March 2018

The rEvolution of Payroll

By Darren Root, CEO

Over the past year and a half, I’ve been on a quest to figure out the future of payroll in the accounting profession. I traveled to New York and San Francisco on multiple occasions to meet with vendors and gain some much-needed insight.

What I already knew going in is that the current payroll model in most firms is grossly out of date. Think about it. In terms of products and delivery mechanisms, what has really changed in the past 30 years? What I did NOT know…what I learned along the way…is that it’s not just about payroll anymore.

We are firmly in an era of great change. Today’s clients look to their CPAs for far more than payroll. Their needs have expanded into the area of human resources as they look to profitably manage their human capital—their people. Understanding this, it’s safe to say that we’ve moved beyond a simple evolution in payroll services. Rather, we are witnessing the overthrow of an obsolete mindset around the level of service clients require. Forget evolution. We are smack dab in the middle of a payroll revolution!

Enter the term: Human Capital Management (HCM).

A new acronym for a new age. A more sophisticated descriptor of the deeper level of service today’s business clients require.

But what does it mean?

HCM is defined as: “The comprehensive set of practices for recruiting, managing, developing and optimizing the human resources of an organization.” HCM views employees as assets that can be invested in and managed to maximize business value. This means that effective HCM practice requires deep insight across payroll, HR and benefits administration in order to best manage people for maximum value.

So as we move beyond simple enhancement of payroll services, bigger questions emerge. “Do I have the expertise to expand into full HCM services?” “Where do I even begin?” “How do I ensure that I’m offering the right services using the best solution?”

Answers for all your questions

If we start simple, it’s much easier to understand just how easy it can be to move into HCM services. And starting simple means starting with payroll.

Over the years, firms have offered payroll services in three primary ways: 1) Fully outsourced (no involvement), 2) Fully in-house (100 percent involvement) and 3) The hybrid approach (firm controls upfront setup, but outsources back-end processing). While there is no right or wrong answer in terms of which option you choose, there are variables to consider:

  • Client Stickiness: Payroll is what we call a “sticky” service. Due to the complexity of payroll, clients are less likely to leave their CPA because of the perceived pain of doing so.
  • Staffing: Do you have the expertise and continuity of staff to offer a fully in-house payroll solution? If you could use your staff for the highest possible realization rates, would that be payroll, client accounting or something else?
  • Technology: Understanding today’s demand for advanced technology and on-the-go solutions, which model best supports your drive to be a Modern Firm™?

When I consider all the variables, the hybrid approach makes the most sense for my firm. This offers the value of a highly sticky service without the onus of full in-house processing.

Now that you understand your options and the variables to consider, let’s address human capital management.

Think of HCM as an expansion of basic payroll services. The transition into a bundle of human resources-related options to assist your business clients in effectively managing their human assets. This includes HR, benefits administration, time and attendance, recruiting, onboarding, and yes, payroll. The same logic applies with the hybrid approach: You remain the “face” of the service, handling setup, while outsourcing the HCM processing function.


Now on to directly addressing those nagging questions.

  • “Do I have the expertise to expand into full HCM services?” When you consider the hybrid approach, you don’t have to be an expert. All you have to do is help your clients with initial setup while your HCM vendor of choice handles processing.
  • “Where do I even begin?” You begin with the best vendor for the job. And that’s where Rootworks comes in. Remember all that traveling I did to speak with payroll vendors and vet the right solution for you. Well, I found one (to be revealed below).
  • “How do I ensure that I’m offering the right services using the best solution?” Same answer. We have a vetted solution for you—one that supports our firm’s preferred hybrid approach (but can support any of the three models above) and offers best-of-breed cloud and mobile technologies.

Why Rootworks partnered with ADP®

The big value in providing HCM services to clients is the relationship building. This is one more area where you can provide expert advisory guidance to your clients. But if you’re going to do it, you have to do it right. You have to offer a modern, completely integrated end-to-end solution that meets the needs of today’s busy and mobile-driven business clients.

For more than a year, my firm, RootAdvisors, tested hybrid payroll solutions for all the reasons mentioned in this article. Our team vetted, analyzed and implemented actual clients in multiple solutions. At the end of it, we decided to partner with Run Powered by ADP® Payroll for Partners. This decision was based on where the company is with its product (an industry leader) and where I know it is going in the near future (consistently innovating). It also allowed us to start with payroll as we continue to research transitioning into full HCM services—what we know our clients truly need.

Even more appealing, the partnership allows us to pass down a significant product discount to Rootworks members. Music to any accountant’s ears.

ADP® offers a fully integrated HCM solution. So when you are ready, you have a simplified outsourced solution ready and waiting. And remember, we’ve completely vetted the solution for you.

I certainly don’t expect anyone to make a decision now…in the heart of tax season. But I did want to let you in on why Rootworks has partnered with ADP® and the value it offers our membership.

Post tax season I will be ready to provide you with much more information about my journey and the future of HCM in today’s modern firms.

I hope your next six weeks are calm and profitable.

For more information on our partnership with ADP, please visit

Make It Count!

By Leah Reid, Education Team

Every communication matters as tax season reaches its fever pitch.

We’re now deep into tax season. During this busy time of year, we want to remind you to take a pulse of your firm communications. This can be as easy as answering two simple questions: How effective is your staff communicating with one another, and how effective is your firm communicating with your clients?

Internal communication: Time is of the essence right now, so it is important that each email, instant message and post-it note counts.

