Payroll City’s secret to success: software

For several years Payroll City was a one-woman show run by its owner Kathleen Fox.

She had about a dozen Colorado Springs clients and was zipping through their payroll needs. But, she grew frustrated when she couldn’t find a computer program that produced all the spread sheets and kept the data the way she wanted.

So, in 2008, she enlisted the help of her son, a mechanical engineer, who designed a computer program for her.

Since then, she’s gone from 12 clients in Colorado Springs to 200 in 20 states.

From July 2010 to July 2011, revenue at Payroll City was up 58 percent. With her new software program, Fox plans to grow to 1,000 clients within two years.

“I’m excited as to where we are going,” she said. “I see us as being a big player.”

For 20 years, Fox worked as an accountant or controller, mostly in small companies.

She always wanted to break out and start her own business. In 2001, she did. Payroll is a personal thing, Fox said. There are so many nuances — tips, withholding, child support, 401Ks and garnishments.

The biggest problem was getting her computer to talk to the client’s computer, she said. It meant a lot of duplication of data input and time spent re-entering employee names, address and payroll information, like social security numbers, job titles and tax deduction information.

“I decided I wanted to create my own software,” she said.

She had the ideas and her son Adam Fox had the know-how. His career as a mechanical engineer had him working on robotics and control systems, which led to financial analysis and computer programming. When Kathleen described the issue with the software, he went to work on it. He left his mechanical engineering job and joined Payroll City full time to write software.

“Now, I see the software as my robot,” Adam said.

In 2009, Payroll City launched its software program, designed to integrate with Point of Sale software, typically used by restaurants, hotels and retail stores. Payroll City’s software integrates with all functions of existing software — it gathers all of the relevant information that is stored in each client’s timekeeping system, encrypts it for security and submits the data to Payroll City for processing.

A three-hour job for one company turned into a 15-minute job, Fox said.

“Payroll is the hub and needs to speak to all the other departments without duplication of effort,” Fox said.

Saving time was a big selling point for Alison West, general manager and managing partner of Salsa Brava restaurant in Briargate. She was taking payroll paperwork home at night just to get it done. Two years ago, Salsa Brava switched to Payroll City. Now, she spends about 20 minutes per pay period preparing payroll information, she said.

The restaurant uses a computer system where servers input hours and tips. The information syncs with Payroll City’s program and calculates taxes for the employer and the employees.

“We used to have to manually input that information — there was so much pencil work, making sure everything was accurate, then I had to call in to report it,” West said. “(Payroll City) cut down my work by three and half hours a pay period.”

Payroll City just hired its fifth employee — a sales and marketing representative in California who will work on gaining more California clients.

“The Point of Sale is a niche in the market –definitely our market,” Fox said.

Adam Fox said his computer program is going to put Payroll City in the big leagues. Payroll keeping is a $29 billion industry, with one large company, ADP, getting about 31 percent of the market. He’s been told he should sell his computer software to the larger companies. But, he has other plans. He’s working on the next bit of software that can be used from mobile devices.

“I see us becoming a real viable name in the market,” he said. nCSBJ