Executive PressF R O M T H E D E S K O F J I M C O S T E L L O

Over the last several months,we've continued to invest inhardware, network infrastructureand software development in aneffort to improve performance ofPayChoice Online and OnlineEmployer. Since December of 2006,we've increased system capacity andnetwork infrastructure by more than

200%. Additionally, licensees continue to add newclients resulting in an overall 43% in growth activity.

Despite these positives, I’d like to address theperformance issues we continue to experience withPayChoice Online. After outside analysis of the criticalproduction week following the Labor Day holiday, twokey issues were discovered:

Page refreshes on PayChoice Online were occurringafter every ‘enter' keystroke. Thanks to Rex Havertyof Payroll Network who pointed out the issue, wehave applied a software fix that now allows only arefresh on ‘save' functions. Testing shows potentialfor a 25% increase in performance.

Recently we upgraded network hardware to directfiber connections and consequently uncovered aconfiguration issue that was impeding performanceat our co-location. The issue was rectified on 9/15by providing an update to the co-location. Theremaining fiber optics will be installed on 9/22 withexpectations for an additional increase inperformance and capacity that will carry us through year-end.

As always, these performance issues are one of our toppriorities as it directly affects our licensee base and ourinternal service bureau. For this reason, we'vecontracted with a third party network-monitoring firmto assist us with future capacity planning andconfiguration issues. I can assure you thatall our resources are focused oncontinual improvements andenhancements.

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1 4 T H A N N U A L

User’s ConferenceOnly a couple of weeks away…

Get Ready to

Ride the Wave of Payroll Success!October 3-6, 2007

InsideInside

this issue

EasyChoice Workers Comp

Alliance Scoop

14th Annual Users Conference

Encore Update

Training NewsAre you a hands-on learner?

Well, get yourself to the UsersConference and you'll have plentyof opportunity for training onENCORE, Sales and Marketing,Year-End, E-filing, Operations, andmuch more.

And why not earn CPE Creditswhile you're at it? PayrollAssociates, LLC is registered withthe National Association of StateBoards of Accountancy (NASBA) asa sponsor of continuingprofessional education on theNational Registry of CPE Sponsors.For more information regardingadministrative policies, pleasecontact our office at 856-231-4667.

840 North Lenola Road, Suite 6 Moorestown, NJ 08057Phone (856) 231-4667 Fax (856) 231-4224Email mary.fertig@payrollassociates.com www.payrollassociates.com

S P O N S O R S

11

22

EasyChoice Workers Comp

Are you enjoyingthe sweet summerprogram from TheHartford? FromJuly 2 through September 28, 2007, licenseesearn a $25 American Express® Gift Cheque forevery Workers Comp insurance lead submittedthat appears on The Hartford's Target ClassList. That's $25 for any customer you refer toThe Hartford for a Workers' Comp Quote…andthat's a lot of ice cream! (Please note that theTarget Class List represents only the classestargeted for this promotion.)

To be eligible, you must submit the providedleads form to your underwriter by September 28for you to receive your Gift Cheques. Forms maybe emailed or faxed to 877-538-1130. Foradditional questions regarding the campaign,please contact your underwriter. If you do notknow the name of your underwriter, pleasecontact Martha Pauly at 860-409-8403 ormartha.pauly@thehartford.com.

Top sellers to be announced next issue!

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Oregon GettingAround Fees P E R H A P S A P A Y C A R D T R E N D O T H E RS T A T E S W I L L F O L L O W

Currently Oregon employers arepaying wages via debit cardsunder certain conditions,according to the statelabor agency. EffectiveJanuary 1, 2008, Oregonlaw states that anemployer and anemployee may agree that wageswill be paid through a direct deposit system,automated teller machine (ATM) card, payrollcard, or other means of electronic transferwithout any fees to the employee. Theemployee will now be allowed to make aninitial withdrawal of the entire amount of netpay or choose to use another means of paymentof wages, each of which involves no cost to theemployee. However, one little caveat to the newlaw: an employee must be able to withdraw hisor her pay without a fee in the county wherethe paycard is issued. (excerpt from the article,"New Oregon Paycard Law" from the July 6issue of PayState Update (Issue No. 14, Vol. 9).

