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Copyright © 2016 ADP, LLC. Proprietary and Confidential. Copyright © 2016 ADP, LLC – This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal or other professional services.

Payroll as a Profit CenterDon’t’ Miss the Opportunity

October 20, 2016

Copyright © 2016 ADP, LLC. Proprietary and Confidential.

2Copyright © 2016 ADP, LLC – This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal or other professional services.

Today’s PresentersKyle Boettke

– Division Vice President, Channel Programs, ADP LLCAnthony Horton

– General Manager, Specialty Products, ADP LLCScott Gallagher

– Vice President, Client Base Acquisition, ADP LLCScott Hess

– Principal, CliftonLarsonAllen



Welcome!This information is the property of ADP, LLC (ADP). It may not be distributed, reproduced, modified, sold or used without the written permission of ADP.

The information is provided “as is” without any expressed or implied warranty, is based on generally accepted HR practices and is advisory in nature.

This content provides a high level overview and practical information concerning the subject matter covered and is provided with the understanding that neither the publisher nor the writers are rendering legal advice or other professional services.

Employers are encouraged to consult with their in-house legal counsel or with an experienced employment law attorney for legal advice regarding specific facts concerning the organization’s compliance with applicable legislation.



Logistics & Resources



Agenda

Part 1: Processing Payroll for your Clients & Case Study

Part 2: Client Base Acquisition Programs

Part 3: Revenue Rewards & Revenue Share Programs

Part 4: Q&A


Payroll as a Profit Center



Reasons to Leverage the Power of Payroll

Grow your Business

Increase Revenue

Influence your Future



Reasons Why Accountants Offer Payroll

49%accommodate

their best clients

34% deepen

existing client relationships

1/2more time with clients / deliver

additional value

Survey says….

Accounting Today Executive Research Council Survey – July & August 2016



Current View of Payroll Services

68.8%

67.6%

42.7%

7.8%23.2%

36.0%

96.0%

Q3: What services does yourfirm currently offer clients?

PayrollServices

AdvisoryServices

Audit

Insurance

13.5%

40.1%34.3%

9.5%

2.8%

Q4: What is your current growth strategy for your

payroll services? Rapidly accelerategrowthSlow growth

Maintain/no growth

Reduce

Eliminate

Accounting Today Executive Research Council Survey – July 2016



Generational View of Payroll



What the Experts Say



Different Ways to Make Profit with Payroll

Process Payroll for your clients

Client base acquisition programs

Refer and share revenue or

rewards


Processing Payroll for Clients


Industry dynamics.Demographics and the accounting industry are changing, are you?

57%of accountants in public accounting are over 55 and will be on the brink of retirement in the next 5-10 years.1

There may be a large number of accountants retiring in the near future, but most U.S. firms don’t have a succession plan in place – nor do they plan to develop one soon.

Nearly 18% of all U.S. accounting firms are in merger talks or expect to be within two years.2

Mergers have become more common in recent years due to changes in demographics and other succession planning issues

53%1 of firms who process payroll and

18%3 are likely to sell their payroll services separately from the rest of their business

Some firms realize that their businesses may be more marketable if they sell their payroll businesses separately


RUN Powered by ADP® Payroll for Partners

ADP has a custom Internet-based solution designed for accountants that offers: Dedicated team of payroll specialists to help ensure

accuracy every payroll

Federal, state and local payroll tax management

Go paperless with multiple payment options including direct deposit, checks or pay card

New Hire Reporting

Mobile Application for your clients to enter payroll hours any time any where!


Manage Your Client’s Payroll Efficiently And Accurately All In One Place Manage all of your clients on one dashboard Have access to your clients’ reports Preview payroll prior to real-time processing Grant three levels of user access to your clients to streamline your

payroll process ACA Dashboard allows you to track your number of full-time employees

to help you stay in compliance with Affordable Care Act requirements


Manage From One Dashboard

Update screens


Easy Access to Relevant Payroll Reports


Payroll Preview Real Time to Ensure Accuracy

Update screens


State of the Art Mobile Access to Clients’ Employees

Update screens


HR411 Provides Best Practices to Help Clients

Manage day-to-day HR responsibilities, including compliance with employment regulations

HR HelpDesk is staffed with certified HR professionals available by phone or email to provide best practice HR information

Employee Handbook Wizard based on federal and state employment law

HR Toolkits for step-by-step guidance for HR tasks

State and Federal Compliance Database, job description wizard, and more


Time & Attendance, Insurance and Benefit Add-ons

Electronic Time & Attendance solutions to help reduce labor costs and improve wage & hour compliance

Pay-by-Pay® Premium Payment Program for Workers’ Compensation

Health & Benefits through our licensed affiliate, Automatic Data Processing Insurance Agency, Inc.

Retirement Plan Solutions


Convenient Billing and Printing Options

Charge your clients based on simple upfront monthly charges View your clients’ charges on your consolidated monthly billing

statement Choose from multiple check printing and delivery options, or go

paperless with employee access and RUN mobile for increased convenience


Solutions for All of Your Clients’ Cash Flow & Control Needs


Marketing Assistance to Grow Your Business


Why RUN Powered by ADP® Payroll for Partners?

Less Work by being able to manage more payrolls in less time so you can get back to focusing on other valuable aspects of your business, especially at quarter and year end.

