Paychex Accounting Online

Kathy Yakal for GadgetGigs.com writes: Paychex Accounting Online was only released in late 2013, but the two integrated applications that comprise it have been around for a lot longer. The core accounting application is Canadian service Kashoo, which is now available as an integrated bundle with Paychex Online Payroll. The Paychex brand is more than 40 years old, however, and is quite familiar to the business community. Its payroll, human resources, and benefits-outsourcing solutions are well respected and used by more than a half-million U.S. businesses. Kashoo, on the other hand, is comparatively new; it’s a solid double-entry accounting website that’s easy to understand and use. But Paychex Accounting Online (from $27 per month, plus fees) lacks many of the features found in its competitors, such as purchase orders, comprehensive contact records, item tracking, and transaction categorization.

The hybrid approach is a great example of the evolving nature of small business accounting as it moves into the cloud. Some companies, like Intuit and Xero, provide a core accounting solution and a payroll processing application that are integrated seamlessly. Other organizations are partnering with one another and integrating related sites, as is the case with Paychex Accounting Online. This has been happening for years already, the best example probably being the Intuit App Center, which has hundreds of add-ons that extend the usefulness of QuickBooks desktop and QuickBooks Online Plus, in areas like CRM, billing and invoicing, and time/expense management.

Receivables and PayablesPaychex Accounting Online would best serve small businesses with modest accounts receivable and payable needs, but which need true double-entry accounting without having to understand the background debits and credits. It comes with a customizable Chart of Accounts (best customized by an accounting professional, who you can invite to watch over your activity) and standard financial reports: Balance Sheet, Profit and Loss, and Trial Balance. You can export these to PDF, Excel, CSV, and HTML formats. You can enter transaction adjustments, but dealing with debits and credits is best left to your accounting professional.

The site doesn’t use the term “accounts receivable.” Rather, you click on the “Income” tab to open your options there. You can enter miscellaneous income, an invoice, or a payment. A record template for your customers contains very simple contact information, with a few other drop-down lists for variables like Terms and IncomeAccount. The invoice template is roughly comparable to those offered by competitors in that it includes the basic fields for things like sales tax, terms, and due date. And you can email them to customers.

But you can’t assign invoices to categories like salesperson, division, or location, nor can your customers return a payment via credit card (there’s no support for merchant accounts). There’s no tracking of inventory levels (though a basic item record is available) nor alternative pricing (discounts, etc.). The only report offered here is Aged Receivables, whose only customization option is the end date.

The level of detail and customization is similar for accounts payable, or “Expenses.” You can fill in a form outlining an expense or bill, and record payments. Vendor record templates will serve simple businesses well, but they’re not as detailed as Xero’s, for example. Aged Payables is the sole report available here.

Banking in the CloudThe best online accounting and personal finance solutions (in fact, most of them, period) let you connect to the financial institutions where you have accounts and download transactions. Paychex Accounting Online is no exception. You simply select the name of your bank or credit card company and enter your login credentials for those sites. Paychex Accounting Online then makes a connection and does the initial download. You can also upload bank statements manually.

You can, of course, enter income and transactions manually, too. And you can transfer funds among accounts. But Paychex Accounting Online doesn’t offer the more sophisticated, ongoing bank reconciliation feature that Xero and QuickBooks Online Plusdo. It works similarly to reconciling on paper. You have to put a check mark in front of all transactions on the site that appear on your paper statement, plus mark off your online transactions on your bank statement. This seems like duplicate data entry, which online accounting was supposed to avoid.

A Logical WorkflowPaychex Accounting Online was clearly designed with the non-accounting professional in mind. Its user interface is clean and uncluttered, and uses language that laypeople would understand. The left vertical pane contains text links to every element of the site. First, of course, is the Dashboard, which is a little atypical for this type of website. The center of the screen, which normally holds key business numbers, contains two tabbed windows: one for entering income and another for expenses.

This layout is similar to what you see when you click on the individual Income and Expense links, though the Dashboard doesn’t display transaction history in the lower part of the screen. Your real-time business data–primarily account balances–appears in the right vertical pane. And there are no charts or graphs.

Links to other areas of the site appear in the left vertical pane. Unlike online accounting solutions that are more complex, Paychex Accounting Online is uncomplicated enough that everything is spelled out in this pane, even the individual reports (which are few). Click on a link, and the main working screen for that activity appears, rather than presenting another menu of sub-links.

The Paychex ConnectionWhile competing online accounting sites have slowly built their own well-integrated payroll applications, Paychex went the other direction. It built a new solution by facilitating the integration of Paychex Online Payroll with existing accounting service Kashoo, as mentioned earlier. You enter payroll information in the Paychex application and then import it manually to the accounting side. Payroll tax calculation and filing/payment are supported. Paychex does not publish prices; rather, you must ask for a quote.

Paychex Accounting Online is not a difficult site to learn fairly quickly, but anyone new to accounting will likely require some clarification and assistance, despite the app’s standard English approach to it UI—it’s just the nature of the accounting beast. The site supports users with a variety of help resources, including videos, webinars, online articles, chat and phone. Mobile access is available for both applications on iOS devices, but Android support is limited to the payroll app itself.

It’s good to see financial solution providers teaming up to give businesses application bundles that make sense. If you already use Paychex payroll services and want to marry them to very basic double-entry accounting functions, Paychex Accounting Online is certainly worth considering. At this point, though, if your company needs more functionality than Paychex Accounting Online offers, as well as complete, smoothly-integrated payroll processing, QuickBooks Online Plus, PCMag’s Editors’ Choice for online accounting, is a better choice.