HOW WE DO IT: The Payroll Evolution at Nature Scapes

Nature Scapes, a full-service landscape company, recently began its 22nd year in the metropolitan Atlanta market. We employ just over 150 people during the peak season and most of our work, including landscape design and installation, irrigation and drainage, horticultural and arbor services is related to landscape maintenance in multi-family residential and commercial markets.

With a large staff of both full-time and part-time employees, Nature Scapes has managed payroll in-house for more than 20 years. Most of the advantages in doing so were perceived ones: Closer handling of cash-flow, better job costing, more flexibility in processing – if you made errors, you had more time to go back and correct them.

In 2003, with a three-person administrative staff (one of which was facing maternity leave) and several challenges associated with processing W-2 forms, our company decided it was a good time to outsource payroll beginning in early 2004. Our Accounting Manager Susan Brown explained that, although payroll was never a full-time job for any one person, facing that personnel shortage provided ample motivation to look at payroll companies.

Additionally, Susan and the rest of the management staff recognized payroll outsourcing as a way to relieve stress associated with the company payday, which comes every other Thursday. Everything from software and check-printing failures to check and tax-filing errors and their accompanying penalties had come up in the past, and having a professional company handle payroll could alleviate that.

In our search for a trustworthy company, we interviewed the two largest payroll handlers in the country and selected the one that seemed to be the most service-oriented. Susan notes that part of our search involved finding a firm that could handle the size of our company and also checking references of companies the payroll firm already works with. Representatives from the company came to the Nature Scapes offices for about half a day to train Susan and another member of our administrative staff on how to use the new software and process the payroll information. Prior to this meeting, we had provided the payroll company with all of our employees’ information, including names, addresses and pay rates, which they entered into the system for us. Because the software was easy to use and already included all of our employees’ information, the learning curve for the new program was small.

The changeover process from in-house to out-of-house payroll was relatively simple, but took some adjustments over the first couple of pay periods. Initially, we provided the payroll service with a report showing each employee’s year-to-date balance. The new pay-period information was put in and the checks were run. While Susan remembers dealing with differences in how withholdings were calculated, by the second pay-period, everything was worked out. For most employees, she said, the change-over was a non-event and paychecks arrived on time.

When Nature Scapes handled its own payroll, the accounting process started on Monday with all the time information for the pay period entered into the computer from paper time sheets. Checks usually were ready to be run by Wednesday, which didn’t account for time spent reloading information if the computer crashed, having to replace ink cartridges in the printer or stuffing envelopes. Come tax time, it also took several weeks to properly sort out W-2 information.

Now, we have a new time clock linked to the payroll software. Our crew supervisors still keep time sheets for their crews, which we use as a check against the computerized system. This helps us spot errors and track information, such as vacation time, sick days or days when an employee forgets to clock out. Once the payroll calculations are made, one withdrawal is made from the payroll account to cover all costs for that pay period, including tax deposits. Payroll checks are delivered to the office the next day with the checks already signed, in envelopes and ready for distribution.

Our payroll company assesses a per-check fee for their services. For Nature Scapes, the cost is about $250 per pay period. The fee includes everything from processing the checks to handling tax deposits and W-2 forms. Susan notes that when you consider the cost of missing a federal tax deposit or making other errors, the monthly cost to outsource payroll is well worth it. Likewise, even over just one year, outsourcing has resulted in more accurate payroll and W-2 reporting, eliminated late filing of payroll tax deposits, provided employees with additional benefits like direct deposit, hasn’t interfered with job costing and resulted in less activity in the payroll account. With the reduced stress in the office, our administrative staff has become more productive and employees are even more satisfied come payday. – Rick Barnes

The author is vice president of sales and marketing for Nature Scapes, an award-winning full-service landscape company in Lilburn, Ga. He holds a bachelor of science degree in horticulture and can be reached at 770/923-7023.