Once upon a time, there was a lovelyBear family in Hicksville, New York—one of the most vibrant businesscenters in Long Island. Well the storygoes like this. Papa Bear was aneducator for 6 plus years. He thenwent on to earn his Masters inGuidance and Counseling but a greatposition as controller at an insurancebrokerage firm lured him away. Duringthis time Mama Bear was very busyherself, taking care of the young cubs,donning her suit and then rushing outthe door to be a tax accountant forPayne Webber/Jackson Curtis. One dayPapa Bear said over an exquisite mealprepared by Mama Bear, “Hey Mama,let's do payroll! I see a real niche inthe marketplace. No one out thereoffers custom payroll solutions withpersonalized service. What do ya say?”Well Mama Bear exclaimed, “WhyPapa, you took the words right out ofmy mouth! Payroll is simply afabulous idea!” Soon there came atime when Baby Bear entered thepayroll picture. During high school,Baby Bear worked in customer serviceand data entry. After going to collegeand getting some great experienceselling magazine space nationally, shewanted to put her marketing degree towork for the family.

You may have guessed by now thatthis story is about the Accardo family:Ralph, Connie and Susan…and theirtrue baby, Accu Data Payroll. Severalattributes have contributed to theirsuccess beyond the family affair. Ifyou're a client of Accu Data Payroll,everyone knows your name and yourbusiness and will help you on the spot.And rightly so, Accu Data Payrollemployees work hard but are paid veryhandsomely and coincidentally arevery loyal. If you contact Accu DataPayroll, you get a LIVE person! Theyhave never, nor will they ever, usevoicemail—something that truly setsthem apart from the competition.Extreme service is their philosophyever since they got in the payroll

business. Nocold calls either.New businesscomes strictlyfrom networkingand referrals.And over the past six years, proud Papa and MamaBears go out on calls with theirdaughter, Susan. Another strength istheir desire to learn “different”payrolls—the ones that others simplycan't get right. “Restaurants are anatural for me coming from a family ofrestaurateurs. PayChoice softwareeasily keeps all my restaurant clientsacross 44 states compliant withminimum wage laws,” remarks Ralph.

Connie comments, “There's noquestion that Payroll Associates hasprovided us with impeccable softwareand a lot of great service. DrewOrenyo created countless customprograms for us. And we can't sayenough about Online Employer. Thatrepresents our present and our futureand shows our prospective clients thatwe represent the most technologicallyadvanced product out there.”

This story has a happy ending.Twenty-two years ago, Connie andRalph put on their entrepreneurialshoes along with their off-the-shelfApple 2E computer and MAS 90software all nestled in their cozy 600square foot basement. After 10 years,they had 150 clients, five employeesand a 1200 square foot office space.At that point there was no capacity togrow anymore. Their growth explodedwhen they worked smarter not harder.Do you hate it when you can guess theending? Purchasing a PayChoiceLicense was the magic step after 10years of hard work. With their 22ndbusiness anniversary around the cornerin November, they are proud to saythat today, Accu Data Payroll has over1,000 clients in 44 states across thecountry served by 11 loyal employees.Now that's more than a happy ending,that's a beautiful beginning!

Licensee Spotlight A F A M I L Y A F F A I R

PayCard

ALLIANCES

3

The Online 401(k)

One of our newest alliance partners is afully bundled retirement plan providerserving the needs of small and startup401(k) plans. You'll discover immediatelythat the advantage to working with TheOnline 401(k) is their completeunderstanding of the payroll businessmore so than any other 401(k) provider.

BENEFITS TO SERVICE BUREAUS:First year and ongoing revenue share Give prospect info to The Online 401(k)team and they do the selling plus reportback to youThe Online 401(k) works with a nationalnetwork of independent payrollproviders and helps you better competeagainst ADP and PayChex

BENEFITS TO YOUR CLIENTS:Fully integrated solution requiringvirtually no administrative tasks ontheir part after the plan is established Low monthly cost of only $155 forcompanies with 2 to 30 employees,regardless of total assetsNO asset based fees and NO participant feesWide choice of funds or alternatively,you can use a brokerage account

HOW DO I GET STARTED?Getting enrolled with

The Online 401(k) is quickand easy! Go to the supportsite for the participationagreement; sign and return it to Laurie Beppel. Lauriecan also provide you withdates for upcoming trainingsessions. Contact Laurie at856-231-4667 x464 orlaurie.beppel@payrollassociates.com.For more information on servicesoffered by The Online 401(k), pleasecontact Tom Zgainer, Vice President of Sales, at 866-775-4015 or tzgainer@theonline401k.com.

Alliance Payment Technologies

Introducing Alliance PaymentTechnologies, another ACH servicescompany joining Payroll Associatesalliance network. The technologydivision licenses to and supports itsAlliance ACH® Transaction ProcessingPlatform for financial institutions andother payment processors; the processingdivision processes for thousands of directoriginators including hundreds of Fortune500 companies.

