies, overpayment and hours of unnecessary processing can be things of the past.
“What’s more, once installed, the system practically pays for itself,” says Penny.
He is particularly excited about iDt’s cloud-based offering which was rolling onto the launch pad as we went to press. Senior consultant, Hayden Burnett takes up the story: “This will be a first for New Zealand. We are very proud of our own home-grown software which will bring time and money-saving capability that has historically been cost-prohibitive, within reach of SMEs.
“This is an exciting development for those who currently rely on manual processes, with all the distractions for admin staff and, too often, the owner/managers themselves, from their core business.
“I believe the ‘magic wand’ in this offering is that we will be able to offer SMEs, for the first time, the power of our ‘rule interpreter’ – a highly sophisticated, but simple to use, function which applies complex rules around hours and allowances accurately and consistently – at a truly affordable cost.”
iDt has also developed a special touch screen unit to go with the new offering.
“And, of course, you can see where your labour costs are at a glance, daily – a capability which will be vital where contractors and casuals are involved on a project, given it will highlight any deviation from your estimates – an employee taking the afternoon off, or any other exceptional behaviour outside the tailored rules applying to your business,” says Burnett.
“For the cost of a pie and a Coke a week, per employee, you are going to get significant savings on your payroll and processing costs.”            
Kevin Kevany is an Auckland-based freelance writer.
Email [email protected]

Websites to visit:
www.idt.co.nz
www.ipayroll.co.nz
www.imspayroll.co.nz
www.myob.co.nz
www.payglobal.com
www.reckon.co.nz