Jim Heeger "Documents" the Paperless Process

By Scott H. Cytron, ABC This month’s Ideas in Motion features Jim Heeger, president and chief executive officer of PayCycle, Inc., in Palo Alto, Calif. Jim’s experience with small business customers helps him understand the struggles they encounter when using online payroll services. Scott H. Cytron: What did you do before PayCycle? Jim Heeger: Just before joining PayCycle, I ran Adobe’s Creative Professional Suite business. I also spent a number of years at Intuit running various segments of their software and services for small businesses, so I have significant experience working with small business customers. I feel very lucky that the management team at PayCycle consists of people I have known before. The two founders worked in my group at Intuit. Martin Gates was the technical lead who wrote all of Intuit’s original payroll software, and Rene Lacerte was the business lead on the payroll business.

Jim Heeger, CEO PayCycle

JH: We work in both the accounting and small business arenas. There are 5.2 million small businesses with 20 employees or fewer. More than 50 percent of these firms still run payroll manually, which translates to a big opportunity for PayCycle.

We know that small businesses often go to their accountants first when they have any sort of finance related questions, including payroll. A business owner typically expects that his accountant will know about payroll and offer the service. PayCycle offers a service tailored specifically for accounting professionals that would like to offer client payroll.

PayCycle has had tremendous success with its software partnerships. Intuit offers PayCycle’s online payroll for QuickBooks or Mac, while Microsoft has offered PayCycle online payroll for several years with the small business edition of Microsoft Money.

SC: What makes this different from other online payroll service providers?

JH: Ease of use, electronic services and affordability. PayCycle makes it easy for an accountant to manage all aspects of client payroll, from paychecks to paying taxes and filing forms electronically, and can even set up a client to do many of the payroll tasks themselves, such as entering payday information.

PayCycle offers the most extensive electronic tax payment and form filing coverage among online payroll service providers. The ability to do electronic transmissions greatly reduces paperwork and the time an accountant spends on payroll.

Because we are affordable and do not “nickel and dime,” another important differentiator is our wholesale pricing for accountants and their clients. Our pricing is essentially flat at $14.99 per client, per month for the first five employees, with the only exception being the cost of additional employees at 25 cents per employee, per month. Otherwise, pricing is all-inclusive and simple.

For example, direct deposit is included in the price, as well as electronic tax payments and form filings. Our competitors, on the other hand, tend to charge for electronic transmissions and payments. Some will charge you a fee for setup; others will charge you for each transmission, plus a separate charge for each employee receiving direct deposit.

SC: When users contact you with suggestions on improving your online system, what are the top three requests they make?

JH: They love the ability to submit payroll taxes and file state forms themselves by clicking a button. Our accounting customers especially want electronic coverage in all 50 states, and many of our accountants run payroll for out-of-state clients. The fact that we are an online service makes this possible. PayCycle continues to work with the states in order to expand our electronic services.

We have a unique feature that enables accountants to share payroll tasks with their clients. One of our top requests from accountants was to have the ability to control how much access clients have to their accounts. This past August, PayCycle made it possible for accountants to give clients four different levels of access: either full access to all areas of payroll, setup and payroll access only, payroll-only access, or no access.

Even though a number of accounting software products offer payroll, I feel many users would still prefer to use PayCycle because we make payroll easy with our inclusive electronic services and ability to do payroll “anytime, anywhere.” We currently integrate with 12 different accounting software packages, including QuickBooks and ATX. We respond to product requests from our customers and will soon integrate with another popular product.

SC: Did Vista affect PayCycle at all?

JH: Unlike traditional payroll programs that are software-based, PayCycle is an online service. Therefore, we are not affected the way that software must work with a computer’s operating system. With PayCycle, you just open an Internet browser.

SC: What is PayCycle doing to ensure data and privacy are protected?

JH: We take great care to design and maintain security procedures that protect online and offline information . PayCycle encrypts information and protects it with 128-bit Secure Socket Layer (SSL) technology. We use firewalls and intrusion-detection devices to prevent unauthorized electronic access to the servers where client information is stored, and we isolate those servers in cages to prevent unauthorized physical access. Our employees may access this information only to help us provide the payroll service to our clients.

SC: What would you say to an accountant who has never offered payroll services to his/her small business clients?

JH: If more accountants knew how little time was required to do online payroll, especially with the convenience of electronic tax payments and form filings, they would jump at the revenue opportunity.

For accounting professionals, we offer an Accounting Professional program designed to help accountants set up profitable payroll practices, even if they do not have experience doing payroll. Our service is easy to use and we offer free support 12 hours a day, if an accountant ever needs to speak to a payroll expert. With PayCycle’s wholesale pricing, it is very easy to make money from client payroll. A recent study of our accounting customers showed that most enjoy 50-70 percent profit from payroll using PayCycle.

Payroll is a great addition to an accountant’s practice. It provides year-round, predictable income unlike taxes, which are generally seasonal. It’s also a “hook” to cross-sell other services.

SC: How do you think payroll service providers can be more prepared to respond to the needs of the marketplace?

JH: They need to continually survey their customers to understand their needs. PayCycle regularly surveys its small business and accounting customers. We also collect feedback at trade shows, web seminars and from our customer service representatives.

In addition, a company needs to focus on the needs of its core market segments. Very small businesses have different needs and concerns than larger ones.
 

SC: If you were deserted on an island and could have only one technology, what would it be and why?

JH: Fast Internet access – and I don’t care how it is delivered. For example, an Apple iPhone to go along with the Internet access would allow for e-mail and a web browser if it could get a signal. That would be great. I could even do my payroll on PayCycle!