Here are a few reasons why hundreds ofpayroll providers have chosen Alliance:

Real-time control of transactions, evenas they are transmitted to the FedLate processing hoursReal-time return notifications Reporting and reconciliation (by clientand consolidated)Excellent service and supportPayroll specific risk managementcapabilities (patent pending)Automation capabilitiesFor more information, contact

Russell Ward, of Alliance ACH in hisoffice: 417-742-7451, cell: 417-234-1710 or visit the web page: www.ach-processing-solutions.com.

Capital One Program

To help licensees make the most out ofthe Payroll Associates and Capital OnePaycheck Debit Card program, wehosted several training sessions. OurCapital One representatives led thediscussion with an overview of theprogram, details on card fees and limits,how to sign up for and use the cards aswell as how to best market this programto your clients.

Make sure you stop by the Capital Onetable at the Users' Conference VendorFair on Thursday, Oct. 4. To receive aparticipation agreement, please contactMary Fertig at 856-231-4667 x469 ormary.fertig@payrollassociates.com.

Alliance Scoop Alliance Scoop

Print Management Partners

Print Management Partners works directly with our clients to provide highquality and cost-conscious payroll tools. Whether you need check stock,envelopes, tax forms or high-end marketing materials, Print ManagementPartners has the solution. As part of the PayChoice Alliance Program, youbenefit from our combined buying power to ensure you get the best prices.All items are provided with superior service and same day shipping of stockitems—available at no extra charge!

Their most recent offering to the community is an efficient Feder-ALL 6in 1 poster. Licensees have a chance to promote their company name and logo to all theirclients while also satisfying all the six major posting requirements: Minimum Wage, FamilyMedical leave Act, OSHA, Equal Employment Opportunity, Employee Polygraph ProtectionAct and USERRA. These high quality posters are available in multiple print options at great

prices. What an easy way to have your business name displayed at your client'slocation, at the very least, until the next minimum wage change in 2010. Contact

Mike Ryan of Print Management Partners at 800-545-0792 orstop by their table at the Vendor Fair during the Users Conference.

ENCORE updateWe continue to process live payrolls for 200

clients at our Philly branch of PayChoice. To date,Encore has been rolled out to five independent,privately-owned licensee locations with additionalbeta sites in queue by the end of 2007.

Another big first for ENCORE…we've successfully completed the firstquarter-end processing for 78 clients, which includes all forms andpayments! Additionally, ENCORE Online, the web version of ENCORE,began processing at the PayChoice Philadelphia branch on June 1. Bythe start of fourth quarter 2007, we expect to rollout ENCORE Online tobeta users for testing andfeedback. Lastly, FrontRow, thesuccessor to ViewChoice, is nowlive. Information will be availableshortly with regards to a full rollout.

A sincere thanks to our beta testers for all their valuable feedback.As you know, this is a critical step and generally not void of headaches!But every single piece of feedback strengthens the whole. It fuels ourtireless transition team to streamline procedures and make processenhancements that in the end, benefits the entire community.

4

United We StandThanks in large part to the outstanding

efforts of our employees, PayrollAssociates was named to Deloitte'sprestigious Technology Fast 50 Programfor New Jersey, a ranking of the 50 fastestgrowing technology, media, telecommuni-cations and life sciences companies. Deloitte &Touche USA LLP, is one of the nation's leadingprofessional services organizations. This particular ranking is basedon the percentage revenue growth over five years from 2002-2006.

To qualify for the Technology Fast 50, a company profile mustinclude the following:

Operating revenues of at least $50,000 (2002) and $5,000,000 (2006) Headquarters in North AmericaOwn proprietary technology or proprietary intellectual property thatcontributes to a significant portion of the company's operatingrevenues; or, devotes a significant proportion of revenues to theresearch and development of technology

Payroll Associates' revenue growth for the period of 2002 through2006 was 396 percent, yielding us a 35th ranking in the TechnologyFast 50 for New Jersey. Without doubt, the combined growth of bothPayroll Associates and PayChoice drove our numbers.

This ranking is a compliment to every employee and acknowledgescompany-wide efforts in a big way. We are proud of our staff andthank you one and all for your contributions and hard work. Unitedwe stand in reaching this elite status—together we will remain asuccess story!

On October 3-6, 2007, GET READY TORide the Wave of Payroll Success

at the

14th Annual Users Conference Seaview Resort by Marriott in Galloway, NJ…

just minutes from Atlantic City!

