Outsourcing payroll to Gusto or a local provider?

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#1
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I want my firm to be a "one stop shop" with value billing for outsourced accountant services.

I think payroll is an integral part of that model and I don't want to send clients on their own to Gusto or ADP to potentially mess it up. However, I also don't want to be too involved in payroll so I'm looking for the most hands off provider I can find at a reasonable price. I worry with the large providers like Gusto will leave me hanging if there's ever an issue.

If I partner with a small payroll firm, I wonder if I could still act as the liaison between client and payroll in order to provide that "white glove" service.

For those of you that have partnered with a small local payroll provider, what was the experience like?

What were the logistics of the partnership in terms of engagement letters, coordination with client, billings, etc.?

What kind of prices are we talking about for a small firm vs a Gusto price of ~$40/month?

Appreciate any input.
 

#2
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It's very difficult in my area to find a competent and professional third-party who wants to do payroll and employment tax returns without also wanting to do the income tax returns and bookkeeping. There's no money in payroll, and IMO their stand alone price for payroll is unlikely to beat Gusto by much, if they beat them at all.

You're aware Gusto would cost $552 annually for a one-man S Corp using the upcoming prices ($40/month plus $6/employee/month). Anyone willing to compete with that is going to be working for cheap.

My experience hasn't been as you describe. "Sending clients on their own to Gusto." I setup my clients up on Gusto and still maintain a great deal of ownership over that work. It's just heavily automated now.
 

#3
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ManVsTax wrote:It's very difficult in my area to find a competent and professional third-party who wants to do payroll and employment tax returns without also wanting to do the income tax returns and bookkeeping. There's no money in payroll, and IMO their stand alone price for payroll is unlikely to beat Gusto by much, if they beat them at all.

You're aware Gusto would cost $552 annually for a one-man S Corp using the upcoming prices ($40/month plus $6/employee/month). Anyone willing to compete with that is going to be working for cheap.

My experience hasn't been as you describe. "Sending clients on their own to Gusto." I setup my clients up on Gusto and still maintain a great deal of ownership over that work. It's just heavily automated now.


There are certain businesses I would eventually want to go after (once I've grown my firm) such as a dog daycare with about 10 employees (hourly). I wonder if Gusto would be up to the task of something like that or if I would be limited to the super simple 1-2 man micro enterprises.
 

#4
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My target is pretty much single shareholder S Corps but I do have a few who have employees. Regardless of the payroll situation I have everyone on Quickbooks Online. Most of my clients I have using the Quickbooks Payroll Service set to auto run without either of us doing anything and then I tie everything out monthly/quarterly but let Quickbooks file the forms they can and remit liabilities. The clients that have employees with varied hours week to week I don't have fully automated but the client still runs their own payroll in Quickbooks and then I do after-the-fact with tie outs, form submission, and liability payments. I charge $100/hr regardless of automation.

10 employees is probably my cutoff where I send them to ADP, I get Accountant Access, participate in the setup, code out the GL, and then I pull the payroll import every pay period to Quickbooks with a quick review/tie out.

I always require an Accountant bank access login and I do the bank recs monthly for each entity. All of that guarantees I have super clean books at 12/31 and can crank those returns by Feb.
 

#5
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taxaflaxa wrote:There are certain businesses I would eventually want to go after (once I've grown my firm) such as a dog daycare with about 10 employees (hourly). I wonder if Gusto would be up to the task of something like that or if I would be limited to the super simple 1-2 man micro enterprises.


Yes. Gusto can handle 10 employees. You can set accrual of sick time and vacation. Also employees get their own portal and they can use it to submit time off requests. Gusto also handles benefits reasonably well.

You'd just need to run payroll for the hourly employees or the client would. It's not that hard with some basic training. The portal is rather intuitive.
 

#6
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ManVsTax wrote:
taxaflaxa wrote:There are certain businesses I would eventually want to go after (once I've grown my firm) such as a dog daycare with about 10 employees (hourly). I wonder if Gusto would be up to the task of something like that or if I would be limited to the super simple 1-2 man micro enterprises.


Yes. Gusto can handle 10 employees. You can set accrual of sick time and vacation. Also employees get their own portal and they can use it to submit time off requests. Gusto also handles benefits reasonably well.

You'd just need to run payroll for the hourly employees or the client would. It's not that hard with some basic training. The portal is rather intuitive.


That doesn't sound as hard/complex as others have made it seem. I think Gusto is still the move for me. While I don't have TOO much prior payroll experience I think I know enough to be able to utilize a platform that is also designed for the typical preoccupied business owner.
 

#7
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Best advice I can give is to watch the videos on their website and Youtube, and to schedule a call with them if you like what you see.
 


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