When selecting the right payroll product for your client, you need to take several factors into consideration. You must clearly identify your client’s needs and gain an understanding of what tasks he or she is capable of performing, related to payroll. By choosing a payroll product that integrates with QuickBooks®, your clients will reduce errors and save time.
What Products are They Using?
In order to select the right payroll subscription, you will need to know what software product your client uses: Is it QuickBooks Desktop (QBDT) or QuickBooks Online (QBO)?
QuickBooks Online: Simple Start, Essentials & Plus Integrated Options
Payroll for QBO cannot support job costing or class tracking because those features are only currently available in the Payroll for Desktop.
“Do It Yourself” QuickBooks Enhanced Payroll (QBOP). This is good for clients that want to process their own payroll, as well as e-file and e-pay federal, state taxes, and quarterly and annual payroll tax returns, including year-end processing of W-2s. You should keep in mind that with this option, your clients will have set this up themselves. For check stubs and W-2s to be accurate, they will need to be careful with the setup. If you want to gain an understanding of the complexity of the setup, read our blog on how to set up payroll correctly the first time.
“Full Service” QuickBooks Full Service Payroll (QBFSP). This option is good for businesses that want to process their own payroll, but have their taxes and payroll tax returns filed for them. Intuit will e-file and e-pay federal, state taxes, and quarterly and annual payroll tax returns, including year-end processing of W-2s. Free setup and U.S.-based ongoing support is included!
Note: As a consultant, the free setup done by Intuit will save clients large consulting fees that are usually associated with setting up payroll from January 1 to the current date, and allows clients the flexibility of converting any time of year. The free setup is for payroll processing purposes only; the transactions related to the year-to-date payroll are not entered.
View the matrix for the different options here.
QuickBooks Desktop (QBDT): QuickBooks Pro, Premier and Enterprise Editions
QuickBooks Desktop allows you to track job costing through payroll.
“Do It Yourself” QuickBooks Enhanced Payroll. This is a good option for businesses that want to process their own payroll, and do their own e-file and e-pay federal, and state taxes, quarterly and annual payroll tax returns, including year-end processing of W-2s.
Pro Tip: QuickBooks Enterprise Gold comes with Enhanced Payroll subscription; there is no need to buy it separately. Learn more here.
“Full Service” QuickBooks Assisted Payroll. This option is good for businesses that want to process their own payroll, but have their taxes and payroll tax returns filed for them. Intuit will e-file and e-pay federal, state taxes, and quarterly and annual payroll tax returns, including year-end processing of W-2s. Note W-2 self-print is free, or you can have Intuit print and mail all W-2s for an additional fee.
This Full Service Payroll option provides the capability for both jobs costing and class tracking for specific niche industries that require that feature. With this Full Service option, Intuit will also impound the taxes for payroll 24 hours before the scheduled check date. This is the only Full Service option that provides that feature.
Note: Assisted payroll covers all states except Indiana and Wyoming, and does not file any local taxes. It also requires that you are on a supported version of QBDT.
View the matrix for the different options here.
Payroll Options in Stand Alone Product: No QuickBooks Necessary
“Full Service” Intuit Full Service Payroll (IFSP). This option is suitable for businesses that want to process their own payroll, but have their taxes and payroll tax returns filed for them. Intuit will e-file and e-pay federal, state taxes, and quarterly and annual payroll tax returns, including year-end processing of W-2s and 1099s.
This is the only stand-alone option that will allow you to have the flexibility to run payroll, only while having the option to export a data file to update your QBO and all versions of QBDT. This gives clients who are on QBDT the flexibility to be mobile because it provides a platform that can be accessed online, anywhere the mobile application allows for them to conduct payroll from a smartphone or tablet. As a result, they are no longer restricted to using one computer to run payroll. It is the only option that allows you to pay subcontractors by direct deposit and files 1099s/1096s for your clients. Intuit Full Service Payroll cannot support job costing or class tracking because those features are only currently available in the Assisted Payroll for Desktop.
Who Will Pay the Payroll Taxes and File the Payroll Tax Returns?
Another important consideration is who is going to take on the liability. If you are concerned that your client might be too busy, could make mistakes or just isn’t savvy with payroll, then we recommend that you choose Intuit® Full Service Payroll, where Intuit takes over the liability and the client’s payroll will be guaranteed to be in compliance.
Do It Yourself Payroll. The client makes the payroll tax payments and files the payroll tax returns on his own. Be very careful when choosing this option; without the proper experience and knowledge of managing payroll, this can become very problematic and costly for your client.
Full Service Payroll. The liability for making payroll tax payments and payroll tax return filings shifts to Intuit. This allows your client to be compliant, reduces the cost of penalties, and provides him or her the ability to focus on running the business without the headache of data entry and time-consuming management to properly handle payroll.
We recommend setting up your client for success from the beginning by starting with a Full Service option, first, and then potentially downgrade in the future, rather than trying to upgrade. If your client tries to upgrade, Intuit conducts an audit to ensure your client is eligible to move to Full Service Payroll. This may take a few weeks and there is no guarantee that your client will be accepted to upgrade to a Full Service Payroll.
Most clients that choose the Full Service payroll option are usually relieved that they can focus more time on their business, rather than worry about being in compliance. We hope these tips lead you to successfully choose the right payroll product for your clients!
Editor’s note: This is the first article in a new series of articles on payroll by Carrie Kahn about payroll. Be sure to read Carrie Kahn’s second article "How to Make Payroll More Efficient for your Clients." and "How to Prepare Your Clients to Pay and File Payroll Tax."
