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Email: brad.kirschner@hkpseattle.com

Commissions

What's in it for me—and you?

The sales person coming to call is an important part of being in business. Although the visits are often at inconvenient times, it is through the sales process that I learn about the products and services that are currently in the market place; it is how I learn what might be useful to me and my clients. I welcome most of those who call on me.

Most of my business clients know I believe in outsourcing payroll to a specialist. It will remove a great deal of grief from the business owner, which alone is worth the payroll processing fees, not to mention the relief from penalties. There are three major players in the payroll processing industry that focus on the growing business-ADP, which has a successful history in corporate America and is now focusing on attracting the smaller business, Paychex, which got its start serving the smaller business, and Intuit, the publisher of the hugely successful QuickBooks accounting program. Although I am a QuickBooks fan, I tend to favor ADP and Paychex, because they each have a real live breathing sales person who will do what it takes to make sure their clients are happy. They also offer related Human Resource products, such as retirement plans and HR management.

The ADP sales person called on me the other day. I was discussing my Web site with her, and suggested I might include a link to ADP for those who are seeking payroll processing services. (I would also include a link to Paychex.) The representative responded a couple of days later and offered me a deal where I would receive a percentage of the revenue earned by ADP from referrals from me and my Web site. I was angry! I was offended! I hope that when I refer a service to my clients it is because I believe it is in my clients' best interest. I get compensated for the referral by having a satisfied client who continues to use my services and refers others to me.

Now Paychex isn't all that clean. Paychex is the recommended service of the American Institute of Certified Public Accountants, the national trade group of my profession. I strongly suspect that the recommendation was the result of some payments to the AICPA, rather than the AICPA surveying the market place and choosing the best.

Why say all this?  I only hope my profession gets its act together and doesn't further tarnish its image by recommending products and services based on what's in it for them, rather than what is best for the client.

As a follow on to this discussion, I received a call from a representative from a New York based lender that offered me a commission for any loan made as a result of my referral—or he could reduce the cost to my client by the amount of what would have been the commission.  I ponder this proposal.  Is it the same as the payroll proposal, or am I offering a benefit to my clients if I refer them to this lender?  I welcome your thoughts.

-Brad