CPA Practice Advisor

OCT 2011

Today's Technology for Tomorrow's Firm.

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GREAT PRACTICES MANNING & COMPANY, PC & PAYROLL VAULT Tapping into the Payroll Revenue Stream Abandoning old biases, Manning transformed payroll from a hassle into a 'hellavalota' opportunity and future profi t F 6 or years, Sean Manning, CPA and president of Manning & Company, PC, held fast to the notion that payroll was more of a pain than a profi t-surging service. And he wasn't alone — most practitioners felt the same way … and still do. "Payroll has the reputation of being a problem rather than a solution," Manning stated. "But the fact is that payroll itself is not the problem; it's how fi rms choose to handle it." The traditional payroll services model houses payroll with other services — accounting, tax, audit, bookkeeping, and so on. Manning affirmed that for payroll to be a moneymaker, it must be segregated. "Firms that follow the traditional model typically support fewer than 100 payroll clients … usually between 25 to 50 because that's all the fi rm can handle," Manning asserted. "Payroll requires its own system and a dedicated staff ." Manning bought his father's fi rm in 1998, but it wasn't until a decade later that he launched his lucrative payroll business, which he uniquely branded Payroll Vault. "I am fi rmly in the payroll business now," Manning said. "Aſt er launching Payroll Vault in 2008, we more than doubled in size by 2010." Traditional vs. New Payroll Services Model Manning's service model carves payroll out from his firm's broad operations. "Having payroll as part of my core accounting system doesn't work. Payroll requires a dedicated staff , not just a bookkeeper to handle payroll tasks as they come through the door … in between bookkeeping duties," Manning stated. "T at's when payroll processing really does become a hassle." In order to grow his payroll business beyond the profession's average of 25 to 50 accounts, Manning knew that he needed to establish a dedicated payroll depart- ment. So that's what he did. Ma nnin g 's "new" model seg- regated payroll from other services, complete with its own workfl ow system, technologies and staff . "I knew I had to make a substantial investment up front to launch Payroll Vault," Manning recalled. "But I also knew that with a dedicated payroll business I could capture hundreds of accounts and process them with far more ease and effi ciency." At the core of Manning's model is growth. With an established system and dedicated staff in place, there is no payroll ceiling. His payroll business is well positioned for steady uncapped growth. Manning recognized early on that STATS AT A GLANCE Firm website: www.manningco.com; www.payrollvault.com Year founded: 1977; purchased from father in 1998; launched Payroll Vault 2008 Total employees: 11 F/T Home base: Littleton, Colorado Firm description: Full-service public accounting fi rm with segregated payroll practice — Payroll Vault Payroll app of choice: Thomson Reuters Service Bureau Payroll October 2011 October 2011 • www.CPAPracticeAdvisor.com CPAPracticeAd isor com to grow his payroll business, he would need to implement it in stages. He launched Payroll Vault with a payroll specialist, an operations manager, and a defi ned workfl ow process in place. From there, he would build onto the business as needed to keep up with growth. "I took a staged approach with my payroll business. Once all the initial pieces were in place — technology, process and staff — I set a goal for increasing business the next year, and then the next. As needed, I invested in new staff and/or technology. At R. Sean Manning, CPA, President each stage of growth, there was an upfront investment, but ultimately, new business more than made up for it," Manning explained. Manning's big vision is to grow his practice to 500 payrolls over the next few years, and more thereaſt er. And with a structured plan in place, he's in a good position to make that happen. Marketing & Sales: Key Components for Success Like any fi rm, Manning has experienced client at rition. "T e average loss in the profession is about 10% a year — the combination of a bad economy forcing businesses to close, disgruntled clients that go elsewhere, or clients that decide to

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