Paychex, Inc.
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Paychex, Inc.: SWOT Analysis & Company
Profile
Reference code: BRBC034CP10-Q4
Published: Sep 2010
Business Review
John Carpenter House
7 Carmelite Street
London EC4Y 0BS
United Kingdom
Tel: +44 (0) 20 7936 6400
Fax: +44 (0) 20 7336 6813
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Paychex, Inc. - SWOT Profile Page 1
Paychex, Inc.
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Paychex, Inc. - Company Overview
Paychex, Inc. (Paychex) is a US based company engaged in providing human resources and benefit outsourcing
solutions services in the US and Germany. The company’s offerings include payroll services, such as payroll tax
administration, payroll processing, and employee pay services, such as direct deposit, and check signing. In addition, it
provides human resource services such as health insurance, 401(k) plan recordkeeping, section 125 plans, time and
attendance solutions, workers’ compensation administration and other administrative services which are provided to
various small and medium size businesses. As of May 31, 2010, the company had about 100 offices in the US and four
offices in Germany. The company is headquartered in Rochester, New York, the US.
Financial Performance
The company reported revenue of USD 2,000.82 million for the fiscal year ended May 31, 2010 (fiscal 2010). The
company's revenue declined at a compounded rate of 1.6% during the period 2008-2010 with a year on year decline of
3.93% over fiscal year 2009. During the fiscal year 2010, its operating margin was 36.22% as against the operating
margin of 38.66% in fiscal year 2009. During the fiscal year 2010, the company registered a net profit margin of 23.84%
as against the net profit margin of 25.62% in the fiscal year 2009.
Paychex, Inc. - Key Facts
Paychex, Inc., Key Facts
911 Panorama Trail South,
Rochester, New York (NY), Ticker Symbol, Stock
Corporate Address: PAYX (NASDAQ)
Exchange
14625-2396, United States
Telephone + 1 585 3856666 No. of Employees 12,200
Fax + 1 585 3833428 Financial Year End May
URL www.paychex.com Revenue (in USD Million) 2,000.82
Business and Consumer
Industry
Services
Locations Germany, United States
Source: Annual Report, Company Website, Primary and Secondary Research
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Paychex, Inc. - SWOT Profile Page 2
Paychex, Inc.
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Paychex, Inc. - Business Description
Paychex, Inc. (Paychex) is a US-based payroll and integrated human resource services provider. AS of May 31, 2010, the
company provided services to about 536,000 clients. The company principally serves the small and medium size
businesses. As of May 2010, Paychex employed more than 12,200 people.
The company provides various services such as Payroll tax administration services, Employee payment services,
Regulatory compliance services, human resource outsourcing services, Retirement services administration, Workers’
compensation insurance services, Health and benefits services, Time and attendance solutions, and Other human
resource services and products.
Payroll tax administration services of the company include calculation, preparation, and delivery of employee payroll
checks; production of internal accounting records and management reports; the preparation of federal, state, and local
payroll tax returns; and collection and remittance of payroll obligations for small- to medium-sized businesses are the
offerings of the company’s payroll processing service line.
The Automated Payroll Tax Administration service line deals with the collection of payroll taxes electronically from clients’
bank accounts, typically on payday, thereafter prepares and files the applicable tax returns, and remits taxes to the
applicable tax or regulatory agencies on their due dates.
The company's Regulatory compliance services offer new-hire reporting services, with federal and state requirements to
report information on newly hired employees. The company handles all regulatory correspondence, amendments, penalty
and interest disputes, cash penalties imposed by tax or regulatory agencies for late filings and late or under payment of
taxes.
The company's Retirement services administration product line offers 401(k) plans, 401(k) SIMPLE, SIMPLE IRA, 401(k)
plans with safe harbor provisions, profit sharing, and money purchase plans to its clients. The company services included
plan implementation, employer reporting, participant and employer access online, ongoing compliance with government
regulations, employee and electronic funds transfer, and other administrative services.
The company’s Employee payment services provides the employers an option for paying their employees by direct
deposit, paychex access Visa Card, a check drawn on a Paychex account (Readychex), or a check drawn on the
employer’s account and electronically signed by Paychex. In addition, to fees received from clients, the company also
earns interest on client funds that are collected before pay dates and invested until remittance to clients’ employees.
The company provides workers’ compensation insurance services through its licensed insurance agency, Paychex
Insurance Agency, Inc., which acts as general agent to provide insurance through a variety of insurance carriers who are
underwriters. As of May 31, 2010, Paychex Insurance Agency, Inc. was appointed by about 92,000 clients for servicing
their business insurance needs.
The company's Health and benefits services include shopping for the best plans, tracking additions and terminations,
providing comparisons of national and regional insurers, informing and enrolling employees, calculating and initiating
payroll deductions, communicating with the insurance carriers, and assisting with renewal of policies.
Its other human resource services and products line cater to the need of small to medium-sized businesses by providing
retirement services administration, workers’ compensation insurance services, health and benefit services, time and
attendance solutions, employee benefits administration, and other human resource services and products.
The company’s Professional Employer Organization (PEO) assumes the risks and rewards of workers’ compensation
insurance. Thereafter, it offers more sophisticated health care services to its clients.
Recently, the company was ranked among the top 401(k) record keepers in the US, based on the surveys conducted by
Plansponsor, CFO, and Business Insurance magazines.
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Paychex, Inc. - SWOT Profile Page 3
Paychex, Inc.
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Paychex, Inc. - Major Products and Services
Paychex, Inc. (Paychex) provides payroll, human resources and benefit outsourcing solutions services. Key services
offered by the company include:
Paychex, Inc. Major Products and Services
Services:
Payroll
Tax services
Employee pay options
Workers' compensation solutions
Health insurance payment services
State unemployment insurance services
Time and labour solutions
Handbook services
Section 125 plans
Retirement services
Reporting services
Resource services
Seminar services
Source: Annual Report, Company Website, Primary and Secondary Research
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Paychex, Inc. - SWOT Profile Page 4
Paychex, Inc.
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Paychex, Inc. - History
Paychex, Inc., History
Year Event type Description