Wednesday, June 24, 2009

Payroll Scammers Are 'Rare Gems'

Link to the article that inspired this post: "Payroll Company President Charged with Grand Larceny" By: Seth Voorhees of

So... here we have another case where through the power of 'Instant Media' every search string on the web that includes the word 'Payroll' will point toward this jerk running off with his clients' tax money.
Now, there are gems like this guy in every industry. We have all seen one bad apple trashing various industries' reputations over the years from Enron and WorldCom to the banks that sold us on the value of 'Interest Only, Variable Rate, No-Docs' loans over the past few years (that one worked real good!).

All we need to do is visit the Feds' Financial Crimes web site to get a full taste of what kind of recent finance related scams are out there.

The real question is: Should you worry about your clients' perception of you and your payroll business?

The answer is dubious... it's a YES/NO scenario. Whenever one of these incidents occurs it opens up the opportunity for a slick sales rep from one of the big payroll providers to sweet talk your client. They might say things like, "Can you really trust a small business with your tax money?", "We have a Kabillion dollars backing our tax accounts... do they?"...

I would venture to say that you are only at risk for these kinds of attacks if you have failed to inoculate your clients. Here are a few things that, if you haven't done, you should:
  • Be in regular communication with your clients. If you ignore those, 'good' clients who don't call - you won't know if they are at risk
  • Even though you'd like all of your clients to utilize your tax service - don't push them into a corner
  • If you start getting questions when something like this happens, be prepared. Write up and practice a 5 minute talk on the subject that you can use on those calls. Put some bullets down. The last thing you want is to sound nervous and confused when hit with a question like this.
  • Finally... Be transparent - you have nothing to hide
So, above are some strategies to try if you are worried - or happen to be located in or around Rochester, NY (which would make this extraordinarily relevant to your business' future.

Regardless of the new focus on this fraudulent fellow, now is the time to pump up your relationship with your clients!

If you don't feel like you've touched base with your clients enough, and built that solid relationship - now is a great opportunity to do so. This isn't just in case they google payroll and find that fink's mug shot. This is about making your business stronger. Think about the
  • Are ALL of your clients aware of your current offerings? Have you added ancillary services and forgot to tell them?
  • Have you reached out to your clients who may be in financial trouble? Now is the time to keep them from going in-house.
Right now the economy is pushing the already fickle consumer into a bargain hunting frenzy. Payroll Service Bureaus lose clients when the client does not know that their current provider has that one service they were lacking. Don't be that bureau.

Bottom Line? You run a good, honest business. Make sure your clients know it.

Tuesday, June 23, 2009

Green Is Going vs. Going Green?

I was just skimming through the latest copy of the Harvard Business Review in between phone calls and got stuck on an article entitled, "Understanding the Post Recession Consumer."

One of the eight trends that they indentified regarding consumer behavior in the current mudpuddle we are swimming in is this:

Green was cool, but I ain't paying a premium for it anymore.

Ok, so I paraphrased a bit, but that is the gist of it. Now, when we take this concept and apply it to selling your payroll services...

Oh My Gosh!!! I Spent All This Money On An Online Solution To Push As Green!!!

Stop tearing your hair out and gnashing your teeth... it'll be ok! I swear! So, you've got an online paperless solution in place. Now the consumer doesn't care as much. What do I do?

The concept that I work on with my clients to sell the online payroll tool to their clients centers more around the value you can provide to the client rather than the green-ness of the option. I suggest the following:
  • Push savings, not Green
  • Green becomes the feel-good after-effect of choosing an economical solution for payroll
Set up a pricing model that puts your online product at the low end of the $pectrum. You will have an easier time getting buy-in from your existing and new clients by saving them money. This in turn reduces the hours you and your staff spend on payroll, and allows growth without increased headcount.

Right now, everyone wants a deal. Sure they'd like to do something environmentally friendly - but, keep in mind that the green those clients are worrying about the most about right now is the kind that comes with dead presidents on it.

Tuesday, June 9, 2009

So, you've got payroll experience...

You have some payroll experience? How much? Lots? EXCELLENT!

You got laid off? An all too familiar story... can't find work? Even more familiar. Just last night I was watching our local news as they interviewed High School kids looking for summer work.

There isn't any.

Why aren't there any summer jobs to speak of? Because grown-ups are filling the slots, and if there are enough desperate a-dults out there who need work, who in there right mind wants to hire a pimply kid who's working for gas money?

So, the question is... what are you going to do with that payroll experience? If you have an entrepreneurial bone in your body, I would strongly suggest starting your own payroll business. Why not? It couldn't hurt to try.

I'm not talking about buying a big software package and opening a store front. I'm talking about your classic Mom/Pop shop. A kitchen table operation, no more, no less.

There are a number of options out there that will allow you to private label your services via the web, and this is the perfect method to use to see if you have what it takes to build up a client base.

Here is how you might get rolling:

  • Find a payroll solution - / QuickBooks / Accountant's World / Etc.
  • Buy a copy of The Payroll Source
  • Find a friend or family member to Guinna pig the business on (do a side-by-side payroll first to make sure you've nailed it)
  • ...and you're in business - go get that 2nd client!

Seriously, in our current economic slump the payroll business is prospering. People are leaving the large bureaus such as ADP and Paychex looking for a better deal, and to support local services. My clients are in the black - up 5 - 15% over last year which is fabulous in today's marketplace.

I say, dig in and get your piece of the action while the getting is good.

Friday, June 5, 2009

Intuit, Inc. Acquires

Well... this is an interesting development.

I have to admit, that as one of the folks who was laid off when Intuit closed up Complete Payroll Services awhile back - that I felt a bit irked at first. Selling off all of those ~30k hard earned clients to ADP might have made a small black mark on my heart that is still healing... then they step up and buy yet another payroll company?


Upon further reflection, I think they might just pull it off this time - and good for them.

Both CRI and CBS Payroll, as acquisitions, brought in outsourced payroll clients and back-end systems to support them. This class of client was a fair mix of call/fax along with online clients. As they later unloaded the clients to ADP, Intuit appears to have re-focused on the smaller web based clients which are still being offered service up there on This acquisition is adding to that online payroll model 60k+ clients. Not bad, not bad at all.

Perhaps the mold that PayCycle has built for online payroll clients will mesh nicely with where Intuit has taken their outsourced payroll offering since '07 - to the web.

I wish the PayCycle folks all the best. Acquisition is a wild ride!

by: Logan Cashwell

Thursday, June 4, 2009

Co-Op Payroll? Huh?

Recently I was playing around on Twitter and posed the following question: "Why don't Accounting firms in regions with a population around 50,000 people who aren't really into payroll as a profit center get together and make something happen?"

Well it was shorter than that on Twitter (140 character limit and all that), but you get the idea. Even if you have no interest in working Payroll into your practice as a profit center, what is there stopping you from getting together with your peers in the neighborhood and doing battle together with ADP & Paychex?

Hey, if the farmers can do it, why can't an Accounting Professional?

It seems foreign, but most CPA firms who get serious about payroll form a separate company to manage it, and do very well. And this is going solo. A typical client's payroll and the ancillary services that surround it can generate between $1000 and $3000/year. Nothing to shake a stick at.

I would find it very interesting to see a group of smaller firms band together, brothers and sisters in arms - form a partnership, find a high-end payroll manager and take their revenue back from ADP, Paychex, and their cronies.