EFTPA Causes Growth for Payroll Outsourcers

As payrolls and taxes become more complicated, more businesses are turning to outside companies to handle their payroll needs.

“This is the way that business will be done in the future,” says Mike Echols, vice-president of operations for Employment Services of America in Monticello. “There is no reason for small companies to deal with payroll and benefits. It takes a lot of time, but it does not make them any money.”

Last year the federal government converted to the Electronic Federal Tax Payment System. Taxes can be filed through a special computer program using a modem or through a voice-mail system over the telephone. Companies that pay more than $50,000 in payroll taxes are required to use the computer method, but smaller businesses can choose.

“A lot of companies do not have the money or the human resources to make the computer conversion, so we try to take care of it for them,” says Travis Fink, owner of PaySolutions in Fayetteville. “Our goal is to get each company to where the managers do not have to think about payroll at all. We want to take away the headaches.”

Some certified public accounting firms do payroll for small business clients as an added service, Fink says, but few firms in the area specialize in that service. PaySolutions also has an electronic time-clock system for companies who pay by the hour.

In addition to payroll, Employment Services also manages benefits for its clients. Echols says he thinks his company is the only one in the state that also handles 401(k) investments, medical insurance, dental insurance and cafeteria plans.

Echols says the industry “is getting more and more competitive. Not a lot of people do it now, but the same few companies butt heads over clients.”