Be an HR Resource for Your Clients

From benefits administration to facilitating retreats, HR services fit many core CPA skills.


A company’s staff positions involve many human resources (HR) functions that CPA firms can provide relatively easily. Many firms already assist in traditional areas such as payroll and benefits administration. The profession’s roots in recordkeeping, tabulation and financial reporting give CPAs insight into organizations’ operational needs such as recruiting.

The long list of service opportunities includes setting up an HR department, regulatory compliance, labor relations, contract analysis, supervisory training, benefit plan design, job-grade classification systems, applying for training grants, due diligence for acquisitions and divestitures, recruiting, outsourced CFO help, equal employment and awareness training, benefits administration and performance evaluation systems—to name a few.

The first step is to find out what existing clients could benefit from help with. Then compare the services on clients’ wish lists with the firm’s strengths; choose areas of focus; identify the needed resources to service those areas; get the necessary skills through training, hiring or alliances; develop an appropriate service structure to avoid conflicts of interest; assign a service champion; and build more business by cross-selling and marketing.

Outsourced CFO consultants may not sign checks, bind a company in negotiations or otherwise obligate it for services, but they can provide other important senior financial management. They are suitable for handling difficult temporary assignments such as selling or shutting down parts of a company’s business, laying off personnel or liquidating assets.

Retirement plan third-party administrators all have fixed fees. Some CPA benefits plan providers or HR consultants say they are pleased with the move away from hourly billing to a fixed-fee environment.

Michael Hayes is a senior editor on the JofA . Ms. Hayes is an employee of the AICPA and her views, as expressed in this article, do not necessarily reflect the views of the Institute. Official positions are determined through certain specific committee procedures, due process and deliberation.

hether your firm’s clients manufacture widgets, dance at the barre or address the bar, none of them does business without colleagues, communication and collaboration—that is, without people. And managing any workplace team is hugely demanding: Employers must calculate and pay salaries, schedule and track tax and benefits payments, meet a host of workplace regulations and keep accurate records about every detail. With technology, however, outsourcing HR functions is relatively easy for companies, and in many respects using CPA firms is a natural fit.

Accountants have the knowledge and networks to offer a range of services to ease clients’ burdens. Many firms already provide HR services such as payroll and benefits administration, and accounting’s roots in recordkeeping, tabulation and financial reporting give CPAs insight into client organizations. That industry familiarity is letting firms expand into HR functions such as recruiting, too. Here’s how some practitioners have addressed marketplace needs to build an HR consulting niche.

Watch It Grow

In 1991 we administered about 10 retirement plans. In 2000 when I became a partner, we administered 125. Now we administer about 225.

—Sabrina L. Holme, CPA, Keiter, Slabaugh,
Penny & Holme, LLC, Glen Allen, Va.

A healthy, prosperous organization is that way because of its people. Each staff position involves tasks, lines of communication, legal and cultural obligations, training and development history and the complex regulatory human resources (HR) recordkeeping that attends compensation and benefits packages. That makes the list of potential HR service opportunities quite a long one.

Clients may need help staffing a short-term project, setting up an HR department or relieving overloaded HR employees. Some businesses need a full- or part-time CFO or require informed input on business structure, regulatory compliance, contract analysis, negotiations and supervisory training. Common staff issues are benefits-plan design, benefits administration, job-grade classification, performance evaluation systems and compensation. Other important service areas in which CPAs can help clients are fair labor standards, disabilities, mandated leaves of absence, safety and health issues, equal employment and awareness training.

New businesses have different needs such as assistance with site selection, position design, recruiting and applying for training grants. International businesses may require help with expatriate compensation. Restructurings involve due diligence, perhaps union agreements and employee orientation. Mergers will require an acquiring business to

Research standard industry wages, benefits and turnover rates.

Identify contingent labor costs and the percentage of contractors and temps.

Calculate benefit costs as a percentage of payroll, payroll costs as a percentage of operating income and average pay per employee.

Calculate retiree benefits obligations.

And someone has to facilitate retreats and write policy manuals.

For years Sabrina L. Holme, CPA, had heard clients complain about administering health and welfare plans, cafeteria plans and payroll. At first, her former firm Keiter, Stephens, Hurst, Gary & Shreaves referred much of that work elsewhere, but then it set up Keiter, Slabaugh, Penny & Holme, LLC, a 26-person, Glen Allen, Va., HR services entity of which Holme is now a partner. “We chose the area of employee benefits because it chose us,” Holme says. “Clients were begging for help.” Finding out what HR services your clients need is the first and most important step toward expanding into HR consulting, she says.

