Rich Frotton, a cofounder of Digit Payroll, began his professional career as a financial statement auditor and then moved to a smaller CPA firm working in all facets of small to mid size business accounting and tax work. These accounting firms would regularly recommend outsourcing payroll functions to payroll service bureaus. The recommendation seemed logical. The service was relatively inexpensive and would remedy a huge headache for business owners.
In the early days, still employed by one of these firms, Rich frequently found himself correcting errors made by these large outsourced payroll service bureaus, as part of his monthly visits to his account base. Most routine functions seemed to be processed correctly, but many yearend special payroll adjustments and other non-routine payroll issues seemed to end up on his plate rather than being handled by the payroll service.
The Aha! moment
Rich began to notice two things. First he was correcting more and more payroll service bureau errors, and second, some clients were asking Rich to prepare their payroll rather than the service bureau.
One of Rich's close friends from college, Bob Higley, also a CPA, began brainstorming about possible businesses to start. Bob graduated with Rich from Susquehanna University, then went to Rutgers for an MBA and passed the CPA exam. Bob was working as an accountant at Johnson & Johnson. He had a great job but was getting weary of the big corporate business mentality and wanted to explore other opportunities.
After a few months of discussion, they came to the conclusion that what was lacking in the small to mid-size business market was a payroll service bureau that truly catered to that market - to the small and mid-size businesses specifically. The big companies were not offering personnel that were well trained and could talk to business owners on an equal plain and give practical guidance. Digit Payroll was created in 1993 with a total of 10 clients.
Digit Payroll Today
Eighteen years and 2,300 clients later, the same initial philosophy prevails. Digit Payroll still retains their first full time employee. In fact Digit Payroll has never lost a full time employee since their inception - not one in 18 years! All of their payroll specialists have at least 10 years of experience in accounting and or payroll functions. Digit Payroll has invested heavily in technology. In fact their technology is more current than that of their international Fortune 500 competitor which is still using a 20 year old UNIX system.
But it’s not the technology that binds Digit Payroll to its clients. Its trust and business similarities that Digit Payroll has in common with its clients. Digit Payroll is, in many ways, just like their clients. A small business competing against larger competitors who just does it better.