Academic journal article Journal of Accountancy

Online Payroll Delivers More of the Client Dollar; How 15 Minutes per Client Cements Relationships, Adds to Bottom Line

Academic journal article Journal of Accountancy

Online Payroll Delivers More of the Client Dollar; How 15 Minutes per Client Cements Relationships, Adds to Bottom Line

Article excerpt

NEEDHAM, MA. -- For CPA Marty Kofman, providing payroll services is as essential as taxes or accounting for his thriving full-service practice.

He couldn't imagine not doing it. And he couldn't imagine handling payroll without PayCycle's leading-edge technology. It's obvious that Kofman is a fanatic about customer service and a visionary for the CPA profession.

"My clients expect it," he says matter-of-factly. "If I care about what they want, I have to do it."

Client Payroll Pay-Off

Of course, it helps that the PayCycle payroll system is also quite profitable for Kofman. He pays PayCycle a wholesale price of about $10 per client, per month. He charges the typical client about $85 per month. That's $75 in gross margin. His only other cost is the time his administrative staffer spends running payroll--about 15 minutes per client per month.

"If you're doing payroll at all--and you should be," Kofman asserts, "then PayCycle is the only way to do it." Kofman's office includes another CPA and a Boston College intern, in addition to the administrative assistant. The firm, which Kofman launched 20 years ago after 10 years at Price Waterhouse, has about 400 loyal clients.

No More Software Headaches

Before starting to use PayCycle in 2004, Kofman, like many accountants, was doing mostly after-the-fact payroll. He was doing it by hand, with the help of two different software packages. At the time he was struggling with the frustrations of after-the-fact cleanup and manual deposits, with no real competitive advantages against nationally-known payroll agencies.

Now instead of juggling software applications and fixing problems, Kofman is using PayCycle as an end-to-end payroll solution. "PayCycle was built from the ground up as a complete payroll package, and it shows," he says. "There are no loose ends."

In addition, the PayCycle application updates automatically, unlike CD-ROM software with new discs every month. "Those updates can get confusing and cause errors," Kofman notes.

Perfect Opportunity for Junior Staff

There are strategic reasons why Kofman adopted PayCycle. …

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