David Gaino, CPA, managing shareholder of 90-person, 40-CPA Moore Stephens Apple in Akron, Ohio, says, “When a client isn’t doing well, 60% of the time it’s a people problem.” His firm started offering HR consulting after a former partner noted that clients asked repeatedly for help with staff issues.

Russell J. Miller, CPA, founding and managing shareholder of Miller Grossbard in Houston, says his 24-person, 14-partner firm started offering HR consulting and CFO executive search and placement after a client asked for help recruiting a CFO. When the engagement turned out well, the firm looked into clients’ other HR needs. Within 12 months he knew there was a real opportunity and decided to market a number of business advisory engagements as “virtual CFO” services.

About 35% of Miller Grossbard’s revenue comes from HR consulting. Services include management recruiting, compensation studies, performance-based and nonqualified-employee-retention compensation plan design, organizational structuring, equity and phantom ownership plan design and employment-contract negotiations.

Frank A. Wisehart, CPA, is president of Wisehart & Wisehart Inc., a two-partner Dublin, Ohio, CPA firm that added CFO outsourcing to its niches in valuation and forensic services. Outsourced CFOs are suitable for handling difficult temporary assignments such as selling or shutting down parts of a company’s business, laying off personnel or liquidating assets, he says. Small and midcap businesses need the experience CFOs can provide to stay on top of changing federal, state and local compliance issues, particularly since Sarbanes-Oxley.

Once you have a picture of what HR services your clients need, evaluate your firm’s resources to meet them and its goals. Allan D. Koltin, CPA, and president and CEO of Chicago-based management and marketing consulting firm Practice Development Institute (PDI), says developing a niche means resolving a lot of issues such as “what and how to invest in staff, how to service clients and what risks to take to make money tomorrow vs. making money today.” Only you and your partners can decide whether HR consulting is suitable for your firm.

If you have done the research and you think the market is there,

Choose your areas of focus. Narrow the list of engagement possibilities based on the capabilities you know your firm already has.

Identify any additional resources you will require to service those areas. List what you need to strengthen your firm’s performance. Is it more staff training or more staff?

Get necessary skills, through training, hiring or alliances. Provide training or add people if you need to.

Develop a service structure that avoids conflicts of interest. Some CPA firms have spun off separate HR services entities to avoid conflict with attest clients.

Assign a niche champion. Putting someone in charge makes succeeding personal.

Build business by cross-selling and marketing. Referrals are golden. Other firms are good sources, and getting your firm’s name out in public through volunteer speaking and teaching can put you in direct contact with potential clients.

To make sure your firm has sufficient staff and skills, you may have to train or add people, or you can bring in skilled help though an alliance. Moore Stephens Apple brought in Richard First, a non-CPA HR specialist, to organize and oversee its niche. He markets a wide range of services that include labor relations, new-business and compensation design, help with acquisitions and divestitures, government compliance and international issues.

Alliances are a great way to bring in skills for new services, says William Pirolli, CPA, of Warwick, R.I. He champions the creative advantages of building a network of provider alliances and says considering new niches is a smart way to compete. For one engagement to resolve partner issues troubling one of his law-firm clients, he obtained the “temporary” help of HR specialist Angela Paolino of local CPA firm DiSanto Priest & Co. Based on that success, DiSanto Priest decided to spin off Bentley Consulting Group, LLC, headed by Paolino, to provide HR services to professional companies.

Miller Grossbard’s HR services consulting function is staffed by four people, two of them experienced principals who stay current by reading and attending seminars. HR focus magazine, , the Society for Human Resource Management (SHRM), , and the U.S. Department of Labor, , are excellent sources of information. To locate other educational sources, type human resources training into an Internet search engine such as Google.

New independence rules have heightened awareness of CPA responsibilities and conduct described in the AICPA Professional Standards, Code of Professional Conduct. To avoid any actual or perceived lapse of professional independence related to ethical judgments and confidentiality of client information, the AICPA answers independence and ethics inquiries at its ethics hot line (888-777-7077) or by e-mail at .

Aware they may not consult to companies they audit, some firms have chosen to separate HR consulting by spinning off a separate entity so no conflict-of-interest question related to client confidentiality or other issues will ever arise. CPA firm Keiter, Stephens, Hurst, Gary & Shreaves spun off Keiter, Slabaugh, Penny & Holme, LLC, in 2000. The separate structure ensures compliance with multidisciplinary practice restrictions while allowing Holme to bring in people qualified in unusual and highly regulated areas such as medical insurance underwriting.

