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.


  1. I wonder if there is a fear if an accounting firm sets up a payroll company, they expose all their clients to another CPA firm. That is what I am struggling with. I was a cpa firm first; my feeling is if I market to other local firms they may be afraid of me stealing their clients. But of course, I haven't asked them. Maybe I should get some feedback.

  2. I have to agree that CPA firms should connect with a payroll firm and join forces. Why let your clients get the opportunity of you being the one getting your clients stole.
    One stop shop, isn't that what the world is looking for these days.

  3. Thank you both for the comments! I absolutely agree with Dawn - that if a CPA firm has no intention of doing payroll internally, it is a far better option to outsource to a local friend than to a national such as ADP, Paychex, or Ceridian.

    It is a simple process to put together a non-competitive relationship with a fellow CPA, even if you, as a payroll service have your own practice. Why, you could even private label it for the firm you are doing the work for! Keep it in the family - and keep it local. In this economic climate, we need to take care of each other.