Additional comments from this roundtable discussion can be found in your September 2007 issue of Journal of Accountancy.

To help CPAs deconstruct the benefits of managing payroll and human resource administration functions for their clients, we invited top thought influencers and solutions providers from the marketplace to share their insights on the opportunities, considerations and caveats facing CPAs who are considering this fast-growing practice-building niche. In last week’s column, our expert panelists revealed what Payroll & HR solutions help CPAs make more money and solidify client relationships. They also disclosed which solutions CPAs and CPA firms have used to make more money and solidify client relationships.

Joining us (listed alphabetically) are: Michael Alter, president of SurePayroll, Inc.; Jon Baron, president of Professional Software & Services, Thomson Tax & Accounting; Dr. Chandra Bhansali, president & co-founder of AccountantsWorld, LLC; Jim Heeger, CEO of PayCycle, Inc.; Don McLoughlin, vice president of Marketing, ADP Small Business Services; Vincent Mottola, senior vice president, Ceridian Small Business; and Walter Turek, senior vice president — sales & marketing, Paychex, Inc.

Gentlemen, are you finding that CPAs (and their small/midsize clients) are switching payroll/HR solutions more frequently than they used to? Less frequently? How come?

JIM HEEGER (PayCycle): More and more CPAs are embracing payroll. We have seen this in the growth of our own PayCycle Accounting Professional Program, which has doubled every year for the past few years. PayCycle’s online payroll makes it easier for CPAs to realize a profit from payroll with conveniences such as federal and state electronic services, direct deposit, and dual CPA/client access over the Internet.

VINCENT MOTTOLA (Ceridian): We haven’t really experienced any increase. Once firms and small businesses find a solution that works for them and provides value, they are less likely to go through the hassles of changing. We’ve found that since our clients and accountants work with the same service and sales representatives on a regular basis, they develop a relationship that’s comfortable and familiar.

Among your customers with more than 10 full-time employees, who tends to be ultimately responsible for making decisions about the company’s payroll management? Do you expect that responsibility to change over the next three to five years? If so, why?

DON MCLOUGHLIN (ADP): For most of our small business clients, the ultimate decision-maker is the business owner. This is as true for a one-person organization as it is for a 49-employee operation. For many entrepreneurs, starting your own business means having control over every aspect of the business, including how payroll is managed. We do not foresee this changing over the next three to five years.

Mottola: Above 10 employees we may not be regularly working with the business owner as we do with smaller companies, but we still find that our regular contact wears many hats and consults closely with the business owner on payroll and human resources issues. We may see small businesses hire more specialized HR/PR professionals in the future for a couple of reasons. Federal and state employment regulations continue to increase in both number and complexity, and I have no reason to think there will be a reversal in that trend. Small businesses will also be faced with a shrinking pool of skilled talent as the “baby boom” generation retires. Globalization will require higher productivity. Small businesses will be challenged with finding and retaining high-quality employees. Even with an increase in the number of HR professionals in small business, many of the management tasks will continue to be outsourced, especially as regards the integration of payroll and benefits.

Our reader surveys keep pointing to five key priorities for CPAs when it comes to payroll/HR solutions (see below). Do you anticipate any new contenders for the Top 5 list in the years ahead? Or how would you rank the top-5 list of payroll/HR priorities in 2010?

MICHAEL ALTER (SurePayroll): 1. Flexibility/Ease of Use

2. Keeping abreast of tax rates and payroll regs

3. Customer Service/Tech Support/Response Time

4. Operating Cost

5. Integration with other applications, processes and systems

JON BARON (Thomson Tax & Accounting): 1. Flexibility/Ease of Use

2. Keeping abreast of tax rates and payroll regs

3. Customer Service/Tech Support/Response Time

4. Operating Cost

5. Integration with other applications, processes and systems

Many clients relish the convenience of 24/7 access to their tax and accounting information and tools via Web-based private portals. Increasingly, this will become the preferred method of doing business for many. By 2010, I would expect the option for Web-based services will make the Top 5.

CHANDRA BHANSALI (AccountantsWorld): 1. Flexibility/Ease of Use

2. Keeping abreast of tax rates and payroll regs

3. Customer Service/Tech Support/Response Time

4. Operating Cost

5. Integration with other applications, processes and systems

We believe one of the top-five considerations should be how well the payroll system lets CPAs and their clients collaborate. By delegating to clients the functions they can most easily perform, such as entering payroll data and printing checks, CPAs can greatly enhance their productivity and make payroll processing more profitable.

Heeger: 1. Flexibility/Ease of Use

2. Keeping abreast of tax rates and payroll regs

3. Customer Service/Tech Support/Response Time

4. Operating Cost

5. Integration with other applications, processes and systems

The five key priorities listed above are the entry-level requirements. New contenders will be electronic services including direct deposit, and electronic payments and filings for both federal and state. These services save time and add value.