Nine partners from the original CPA firm jointly own 25% of Keiter, Slabaugh, Penny & Holme. Three partners in the HR company (two of them CPAs) also work in the spun-off business and own 75% of it. Its staff of 26 includes partners, managers, underwriters and support staff. Eighteen work on health and welfare services, five handle retirement plans and three take care of payroll and cafeteria plans. About 65% of revenues come from health and welfare plan services, 30% from retirement plan design, consulting and administration and 5% from payroll services and cafeteria plan administration.

Wisehart, who specializes in outsourced CFO consultants, notes they may not sign checks, bind a company in negotiations or otherwise obligate it for services, but within those limitations they can provide the senior financial management that many small to midsize companies need.

Cross-selling and referrals from other firms are always good sources of new business, and volunteer speaking and teaching can get your name out and put you in direct contact with potential clients. When Wisehart markets CFO services, he reminds small businesses that CFO expertise can save them money. They don’t have to pay expensive benefits packages, and the savings may be more considerable than they think if the CFO’s experience and training prevent a costly mistake. “Small companies don’t always consider what an unfilled financial executive seat can cost in terms of risk,” Wisehart says.

Clients are concerned about the bottom line, First says, so “emphasize cost-effective solutions with small businesses. Small-cap businesses will quickly dismiss HR activities that do not provide a means to avoid or reduce cost.”

Some other tips:

Make sure a temp CFO candidate’s background and experience match the client’s business, says Wisehart.

Explain technology safeguards that protect a client’s employee data and keep them confidential.

Ask clients whether they’ve been satisfied with headhunters in the past, says Miller. Ask, “Are you comfortable taking a vacation with your existing management in charge?”

Cultivate cross-marketing within your CPA firm. For example, if you’re meeting with an existing client about tax planning and see a need to set up a retirement plan, pitch your HR consulting.

“When I meet with clients, I tell them about our health and welfare, payroll and cafeteria plan administration,” says Holme. “Clients usually like the idea of all benefits under one roof.” Or if a client calls with a question about a current 401(k) plan, answer the question and then propose other services suitable for that client.

Get to know financial advisers and attorneys. Educate them about your firm and cultivate them as referral sources.

Offer a plan to wind down services when a client’s immediate needs are met.

Moving from a CPA firm culture into new areas brings up the issue of billable hours and hourly billing. Retirement plan third-party administrators all have fixed fees, so Holme’s company moved away from hourly billing to fixed fees. “It was a challenge, but we use a standard fixed fee and indicate exactly what services we provide for it. We charge additional fees for anything nonstandard.”

Pirolli agrees. “Bundled fixed pricing is the way to go,” he says.

» Practical Tips
Emphasize cost-effective solutions. Clients will quickly dismiss HR activities that do not provide a means to avoid or reduce cost.

Explain the technology safeguards that will protect a client’s employee data.

To market recruiting services, ask your clients, “Are you comfortable taking a vacation with your existing management in charge?”

Offer a plan to wind down your services when the client’s immediate needs have been met.

To succeed, take the time to understand the client, says Miller. “Ask questions. Get them to talk. Listen for what is not said as well as what is. Our best resources have been good communication and our clients’ trust,” says Miller. Do a good job, and growth will take care of itself.


AICPA National Healthcare Industry Conference 2006
Sheraton New Orleans
New Orleans
November 2–3

AICPA Employee Benefit Plans Accounting, Auditing and Regulatory Update
Omni Shoreham Hotel
Washington, D.C.
December 7–8

Employee Benefit Plans: Audit and Accounting Essentials (# 733000JA).
Ethics: Non-Attest Services, Integrity, and Objectivity (#739400JA).

Management of an Accounting Practice Handbook, l oose-leaf version (# 090407JA); e-MAP, online version (# MAP-XXJA).
Marketing a Consulting Niche by Allan D. Koltin (# 056508JA).

Web sites
Employee Benefit Plan Audit Quality Center, .
CPA Marketing Tool Kit, .
For guidance for CPA-firm staffing and training-needs analysis go to .

For more information, to register or to make a purchase, go to or call the Institute at 888-777-7077.

HR focus magazine , .
Society for Human Resource Management (SHRM), .
Workforce Magazine, .


Year-end tax planning and what’s new for 2016

Practitioners need to consider several tax planning opportunities to review with their clients before the end of the year. This report offers strategies for individuals and businesses, as well as recent federal tax law changes affecting this year’s tax returns.


News quiz: Retirement planning, tax practice, and fraud risk

Recent reports focused on a survey that gauges the worries about retirement among CPA financial planners’ clients, a suit that affects tax practitioners, and a guide that offers advice on fraud risk. See how much you know with this short quiz.


Bolster your data defenses

As you weather the dog days of summer, it’s a good time to make sure your cybersecurity structure can stand up to the heat of external and internal threats. Here are six steps to help shore up your systems.