QuickBooks users contemplating the upgrade to QuickBooks 2000, take heed if you rely on QuickBooks for payroll processing. Major changes lay beneath the surface that aren't readily disclosed by Intuit unless you pour thoroughly through the installation guide or you actually install the upgrade and convert your data files.

Surprise! You may find your entire business modus operandi has changed drastically. The on-screen instructions read "Before you can pay employees, you need to choose a payroll option." Basic or Deluxe are the payroll options that have replaced the annual Tax Table Update Service and before you can process your first payroll, you must choose from one of these paid subscriptions, billed monthly to your credit card. Furthermore, you must have an established Internet connecton to monitor your account and to receive the updates.

Earlier QuickBooks versions utilized the annual Tax Table Update service that cost $69.95 per year. Customers received the update disk at year-end by mail or by download from the Internet. That option is no longer available with QuickBooks 2000. Instead you may opt for Basic Payroll which costs $6 monthly per employer identification number. This is the do-it-yourself option that includes the latest federal and state tax tables and payroll forms. If you want a comprehensive payroll service that includes automatic tax depositing and report filing, choose Deluxe Payroll for $25 monthly plus a per employee fee. If either of these options are unpalatable, you can calculate the payroll deductions yourself using the state and federal booklets. How convenient is that for a company that processes weekly payroll for fifty hourly wage employees?

Intuit explains the payroll changes as follows: "To help our customers stay in compliance with federal and state payroll tax regulations, QuickBooks now mandates that payroll users subscribe to one of our payroll services if they want QuickBooks to automatically calculate payroll taxes. Payroll taxes can change at any time and with 30% of small businesses penalized each year for inaccurate payroll filings, it would be inappropriate for QuickBooks to enable our customers to make payroll errors".

Foul, I cry. Historically, the federal and state tax tables do not change dramatically during the calendar year. This is all about money and insuring that Intuit gets the tax table revenue from each and every employer because in the past users have paid for one update disk and freely shared the updates with others. Now that Intuit has cornered the lion's share of small business users, they're holding the tax tables hostage in retaliation.

Additionally, Intuit is now dictating how people should conduct their business. Many employers choose not to have Internet connectivity in the workplace and specifically not on systems with primary accounting functions due to security concerns. While $6 a month isn't prohibitive, an additional $20 monthly may be required for Internet service, not to mention hardware upgrades that naturally follow.

Intuit has added some snappy, new features to QB 2000 that may interest some users. You can now build your own web page from Quickbooks, print postage stamps or integrate with Microsoft Outlook. I doubt, however, that any of these features will make the payroll constraints any more palatable for the hard-core business user.

I've been a die-hard QuickBooks supporter since DOS version 1.0 and don't deny Intuit's right to profit from the tax tables, but they need an alternative that isn't so cumbersome on employers. What if the credit card expires? What if the Internet connection is lost? Employers potentially face more expensive wage and hour penalties by not delivering the payroll on time. Raise the price of the software upfront, or devise a way to embed tax payer ID numbers into the annual updates.

QuickBooks 2000 will work great for some companies, but I believe many more will be inconvenienced. For now, hang on dearly to your QuickBooks 6.0 or QuickBooks Pro 99 programs. The annual Tax Table Update service will still be available for these products.