Ride the wave and then make a splash into the busiestselling time of the payroll year! This Users Conference willinvigorate and encourage you with fabulous ideas to growyour business. And what better chance do you get to networkwith so many PAI Licensees and vendors for three wholedays? Check out the agenda…

NEW to the Scheduled Sessions: Advanced Training I: special guest presenter, Mark Clason Advanced Training II: includes a look at the top 10 supportissues Year End & E-file: key steps to prepare for year-end andlatest update on 941 E-fileOnline Products: a look at new features and benefits aswell as troubleshooting online payroll and HR

OTHER Sessions include:EasyChoice Time & Attendance/HRThree levels of ENCORE: overview & transition planning;application & transition training; and the next stage inapplication & transition trainingAlliance productsCPA strategiesBackup & recovery Marketing ancillary productsMarketing your business

Roundtable Discussions:Operations - Best PracticesSales & MarketingHow to accelerate growth

It's not too late to register! Contact Mary Fertig at 856-231-4667 x469 or mary.fertig@payrollassociates.com.Don't miss out on these incredible opportunities to learnand earn!

DON'T MISS

Dennis Pate!

Learn the Top Line Tactics

for Sales Training

For news and updates on what's new with the payroll processing divisionof the PAI Group, PayChoice, please click on www.paychoice.com.

www.payrollassociates.com ©2007, Payroll Associates, LLC

The ENCORE Edge is a free publication authored and distributed by PAI Group, the parent company of Payroll Associates,LLC and PayChoice. To update your contact information or unsubscribe, email mary.fertig@payrollassociates.com.

5

Meet the Team New to Payroll Associates but certainly not new to technology…we're positively thrilled that

Ryan Peters and Michael Catto joined the ENCORE Development Team! While the majority of thearchitecture is complete for ENCORE, Ryan and Michael are adding the finishing touches to make thesoftware useable for every aspect of payroll. Payroll Associates is committed to making ENCOREabove and beyond your wildest expectations. Bringing Ryan and Michael aboard to fill two brand-new positions is evidence of our desire to move forward rigorously yet meticulously. Whetherworking solo on some features or white boarding and analyzing along with the other ENCOREdevelopers in the “war room”, this is one happening team!

God Bless Our Troops

Val Lopez, one of ourENCORE Developers,

returned to activemilitary service thispast summer. His

dedication and serviceto our country makesus all proud and we

pray for the quick andsafe return of Val and

all our troops.

WitbitzWitbitzOur American values are not

luxuries but necessities, not thesalt in our bread, but the breaditself. Our common vision of a

free and just society is ourgreatest source ofcohesion at home

and strength abroad,greater than the bounty

of our material blessings.— Jimmy Carter

Ryan Peters startedwith us nearly 6 monthsago and has quickly madea difference as SeniorDeveloper. He waspreviously employed withACE INA, a multinationalinsurance company with

approximately 10,000 employees. He worked asthe company's Enterprise Web Lead, withresponsibilities that included software design,architecture, consulting, project management,and on-shore and off-shore vendor management.He led development of the 20-language strongweb content platform which hosts approximately100 multilingual websites in 50 countries forACE INA. His passion for cutting-edgetechnologies attracted him to Payroll Associateswhere he continues to use all the latesttechnology to help crank out new functionalitiesfor ENCORE. Ryan shares, “I absolutely love myjob. I have such a sense of pride knowing thatENCORE is going to make a huge difference andthat each step forward is very meaningful to thecommunity.”

Michael Catto is aveteran IT guy with 20years experiencedeveloping andprogramming using thelatest and greatesttechnologies includingreal-time satellite

systems, Object-oriented design, N-tierdistributed systems, and of course .Net. Michaelhas worked equal time at Lockheed Martin andthe Law School Council developing anddesigning software. As .Net Developer, Michaelwill work with the team to add all the bells andwhistles to ENCORE; he joined the team severalmonths ago. Most recently he worked on PayrollMessaging and Workers Comp additions.Michael thrives on the fast-paced nature of hisjob and an environment void of bureaucracy,precisely Payroll Associates. He comments,“There is tremendous growth potential for thecompany as ENCORE becomes the best payrollsoftware in the country. It will be great to seeENCORE become a market leader and know thatI was integral to its development.”

Ryan Peters Michael Catto

New Emails Correspond with New URL

Effective immediately, the software division ofPayroll Associates changed the email addresses of theiremployees. The name of all email addresses willremain the same; however each address now ends withPAYROLLASSOCIATES.COM instead of paychoice.com.

In the last issue of the Encore Edge, we announcedthat our new, updated website is now live atwww.payrollassociates.com! Check it out!