Payroll Processing Service

Paychex 4Q results rise; revenue up on purchases

Payroll processing company Paychex Inc. said on Wednesday that its fiscal fourth-quarter profit edged higher, thanks in part to revenue boosts from recently acquired units.

For the three months ended May 31, Paychex said its net income rose to $118.9 million, or 33 cents per share, up 3 percent from $115.5 million, or 32 cents per share, in the year-ago quarter.

Revenue rose 5 percent to $522.7 million, from $496.2 million last year.

Analysts, on average, were expecting profit of 33 cents per share, on revenue of $514.3 million, according to data provided by FactSet.

Paychex said the quarter's gains reflected several acquisitions.

The purchase of software maker SurePayroll in February helped lift revenue in its largest unit, payroll service, by 5 percent to $356.9 million. Excluding the contributions from that purchase, revenue would have risen 3 percent.

Another acquisition, ePlan, completed during the fourth quarter, helped boost revenue in its human resources unit by 9 percent to $153.5 million. That would have been up 8 percent without ePlan, the company said. That was a slower growth than seen in the first three fiscal quarters, Paychex said, because of fluctuations in adding and keeping client employees as health care rates change.

For the full fiscal year, Paychex said its profit rose 8 percent to $515.3 million, or $1.42 per share, from $477 million or $1.32 per share last year. Revenue rose 4 percent to $2.08 billion, from $2 billion the prior year.

The full-year results included a charge of $18.7 million, or 3 cents per share, to increase reserves held for legal proceedings. Costs associated with the SurePayroll buyout cut another penny off earnings per share.

Acquisitions added customers to its rolls. Paychex said it would have seen a 0.9 percent drop in its client base if it hadn't bought the other companies. That reflected a lack of growth in new business starts, the company said. However, fewer clients went out of business or had no employees during the year.

As of May 31, Paychex had about 564,000 clients

President and CEO Martin Mucci said checks per client rose 2.1 percent for the year after falling in 2010. "While the sales environment is still challenging, we have seen improvement in the latter half of the fiscal year in our core payroll sales," he said in a statement.

Paychex expects profit for the current fiscal year to rise between 5 percent and 7 percent, implying net income between $541.1 million and $551.4 million. Wall Street was predicting net income of $546.5 million, with estimates ranging from $532.3 million to $556 million.

How Payroll Outsourcing Services Work | Human Resources Outsourcing

In running a business, you will surely encounter tasks that involves payroll. A payroll is considered as a record of employee’s salaries, bonuses, deductions, and positive aspects. It is an integral component of human resource management that is essential in running your own company.

Payroll systems indicate the ways on how you pay your employees. It can be run by an in-home human resource department or by means of payroll outsourcing. The choice depends on the status of the firm, the size, and the number of employees involved. Nonetheless, several believe that outsourcing payroll services support entrepreneurs save funds and time in operating the business.

Payroll outsourcing is 1 of the leading company solutions provided by businesses that specialize on human resource management. It works by supplying you services in managing your employee’s accounts monthly. The only factor that you want to do is to provide them the data they want.

Every single month, you will be submitting your employee’s info to your payroll service company. This will decide the quantity of salary they will obtain. It will contain the period or coverage of the salary, hours they have worked, overtime, taxes, and advantages. Your payroll service business will then compute the sum of your employee’s payroll and send to you a copy of it including the soft copy of pay slips.

After receiving the copy of payroll, you require to review it for further modifications. Once you have approved the sum of the payroll, your payroll service company will proceed to the payroll process. They will be processing your employee’s salaries, bank accounts, and taxes and print a copy of their pay slips and that’s it. Despite the fact that the process looks straightforward, organization experts think that the main benefit of payroll outsourcing is that it saves you time and cash.

There are many risks in keeping an in-house payroll team. Paying a team to compute your finances is not an assurance that they will be performing accurately. You will be held liable for any financial discrepancy guided by the law. With the help of payroll service organization, you don’t want to worry about discrepancies as they will be the ones responsible in keeping your legal finances accurate and correct.

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