6 September 2014 • www.CPAPracticeAdvisor.com
FROM THE TRENCHES
By Randy Johnston
How Payroll and HR Can Be
Proftable for Accounting Firms
By the time salaried workers are
identifed, hours worked and PTO
are gathered, and data entry has been
completed, much of the task is done.
Yet many of us give up the proftability
and control because of the perceived
consequences of a four-leter word:
risk.
Consider that clients that are using
three or more services from you are
less likely to consider changing profes-
sionals. If your frm only does compli-
ance work, then at best you typically
only ofer two services. You may have
a consu lt i ng g roup t hat work s on
mergers and acquisitions or a litigation
support group that assists on court
actions, but once the ta x and audit
work is done, so are you.
I've spent many hours and much
writing on the benefts of a collab-
orative accounting practice. If you
are doing collaborative accounting,
pay rol l a nd H R ca n ex tend t hese
services for more proftability. Payroll
and HR can also give you a year-round
proft stream that provides marketing
opportunity as your frm is in contact
with clients on a recurring, regular
basis.
Con sider how you' d l i ke you r
pay roll and HR ser v ice ofering to
work:
• Completely outsourced to a provider
• Partially outsourced to a provider
• Completely in-house
Your f irm can ma x imize prof it-
abilit y and minimize frm stress if
you:
• Charge for services before they are
provided
• Handle all transactions electronically
• Provide a way for clients to do data
entry
• Require payroll data 48 hours before
processing
• Set up all employees for electronic
payments
• Ofer an employee self-service portal
• Pricing competitively to win the
service, but not necessarily the lowest
• Set up consistent procedures
• Cross train team members to provide
the service
• Have an annual review of your ofering
with the client
Consider the Solutions
T here a re ma ny solut ions on t he
market that provide good features.
W hile we can't list them all, here are
some good examples.
Completely outsourced – Tese
prov iders tend to ca r r y a l l of t he
work load and risk of payroll. Tere
typically is substantial sophistication
in the application to handle many
diferent situations. Examples include:
• ADP - www.adp.com/solutions.aspx
• HKP - www.hkpayroll.com
• Intuit - www.payroll.intuit.com
• myPay - www.cs.thomsonreuters.
com/mypaysolutions
• Paychex - www.paychex.com
Partially outsourced – T hese
providers give you tools that allow
you to process payroll efciently, ofen
t h rou g h a brow s er, a nd prov ide
supplemental services as needed.
• ADP - www.adp.com/solutions/
small-business.aspx
• Intuit - www.payroll.intuit.com/
payroll-services/enhanced-payroll
• Paychex - www.paychex.com
• Payroll Relief -
www.accountantsworld.com/solu-
tions/payroll-relief/in-house
In-house – Tese provider's tools
are installed in-house, and updated
frequently. Tese are more traditional
payroll processing systems updated
for today's needs.
• Adaptasof - www.adaptasof.com
• CYMA Payroll and HR - www.cyma.
com/cyma-accounting-modules/
payroll
• Intuit - http://accountants.intuit.
com/payroll-payments
• Optimum Solutions - www.optimum-
solutions.com
• Paycom – www.paycom.com
• Paycor – www.paycor.com
• Payroll CS - htp://cs.thomsonreuters.
com/payrollcentral
• Sage HRMS - www.na.sage.com/us/
sage-hrms
Each payroll ofering has unique
features or capabilities. You need to
consider what is most important to
you. Examples include:
1) Price per employee/check
2) I n t e g r a t i o n t o a c c o u n t i n g
sofware
3) Availabilit y of HR module or
capability
4) Auto deposit
5) Speed of entry
6) Portal, etc.
M a ke you r ow n l i st of w hat i s
important to your frm. Do not assume
that a product will necessarily calcu-
late ever y t h i ng cor rec t ly for t he
jurisdiction, locality or industr y of
your clients. Ask!
What To Do
Conceive your business ofering frst,
and then look for a tool that helps with
that ofering. You will fnd ideas and
resources from the vendors. Look for
groups that have successfully built
payroll practices such as Payroll Vault
or HK Payroll. Ask what makes these
practices proftable and valuable.
To be successful with payroll, you
need to have enough clients to make
it worthwhile. For most f irms, ten
clients are the minimum number to
play, but 30 to 50 or more make this
section of the practice more proftable,
repeatable, and less disruptive. Fur-
ther, if you are preparing your practice
for sa le, an active pay rol l and H R
practice makes the frm more valuable
than having compliance services alone.
Is payroll and HR something that can
m a ke you more prof it able w h i le
providing beter client service?
Yes! Yes, it is!
Randy Johnston is executive vice
president and partner of K2 Enterprises
and Network Management Group, Inc.
He is a nationally recognized educator,
consultant and writer with over
30 years' experience. He can be
contacted at
randy.johnston@cpapracticeadvisor.com .
P
ayroll is not a four-leter word.
Human Resources (HR) is an
additional opportunity to help
clients and tie them closer to your
firm and services. While many
CPA frms use outsourced services for payroll
and HR, technology has made providing these
services easier and more proftable.