CPA Practice Advisor

SEP 2014

Today's Technology for Tomorrow's Firm.

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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.

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