by David McClure

It was 2003, and the economic recovery was still tentative across most of America.

Employment was still down, and the markets fluctuated wildly. The Fortune 500 continued to cut back investment and spending in an effort to shore up uncertain earnings. But in that year, ADP — Automatic Data Processing — launched a bold program to secure its position in quality, leadership and service.

“We’ve been tightening our belts long enough,” wrote chairman and chief executive Arthur F. Weinbach in the company’s annual letter to shareholders. “Our markets are too good and our associates are too valuable to hold off on further investment. So, while the timing of the recovery remains unclear, now is the time to take aggressive steps to position us for the future.”

A part of that investment was in programs for the accounting industry.

Fifty-five years ago, Henry Taub borrowed $6,000 (which he faithfully repaid at the rate of $35 per week) and launched Automatic Payrolls Inc., a manual payroll-processing service for companies in northern New Jersey. The company started with one client and completed its first year with revenues of $2,000.

But in that year Taub revolutionized the way businesses looked at payroll and almost single-handedly started the administrative outsourcing industry, decades before outsourcing became a global imperative. Soon after the company went public in 1961, ADP associates, through the stock purchase plan, had the opportunity to regularly purchase shares of stock in the company at reduced prices. This way, those who helped to make the company a success not only shared in the profits, but also in its ownership.

Today, ADP boasts over $7 billion in revenues and more than 500,000 clients. It is one of the largest independent computing services firms in the world, with a full suite of human resource administrative services; integrated securities transaction processing and investor communications services; computing solutions for auto and truck dealers and vehicle manufacturers; and computer-assisted auto damage repair estimating.

Services to the accounting industry fall within the ADP Small Business Services Unit, which is part of ADP Employer Services. Those services include payroll; payroll tax services; a pay-by-pay program for worker’s compensation insurance; electronic time and attendance management; retirement services that include administration of 401(k), simple IRA and solo (k) plans; pre-employment verification; state unemployment insurance management; and a human resources help desk.

The clients for these services are the more than 340,000 small business companies with fewer than 50 employees (of which more than half have fewer than 10 employees) and the accountants who advise and serve these small businesses.

“When we elected to move forward with additional investments, one of our priorities was to strengthen our relationships with accountants by developing ADP tools and resources designed to help them to better serve their customers,” said Janice Colby, president of ADP Small Business Services.

“We did a lot of research and a lot of interviews with accountants, and what we concluded is that firms are different, and individual accountants are different, in how they want to grow their businesses. It is all about choice, and it is all about service,” Colby notes.

“Many payroll decisions are driven by recommendations, and 85 percent of those recommendations are made by accountants,” said Rob Wentling, vice president of product marketing for ADP Small Business Services. “To help determine what will work best with each accountant and that accountant’s clients, we field a sales force of nearly 1,500 associates. Their job is to work individually with each accountant to find the right match of services to help them grow their business.”

The cornerstone of ADP’s services is the ADP EasyPay solution, which enables the company or accountant to submit payroll information via PC, phone or fax. ADP produces checks, creates reports and handles all payroll tax deposits and filings. Direct deposit and check signing also are available.


ADP-at-a-glance
ADP Small Business Services Division
Parsippany, N.J.
www.sbs.adp.com
(800) CALL-ADP

Chief executives: Janice Colby, president; Richard Watson, vice president of product management and accounting services; Rob Wentling, vice president of product marketing.

Main services: Payroll management, tax and compliance services, human resource management, benefits administration, tax and labor management, and insurance services.

For accountants who want to leverage the Internet to process payroll and tax filings, ADP offers its EasyPayNet service. Users can create and print customized personnel reports quickly and easily, access electronic versions of reports on the same day that ADP processes the payroll, print payroll checks and vouchers directly from a laser printer, and view and print pay stub information for a specific check or period of time.In December, ADP enhanced its EasyPay offerings to provide accountants with quick, easy and secure access to their client’s payroll data anytime, anywhere. Known as the EasyPay Data Access Suite, this Web-based application enables accountants to access all EasyPay and EasyPayNet client data regardless of the client input method (phone, fax, PC or Internet) within 12 hours of client input.

Prices for the services vary by the features selected, by geographic location and, in the case of payroll services, by the pay frequency.

In addition to its products and services, ADP has initiated three resources to help accountants stay current and expand their professional development.

The Professional Education Center, located on the Web at www.accountant.adp.com, is a Internet-based site for continuing education. The monthly Tax Researcher newsletter reports on current federal and state payroll and tax issues. And the quarterly Accountant Focus newsletter features updates
on practice management, resources and relevant ADP products and services.

In July of 2004, ADP Small Business Services announced a nationwide roll-out of a new wholesale payroll offering, a solution package aimed at the accounting industry using the Web-based EasyPayNet service. With this wholesale service, accountants can input their clients’ payroll data into the application, and ADP will calculate the payroll taxes and handle all related deposits and filings.

Accountants may choose either to print checks and reports from their office or have ADP deliver this information directly to the client. ADP bills the accountants for the services, and the accountant can then bill the client.

“Payroll services can be a challenge for accountants, particularly if you are dealing with clients that must manage more than one state,” said Richard Watson, vice president of product management and accounting services for ADP Small Business Services. “There is a lot of back-office administration to deal with, and substantial potential liabilities if you make a mistake.”

“You can do payroll right every time for a year and no one will pat you on the back,” Watson said. “But if you have a problem just one time, you can have your clients, their employees and the Internal Revenue Service knocking on your door. There is a lot of downside, and very little upside, to doing it yourself. We’re in the business of delivering service to accountants with a guarantee — ‘Accurate, On Time, or On Us.’”

The wholesale services are one of three ways accountants may choose to manage payroll services for their clients. Other ways including referring their clients to ADP, or selling their payroll business outright when they elect to leave the industry.

But these services are just the beginning of ADP’s plans for partnership with the accounting industry. “Our wholesale payroll program is a great opportunity for us in the accounting marketplace,” said Colby. “And with the national roll-out well underway, we are looking to make the program even more valuable to accountants. We plan to augment our payroll services with an after-the-fact payroll solution by the end of this calendar year, and to expand the services offered through our HR HelpDesk and retirement services into the accounting markets as well.”


David McClure is the president of Kent Associates, in Alexandria, Va., an independent testing labratory and evaluation service.

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