QBO has long been unfavourably compared to Xero because it did not have an integrated Payroll solution. For almost a year, third party product WebPayroll provided direct posting into QuickBooks but still required the user to log on to and navigate in two products. After some beta testing in October, third party product KeyPay has now been released as an integrated feature of QBO. Intuit is hopeful that this will address the functionality imbalance with Xero – or even place it ahead, as Inventory and Sales Quotes are features of QBO that are yet to be delivered by Xero.
The solution QBO has provided is similar to the approach that Xero took when in April last year it integrated PayCycle into its core product. So in QBO, Employees is now an option on the side navigation bar, in the same way as Payroll is an option on the header navigation bar of Xero. So to all intents and purposes QBO now has an integrated payroll solution and its claim ’QuickBooks Online integrated payroll solution has been applauded by early adopters’ could well be justified.
The benefits of this solution are that Intuit has taken an existing cloud-based comprehensive and robust Australian payroll solution and incorporated it into its core product so there are no issues of non-compliance or lack of functionality as is frequently the case with new products. However the level of integration of KeyPay into QBO in terms of a consistent user experience is questionable.
There is a delay of approximately 8 seconds after clicking on the Employee button on the Navigator bar before the Employee centre is displayed which I found very frustrating after a while but I guess that is because QBO is actually linking into KeyPay itself. Happily the initial screen is reasonably consistent with the Harmony user interface used elsewhere in QBO. I see a neat graph of my payroll costs, the status of payruns and a list of recently viewed employees.
However after this initial screen, all other activities are virtually pure KeyPay. Apart from some colour changes and removal of the KeyPay navigation bar at the top of the screen, I could have logged directly into KeyPay. Still this probably isn’t a major hazard as Payroll is very much in a class of its own. You can’t after all do a ‘Quick Add’ of an employee as you can with a customer or supplier and you do need to follow a specific set of steps to process a payrun.
However I did raise my eyebrows when I went to map my payroll categories to the chart of accounts. Nowhere is the lack of integration more obvious than here. I am in QBO but to enable an account in the QBO chart to be mapped to a payroll category, I have to go through a procedure to ‘import external accounts’ before I can select the ones I want to have available to payroll. The messages when I select the Import External Accounts option is ‘You can import accounts from external services to allow automatic posting of pay run transactions’, but I thought this was an integrated solution!
Having said that I do find that once I have overcome this mapping hurdle, posting the payroll transactions into the accounts is very straightforward and a great improvement on the solution in Xero which I have always found to be extremely clunky and prone to human error. In QBO, I hit just one button and everything is complete – in Xero there are three steps before the payroll transactions are passed into the accounts, no easy way of knowing which have been completed and there is a real risk of duplication of posting. With the KeyPay solution, although I could forget to post, I wasn’t able to post twice and it was a single step process – neat.
I did miss the absence of the Navigation bar on the left hand side of the screen once I had moved into Payroll. This is present elsewhere in QBO and I had to use the ‘X’ at the top right of to close out of a payroll function and get back to QBO proper. It would have been helpful to retain visibility of the navigator bar.
In another departure from consistency, Payroll Reports are accessed from within the Employee centre and not from the Reports centre – maybe this is for security reasons. But one function I failed to find was – when setting up users – how did you specify the user had or did not have access to Payroll? I set up a new user and that user had straight access to Employees and Payroll – did I miss something?
I am listing a feature by feature comparison of the payroll solutions offered by Xero and QBO as both are reasonably comprehensive and although I may prefer some features in one solution to the other, overall they are both acceptable. Some of the features of KeyPay worthy of note include (also largely in Xero):
- Automated payments to super fund via Click Super.
- Support for Self Managed Super Funds.
- Employee portal for self service of payslips, payment summaries and lodgement of leave requests.
- Import employee data from a csv file.
- Import Public Holiday calendar.
I don’t think I could automatically lodge the Tax File Number declaration with the ATO which I can do in Xero but apart from that, I was quite happy with the functionality.
So does this solution address the problem that QBO does not have integrated payroll? At first glance, yes it does but a deeper dive demonstrates that the solution lacks overall consistency with the rest of the product but on the plus side it allows for:
- Up to 10 employees free making it an affordable option.
- Just a single log in.
- A functionality rich solution.
My Verdict – a good solution, it needs a little more tailoring to improve the consistency of the user experience, but a good platform on which to build.