Operational Efficiencies

1. Operational Efficiencies

2. Operational Efficiencies Introductions: -Laurie Beppel; Director of Client Development, PayChoice -Heather Hubbard; Manager, Payroll Services Operations, Payroll Services -Randi Schwartz; Support, PayChoice

3. Operational Efficiencies Operational Efficiencies: -Staffing -PayChoice -Controls

4. Operational Efficiencies: Staffing Hire Good People and Keep Them: -What does “Good People” mean? -Why are they important to efficiency? Skill Sets and Background: -Payroll background -Customer service -Computer literacy -*The “Production Mentality”* -Sense of Urgency Training: -In house -Other resources

5. Operational Efficiencies: Staffing • Staffing: • -200-300 Clients, most employees do all tasks except sales • -300+ Clients key areas are assigned to personnel and evolve into specialization: • Sales • Payroll Specialist (Data Input and CS) • Hardware/Software Technology • New Client Set up • Operations Supervision • Tax Control • Funds Transfer and Impounding • Facilities, Supplies, Phones, etc • Owner/Manager

6. Operational Efficiencies: Payroll Services • Payroll Services : Staffing • -Client base currently consists of approximately 2075 payrolls. • Production day ends at 4:00 pm daily to accommodate EOD process. • Phone volume 10,128 monthly, avg 440 daily • Phones are setup to “bounce” to the next teammate. • -13 full time CSR’s and 1 float. • -CSR’s broken up into two teams: • Each team has a team leader responsible for general questions and assistance. • Work hours vary within each team to accommodate EOD. • General work hours 8 to 5 M-F, two members from each team work 9 to 6 M-W and 8 to 5 Th, F.

7. Operational Efficiencies: Payroll Services Payroll Services : Special Staffing Groups • -Training Supervisor (to maintain overall consistency. Use of 3, 6, 9, 12 month training skills assessment • -Skilled CSR’s (evaluated on customer service, phone skills, client education of ancillary products (401k, W/C, PayChoice Online, etc) • -High Profile Team (select group of seasoned staff to handle emergency situations and complex payroll needs) • -Conversion Team (works with new clients and processes a minimum of two payrolls with client prior to handing off to a CSR, sales team and tax department) • -Distribution: • 1 full time clerk and two part time floats who work M, T, W (shared with tax and production) • M, T, W, there are approximately 400 payrolls daily, Thursday 100 and Friday 50 • Delivery methods: USPS, UPS, FedEx, Courier and Branch, the majority being delivered via bank branch delivery system.

8. Operational Efficiencies: Payroll Services • Staffing at the Smaller Service Bureau: • Cross training is very important. Allows an easier transition if a staff member leaves. • While larger bureaus have enough work to distribute, this may not be the case with smaller bureaus. CSR’s may need to wear more than one hat. • The training your staff receives the better they will service your clients and grow your business. • CSR’s should be aware of all new products and have a basic understanding of them. Since these are the people that have the most contact with your clients they can best evaluate their needs and suggest new products.

9. Operational Efficiencies: PayChoice • Are you using PayChoice to your advantage? • -New Client setup: • Auto-mode: a wizard that takes you through the screens necessary to build a new client. • Standardize billing, reports, pricing • -New Client Models: • Speeds up New Client installation • Define earnings, taxes, deductions, deduction/tax sequencing, timesheet layout • Standardize various reports and layouts • Use the standard models already in PayChoice or create your own based on your Service Bureau needs. • Load new payrolls one at a time: • YTDs, balances, etc.

10. Operational Efficiencies: PayChoice • Are you using PayChoice to your advantage? • -Production Control: • Scheduling of payrolls to balance work load versus staffing needs • “Call Out” schedule: our Service Bureau • -Auto Pay: • Setup clients who have standard hours, salaries, etc • Create payroll transactions for all EEs • Release and run as batch • -Payroll Mode: payroll will process on the user’s PC • Is this efficient? • When is this the way to go? • -Batch Payroll: payroll will be sent to the batch pool for processing. • Batch processing is a time saver for larger service bureaus as it frees up the processors’ PC to enter additional payrolls. • If using Batch processing, make sure to have at least one PC actively processing batch payrolls • Prints payrolls as they process; in proper output order

11. Operational Efficiencies: Payroll Services Payroll Services : Production -Production Control (used to ensure scheduled payrolls are processed timely) -Client payroll submission deadline 11:00 am daily (those clients who have not submitted are called, this allows for any file mishaps that we may need to correct and still start EOD timely) -Auto Launch Online payrolls (those clients that are comfortable with PayChoice Online are set up in scheduling for “AUTO Launch P/R” and go directly to batch)

12. Operational Efficiencies: Payroll Services • Payroll Services : production cont: • -Web payrolls “unattended” (cycles Online clients from WEB unzip queue into production) • -ViewChoice setup on all clients (direct access to most client reports regardless of PayChoice status) • -Daily Tax Liability review: • Two copies of tax liability are printed with each payroll, one is packed and one is pulled and set aside. • Tax dept reviews them throughout the day to make sure Fica and Med match and no new states have been added in error. • *Although this may seem a waste of time, it actually saves us considerable time at quarter end. We have reduced quarter end adjustments from approximately 130 to 25.*

13. Operational Efficiencies: Payroll Services • Variance Reports • Variance Reports can be run at anytime from the Company Overview screen in PayChoice. It is easier to fix a variance when it happens then to wait until the end of the quarter or the year and have to spend time researching the variance prior to fixing it. • - Printing Variance Reports for remote/web clients after each payroll will alert the processor to any inappropriate additions or changes that the client may have made in the payroll run. • - For clients that are input at the service bureau, routinely running a Variance Report saves time at the end of the quarter or the end of the year researching variances and doing the necessary adjustments.

14. Operational Efficiencies: Payroll Services • Payroll Services : production cont: • -Daily inventory of distribution stock: • Nothing is as scary as finding out you are OUT OF STOCK and stopping production is out of the question • Smaller service bureaus may do this on a weekly rather than daily basis. It is usually a good idea to have one person (with a back up, of course) assigned to this task. • -Manifest confirmation: Each afternoon packed payrolls are matched to the manifest and placed into a secure clear bag for transportation • -Regular file maintenance: • Cleaning out W/C files, EFTPS files, ACH, Billing • Year End file Maintenance: • Clearing out Terminated EEs

15. Operational Efficiencies: Controls • Controls Necessary: • -Employee: • OT approvals • Employee job descriptions • Employee payroll policy in place • Employee HR policy in place • -Financial Controls: • A/R • A/P • Financial tracking/reporting: • Monthly financial reports recon; including income and expense tracking • Recon of Client funds held in trust daily • Weekly billing reconciliation • Monthly billing review

16. Operational Efficiencies: Controls • Controls Necessary: • -Processing: • Logs of reruns, undos and adjustment payrolls • Client attrition tracking and monthly analysis • QE and YE standards and timeframes • All procedures and policies in place and communicated to all EEs

17. Operational Efficiencies Questions????

18. Operational Efficiencies: Staffing • Keep Informed and Up To Date: • -Join payroll organizations: IPPA, APA, User Groups • -Network with others outside of your immediate market • Monitor competition • Follow legislation • Share your experiences • Listen to others experiences, missteps, ideas • Monitor technology • Learn techniques for increasing sales, marketing, pricing • Attend PAI Conferences