Case studies: Payroll
And, in some cases, even the bane of their
existence due to the potentially costly and
time-consuming nature of the work.
But lately, more firms are discovering that
the reality of using payroll software or out-sourced services can be a significant revenue
source or at least, a strategy to add to their
overall service offerings in an increasingly
competitive environment.
Here, several firms discuss their recent selections of either payroll software or services
and the results they’ve seen thus far.
Krueger also noted that he was impressed
by the fact that ADP’s account representative
was physically in the office assisting his staff
as their tech support was on the phone, working through any questions they had.
Results: The firm mostly sees payroll as
a value-add client retention offering and
complement to its other services as well as
a future revenue item.
“If I am working on a new client and not
charging as much for payroll services, I am
going to make a proposal that includes other
areas of outsourcing services and fold payroll
in so I price payroll in the context of a bigger
deal,” said Krueger. “If we have a payroll-only
prospect with no ability to grow into what we
consider a ‘B-level,’ client I will price [the ser-vice] higher and they may go away but that’s
OK.”
Next steps: The firm would like to evolve
its payroll practice into full HR services and
is currently working directly with ADP to help
do so.
Firms are rediscovering an old standby niche
By Seth FineBerg
Offering payroll services to clients has long been seen as either
a reluctant necessity or an essential service for CPA firms.
Cost-effective services
Firm: The Latte Group/Glen Ellyn, Ill.
Size: 10 staff
Product: ADP
Commencement date: Early Q4 2010
On record: Mike Krueger, president
and CEO
Challenge/objective: The group, which
has an accounting/business process outsourcing practice, wanted to add HR services
to its offerings and decided to start with payroll, but needed it to be cost-effective.
Amount spent: $60 per client fixed, plus
$1.25 per transaction (i.e., direct deposit,
check).
Process: The firm didn’t want to conduct
full payroll services and sought out an out-sourced solution. It knew ADP had the name
recognition it thought its clients would trust.
Krueger had been in contact with ADP in the
past, but it was, in his view, “too cost restrictive” to take on until fairly recently. He claims
ADP approached his firm a little over a year
ago with a new, “more reasonably priced”
offering for accountants. The firm took a few
months to evaluate ADP and decided it was
time to move forward with them.
“The real tipping point for us was that
many of our clients using us for payroll were
growing and had multi-state operations and
ADP can handle that, we also found ADP’s
tax administration component was far supe-
rior than other providers’ ,” said Krueger. “The
fact that we had been offering some payroll
before meant the primary focus of the transi-
tion was to get our people familiar with ADP’s
workflow and user interface. They provided
training, we tweaked the onboarding process
and within one pay period it was as if we’d
always worked with them.”
ing five payrolls in the first quarter of 2010,
five more in the second quarter and more
throughout the year.
A well-rounded solution
Firm: Livesay Group/Lexington, Ky.
Size: 9 staff (full and part time)
Product: Payroll Relief
(AccountantsWorld)
Commencement date: January 2010
On record: Bobby Livesay, partner
Challenge/objective: The firm needed a
more “well-rounded” payroll solution that it
had used in the past, particularly one that was
easy to manage, had a dashboard to help with
workflow, as well as one that could ultimately
help grow the firm’s limited payroll practice.
Amount spent: Began at $1,000 for unlimited payrolls during the first a year, now
$6,000 for the year (based on 7,500 paychecks
processed). Charges decrease as paychecks
processed increase.
Process: The firm had read about Accountants World and became familiar with
their offerings. The price was right and they
were able to start using the product relatively
quickly Payroll Relief is a cloud-based offering with no installation.
Livesay started slow, setting up a “dummy
company” at first to get accustomed to the
program. Within two weeks, the firm’s payroll
administrator took a few small clients and
entered them into the system, first process-
A smaller vendor
alternative
Firm: Sum of All Numbers/Fremont,
Calif.
Size: 12 staff
Product: Intuit Online Payroll (Intuit)
Commencement date: 2009
On record: Holly DeVito, CEO, founder
Challenge/Objective: The firm conducts
other business process outsourcing services,
from basic bookkeeping to CFO-level duties.
Clients were asking for payroll and the firm
needed an alternative to “the big vendors.”
Amount spent: Approximately $400
month based on payrolls processed and client size.
Process: Prior to selecting a payroll vendor, the firm acquired a bookkeeper who
once used PayCycle (now Intuit Online Payroll). She recommended the solution and the
firm was trained “very quickly” on its use and
began marketing payroll service, offering clients the first three months free. Within “a few
days,” the firm began entering small clients
into the system.
“The system was so easy to use, our payroll
person had done some payroll by hand in the
past, so this was a breeze,” said DeVito. “
[In-tuit has] online training, an online resource
center with answers to most questions as you
set up a client. The help is incredible, you usu-
Time savings
Firm: Trudy Durant and Associates/
Edison, N. J.
Size: 17
Product: Paychex
Commencement date: 2009
On record: Trudy Durant, partner
Challenge/objective: The firm wanted to
offer clients payroll services, but found it “too
time- consuming” to do in-house.
Amount spent: $60 per employee payroll
processed.
Process: For the firm, Paychex had a
“trusted name” in payroll outsourcing and
when they approached the company, they
had a CPA-firm offering that “made sense”
to use, according to Durant. She claims that
getting the firm and its clients set up on the
service did not prove too difficult.
“It was easy for Paychex to work with us
to figure it all out. When we first set up the
account we talked to a representative. The
paperwork is completed by the client and
once an account is set up, our bookkeepers
go online and process,” said Durant. “Then
an email comes back indicating it’s done and
money comes out of the client’s account to
pay their employees. Very simple.”
Durant claims that when they first informed
clients they were moving to Paychex there
was some hesitancy about “the outsourcing
aspect” of the service, but she explained that
they would not charge them.
Results: Durant said the payroll service
has reduced her staff time as well as the work
that used to be done to process payroll.
Next steps: Durant says she plans on looking into offering workers’ compensation as
well as 401(k) services. AT