McLoughlin: 1. Flexibility/Ease of Use

2. Keeping abreast of tax rates and payroll regs

3. Customer Service/Tech Support/Response Time

4. Operating Cost

5. Integration with other applications, processes and systems

Mottola: 1. Flexibility/Ease of Use

2. Keeping abreast of tax rates and payroll regs

3. Customer Service/Tech Support/Response Time

4. Operating Cost

5. Integration with other applications, processes and systems

I think that improvements in technology will address the flexibility/ease of use and integration issues regarding payroll solutions. We’ve already seen great strides in that area over the past few years, and it will continue. As pressures increase in the recruiting/retaining of employees, and employees demand greater compensation and benefits, productivity increases will be needed to control operating costs. The HR part of HR/payroll will become a priority — a way to measure the ROI of the investment in people.

WALTER TUREK (Paychex):

1. Flexibility/Ease of Use

2. Keeping abreast of tax rates and payroll regs

3. Customer Service/Tech Support/Response Time

4. Operating Cost

5. Integration with other applications, processes and systems

How does your company’s approach to customer service (and CPA education) help you stand out from the rest of the pack?

Alter: SurePayroll is passionate about small businesses and their payroll. Our mission is to provide the simplest, friendliest payroll process on earth — at a price small business owners can afford.

We have found that we’re able to live this mission when we provide options that allow customers to “do-it-their-way,” and monitor ourselves every day.

Our approach to customer service is multi-faceted and designed to let our customers determine what works best for them. For customers who want to speak to a live person we have a U.S.-based customer care call center which is open M-F from 7:00 am CST to 8:00 pm CST. For common issues, we have online help which enables customers to get information through our site without having to call in. We also offer e-mail help for less urgent issues.

Customers can enroll their way. They can do it themselves, online. They can choose to have us assist them through the process. Or, we will complete the process for them, leaving them only with the task of approving information and signing the power of attorney form.

We continually monitor our service levels using the Net Promoter Score (NPS) — an indicator of customer satisfaction based on a customer’s willingness to refer business. Most large, national companies score in the 10 to 15 range. A world-class rating is considered to be a net promoter score of 50 or more. SurePayroll continually scores above 50. I believe that really sets us apart.

Baron: Because we offer a complete suite of integrated software for virtually all the services that CPA firms provide their clients, we have a deep understanding of their needs. Not just the ability to provide the payroll service, but their needs in providing accounting, auditing and tax preparation services as well. This helps provide perspective to our technical support staff.

Bhansali: We do not sell our solutions directly to end-users. Our sole commitment is to CPAs and accountants. Payroll Relief is created exclusively to help accountants offer profitable payroll services to their clients. To that end, we proactively consult CPAs on how they can set up and grow their payroll practices, and we offer resources to help them market their services. CPAs and accountants greatly appreciate the fact that we will not compete with them, and they value our trusted partnership with them.

Heeger: You do not have to be a payroll expert to use PayCycle with our “do-it-with-you” approach. If a customer needs a payroll expert, he can just call us toll-free to speak to one. Our customer service agents know payroll, our product, and each state’s payroll requirements.

McLoughlin: ADP is dedicated to exceeding clients’ service and product expectations. We understand what it takes to satisfy our clients and strive to exceed their needs one at time. We guarantee our clients’ payrolls will be accurate and on time, or it is on us. We haven’t seen any other service provider stand by a similar guarantee.

We support the community through resources available on our Website and in our monthly newsletters like the Tax Researcher, where we identify changes in tax law that would affect CPAs. Also, we offer an annual US Master Tax Guide free of charge to CPAs.

Mottola: Many providers can produce paychecks, create management reports and file tax returns. The difference at Ceridian is the level of service we provide and how we do it. Each client is assigned to a service representative who regularly manages their account, allowing them to become familiar with all aspects of the client’s payroll and HR needs, and their preferences. For accountants, we provide secure online access to client data when they need it, and a special “hotline” for direct access to a senior support analyst. We also pride ourselves on the tenure of our customer service, sales and technical support people, and instill accountability to client satisfaction in every aspect of our organization, not just our customer-facing personnel. We are very proud of the fact that over many years, 90 percent or more of our Small Business clients have been willing to recommend Ceridian.

Turek: Unlike Web-based or small providers who may not be able to develop onsite, personal relationships, Paychex has the manpower to ensure that CPAs and their clients will deal with one local representative. This single point of contact has the opportunity to really get to know the CPA, their firm, and understand the needs of the CPA’s client base. Additionally, we ensure that each client is assigned to one dedicated, personal payroll specialist, and is not bounced around an 800-number or “team” of service personnel. We strive — and succeed — in building true personal relationships.

Next week we’ll take a closer look at what the most challenging thing is about educating CPAs about HR/payroll products and services; how payroll/HR solutions help CPAs keep pace with nontraditional payroll deductions, such as contributions to charities, 529 plans, insurance plans, flex spending plans and retirement plans; and looking ahead three to five years, which type of accounting firm (by size or specialization) will be earning a significant portion of its revenue from payroll and/or benefits services to clients.

Payroll. It’s the lifeblood of your clients’ businesses. Can you afford to let them operate without the best possible solution?

Hank Berkowitz is the Publisher of AICPA’s Insider™ electronic newsletter group.

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