I don’t often have time to write about what’s going on with my actual business, but when I do, I like to provide some advice and recommendations for anyone scouring the internet looking for such things from people like me (as I often am). Since it’s (delayed) Tax Season, payroll is on my mind, and I’m currently having some issues with my service, Wagepoint, that I figured I’d share since you wouldn’t really know about them unless you’ve used the service.
First off, the positives:
they are as cheap as they claim to be: $22/payroll is about as good as it gets.
the interface is reasonably easy to use: after filling out all of the forms and supply all of the necessary documentation (which - I won’t lie - is pretty cumbersome, but I assume all that regulatory stuff is beyond their control and it’s like that with any service), the site steps you through the payroll process (hours, pay, reimbursements, etc.) and eventually spits out a report and does all the necessary money-shuffling.
Would it be nice is you could put in an hourly wage and have the site calculate total compensation rather than add that up yourself? Sure, but that’s not the issue. The problems (for me) occur later when you’re trying to reconcile everything. See, as far as I (and the customer service people I complain to on a fairly regular basis) can tell, Wagepoint doesn’t provide an itemized year-end total calculation of everything, from taxes to wages to payroll costs. So there’s no easy way to reconcile everything.
As a small-business owner, you’ve got enough to worry about without fussing around with tax withholdings, deductions and all that stuff. I don’t have to go into detail: if you run payroll at all (and I mean at all - I do it a few times a year for one person), you know what a hassle and frustration it can be to shift gears from whatever job you’re working on to sorting through a pile of numbers and making sure they all align.
That’s where software is supposed to come in: you pay somebody some money, and they grant you access to their convenient tool that keeps track of it all for you, runs all the numbers, puts them in the right places and does are the necessary paperwork.
But the problem with not doing it yourself is you’re trusting someone else to keep track and provide you with a full and accurate accounting of what they did. I lost out on a small deduction for my company this year because my year-end report didn’t include federal unemployment-tax withholding, so my accountant didn’t include it in my return. Sure, the accountant perhaps should have noticed it was missing and asked me about not it, but Wagepoint’s year-end report should have been comprehensive enough to include it. I’ve approached the company about these deficiencies, so we’ll see how they respond.
The point of a service is that you pay to not have to become an expert in whatever it offers, but between Wagepoint’s garbled reports and my accountant’s reticence to think beyond the spreadsheet on the screen, I’m having to become a tax expert anyway to fill in the gaps for my own best interest.
You might wonder why I remain with a service that has such significant issues. Well, sunk costs, I guess. I’ve already been down the road with these guys just to get to this point, and I’m sure I’d have to do that all over again with someone else. This was my first year not only with Wagepoint but also doing corporate taxes, and I realize there are going to be bumps along the way that need to be ironed out. I can work with anything if I know what to look for. The issue was I didn’t know what I didn’t know. I’m starting to get to know that now.
Also, it was a small amount that’s probably offset by the low cost I pay to use Wagepoint. Yeah, a more-expensive service would be an expense that reduces my tax bill, but it’s still an expense that also reduces my profit.
And would they really add that much? We’ll see. Perhaps in another year I’ll be familiar enough with Wagepoint’s particular quirks to avoid such head-slapping omissions, but if not, maybe it’ll be time to consider another service.