Less Worry with ADP’s secure technology, service, money movement and full-tax filing services to help manage every aspect of your client’s compliance challenges - from payroll and human resources to time and labor.

More Profit by offering additional services to your clients with no upfront investment for software or maintenance fees.*

Dedicated Service Team working side by side to implement and enhance your client experience.

WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING

Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor. | ©2016 CliftonLarsonAllen LLP

CliftonLarsonAllen LLPCLA Payroll

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About CLA

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Firm Overview

600+ principals

600+ principals

More than 100 locations

More than 100 locations

4,500 people4,500 people $750M$750M

32

18+ industries

100s of services

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CLA Payroll

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CLA Payroll Practice

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• 900+ clients on RUN• $3M+ in annual revenue• More than 20 dedicated payroll

processors• Niche is serving privately-held clients

in the under 50 employee space• 5+ year partnership with ADP• Focus on building careers to make a

bigger impact on our people, our clients, and the industries we serve


Whatever your needs, we’ll bring solutions to help with all of the things that matter to you

Why Payroll?

Seamless Service

Seamless Service

Compliance and

Regulatory Concerns

Compliance and

Regulatory Concerns

Protect Sensitive

Information

Protect Sensitive

InformationProcess

ImprovementProcess

Improvement

StrengthenInternal Controls

StrengthenInternal Controls

Lack of Internal

Resources

Lack of Internal

Resources

35


Critical Success Factors

Software PlatformSoftware Platform

Automation and Efficiency

Automation and Efficiency LeadershipLeadership SpecializationSpecialization

TrainingTraining Client ServiceClient Service Quality and Controls

Quality and Controls

Continuous ImprovementContinuous

Improvement

36

twitter.com/CLAconnectfacebook.com/cliftonlarsonallen

linkedin.com/company/cliftonlarsonallen

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CLAconnect.com

Scott Hess, CPA, MBAManaging Principal [email protected] West Research Drive, Suite 200Milwaukee, WI 53226262-898-6541


Client Base Acquisition



Why Consider a Client Base Acquisition Program

Merging practice with another firm without a payroll practice

Obtaining capital for investing in your practice or as part of your succession plans

Too many legislative changes impacting payroll increasing firm risk – ACA, FLSA overtime rules, paid sick leave, etc.



Client base acquisition program attributesConfidential and complimentary valuation of your client payroll business

Dedicated executive team to guide you and a comprehensive client transition plan

Conversion specialists to guide your clients through the process

Comprehensive payroll solution with add-on options and data access with your clients’ data post transition



The Process Value your clients’ payroll book Develop a transition plan Communication to your clients Client transition team assesses

clients needs & proposes solution Convert clients Funds transferred to you


Rewards & Revenue Share



Program Benefits You earn benefits for referring

your clients Clients have access to

comprehensive payroll, HR & benefit solutions to help them attract & retain top talent

You stay connected with electronic data access / general ledger interface to your clients’ payroll data



Rewards Programs Earn points for referred clients

that can be used for purchases for your practice or employees

Complimentary access to practice management resources and tools: CCH Resource Library – online access to

Master & State Tax Guides and tax news Healthcare Reform Library Reference materials from Wolters Kluwer,

the Tax Materials, Inc. and ADP Complimentary CPE courses



Shared Revenue Programs Revenue for each new client referred

who becomes a client of ADP’s payroll solutions

Ongoing residual payments on the service retention of your referred clients

System to track referrals and incoming payments and generate leads using social media



Can I Receive Revenue for Referred Clients?AICPA Code of Conduct - http://pub.aicpa.org/codeofconduct/Ethics.aspx#• 1.520 Commissions and Referral Fees• 1.520.001 Commissions and Referral Fees Rule.01 Prohibited commissions. A member in public practice shall not for a commission recommend or refer to a client any product or service, or for a commission recommend or refer any product or service to be supplied by a client, or receive a commission, when the member or member’s firm also performs for that clienta. an audit or review of a financial statement; orb. a compilation of a financial statement when the member expects, or reasonably might expect, thata third party will use the financial statement and the member’s compilation report does not disclosea lack of independence; orc. an examination of prospective financial information..02 This prohibition applies during the period in which the member is engaged to perform any of the services listed above and the period covered by any historical financial statements involved in such listed services..03 Disclosure of permitted commissions. A member in public practice who is not prohibited by this rule from performing services for or receiving a commission and who is paid or expects to be paid a commissionPart 1 — Members in Public Practice118 shall disclose that fact to any person or entity to whom the member recommends or refers a product or service to which the commission relates..04 Referral fees. Any member who accepts a referral fee for recommending or referring any service of a CPA to any person or entity or who pays a referral fee to obtain a client shall disclose such acceptance or payment to the client. [Prior reference: paragraph .01 of ET section 503]

A nonauthoritative question and answer regarding disclosure of a commission is available at www.aicpa.org/InterestAreas/ProfessionalEthics/Resources/Tools/DownloadableDocuments/Ethics-General-FAQs.pdf.


Summary There are many ways to make payroll profitable for your practice

Processing payroll for your clients offers a new revenue stream and can increase client engagement

Client base acquisition program can be a profitable solution when payroll is no longer part of your plans

Revenue share programs offer new revenue streams that can help with reinvestment into your practice



Q&A / Thank you for attending!

For more information:adp.com/accountant

855.408.3751