  • Rootworks best practices: Eliminate internal emails unless it is to forward a question or inquiry from a client. Do this by implementing and using an instant messaging solution such as Slack to better manage internal communication. Tip: If you have implemented Slack but are still receiving internal emails, respond to the email in Slack to encourage adoption.

Client Communication: Do your clients upload and access their documents exchanged with your firm securely? How are they contacted if there is missing information that needs to be obtained by the firm to be able to complete their tax return?

  • Rootworks best practice: Identify a single person who is in charge of contacting clients to request missing data. Consider using a secure client collaboration platform that can deploy notifications, tasks and documents securely, like Liscio.

The Core Considerations

By Chris Dickens, IT

A five-part framework for your Cybersecurity

In 2014, the National Institute of Standards and Technology published its first Cybersecurity Framework (referred to as the NIST CSF), which created a methodology for assessing and improving security operations and standards. Originally focused on government contractors, the standard is gaining in popularity as a best practices blueprint for security operations. The NIST CSF covers the following five core functions:

Identify — knowing all business assets and processes to understand what is most important to operations, and where its risks may exist.

Protect — developing safeguards to ensure confidentiality, integrity, and availability of assets and systems.

Detect — identifying risks that require mitigation, or exploits as they occur.

Respond — developing procedures in the event of a compromise or attack.

Recover — restoring business processes, applications or data to normal operations.

Without an understanding of the larger framework, small businesses will tend to focus on the “Protect” aspect of the NIST, without investing as much time or resources into the other four. It is important, however, in developing security best practices, to address all five with the same level of priority and attention.  

In the coming months, we’ll cover each of the core functions. For now, a great exercise for firm owners or principals to go through is an analysis of exactly where you may stand on each core function. Have you explicitly identified your core assets and critical processes? How are you currently detecting anomalies and potential attacks? What plans do you have in place to respond to and recover from compromises? These questions will identify the most pressing needs in your firm in creating a comprehensive cybersecurity framework.

Don’t Miss Out on Tax Season Marketing Opportunities

By Chris Rund, Marketing Team

This level of contact with your clients doesn’t come often—seize it.

Here we are, in the thick of it. Tax season has entered the last six weeks, and it’s the time of year when you have many more touch points with your clientele. Although the primary focus falls on delivering work product, don’t let good marketing opportunities slip through your fingers. Here are the top five to consider during tax season:

    1. Account Reviews
      Your clients’ financial results and tax liabilities tell a deeper story. Spend time understanding the drivers behind the numbers and identifying opportunities for deeper, higher-value engagements with the right clients. Busy season is a great time to note which ones are ripe for more analysis and follow-up client meetings following tax deadlines.
    2. Referral Requests
      Pleased clients are your best form of marketing communication, and most will gladly do you the courtesy of recommending your firm to a trusted friend or business associate. The key is remembering to ask them for the favor. Why not include a referral form with your best clients’ returns and let them know you appreciate their advocacy for your firm within their personal and professional circles?
    3. Audit Protection
      Early results from our new tax season member survey reveal that slightly more than half of responding firms do not offer audit and/or identity theft protection services to their tax clients. Yet, firms who do offer these services have reported up to $30,000 of high-realization, topline revenue to their tax-season earnings. Why leave good money on the table? Adopt basic protection services as part of your product offering, if not this season, then next!
    4. Ask for Mentions on Social Media
      Most happy clients are glad to give you a glowing mention on their social media accounts. Just ask! Consider slipping a note in with client returns, perhaps in conjunction with referral requests. If you have a grumpy client, be sure you find a way to turn the frown upside down before you ask them for that favor. Better to not ask at all, rather than risk a dent in your reputation on social media.
    5. Ask for Google Reviews
      Same principle goes for online review requests. Identify clients who are coming in for a smooth, happy landing and reach out to them with a request for a favorable online review on sites such as Yelp! or Google. Be sure to set good, ethical boundaries, though. Never offer gifts or incentives in exchange for good reviews. We’ll dig deeper into this important part of your online presence after tax season wraps up. In the meantime, here’s an online resource to help you get started.

All Members

KnowBe4 Member Offer

KnowBe4 is the world’s largest security awareness training and simulated phishing platform. Businesses use KnowBe4 to educate their staff on Cybersecurity threats. Rootworks has been using KnowBe4 since last year. The company is offering Rootworks members a 25 percent discount. You can find more information in Grow under Learn | Vendor Information. Very important note: KnowBe4 is running the 25 percent discount through March 31. We will work to extend that as we get closer.

Resource Update Webinars review and explain all newly added or updated items in the Resource Center. (Qualifies for CPE.)

  • April 26 — Spring Resource Update Webinar
  • September 6 — Summer Resource Update Webinar
  • December 14 — Fall Resource Update Webinar

Planning Workshop Webinars are time spent working ON your business. Use each session as a checkpoint throughout the year.

  • May 10 — Spring Planning Workshop (with Tax Season Recap)
  • July 19 — Summer Planning Workshop
  • November 15 — Fall Planning Workshop

Technology Webinars cover new software and improvements to existing software. (Qualifies for CPE.)

  • May 24 — Spring Technology Webinar
  • August 23 — Summer Technology Webinar
  • October 26 — Fall Technology Webinar

Summer Learning Center event lodging update: Hyatt Regency hotel booking links are now in Grow for all summer workshops. We’re still working to obtain links for The Ritz-Carlton booking for Sarasota Inspire conferences at the end of the year.

Academy & Advantage Members

We have two staff trainings in March and two in April. We’ve also added a Culture-themed staff training on May 9.

Register for all events here!


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