Large automated payroll companies, which predate the Internet, have spent years convincing accountants that offering payroll services is too risky and low margin for them to handle, because for them it would be a tedious, manual process. It has also simply been too costly. This is not so anymore.
Accountants have gained the power to automate payroll for their small business clients, and because a company’s taxes are intertwined with its payroll obligations, it only makes sense for accountants to manage payroll for their clients as well. Offering an expanded portfolio of services brings in new revenue streams for accounting firms.
Here are a few of the most important features to keep in mind when evaluating how to turn payroll into a profitable service:
Providing payroll services not only generates more revenue, but it gives an accountant a more holistic and clear picture of a client’s financial standing. Accountants are typically the first people a company calls when they discover a financial discrepancy, especially within payroll.
As with offering any new service, ensuring that the firm gets paid for offering that service is paramount.
Discuss with the client upfront what they are going to be charged per payroll. Accountants handling their finances typically know where the company stands. Using this knowledge to create a mutually agreeable payment schedule and base fee is an easy way to ensure payments are seamless and on time. Developing a recurring, automatic ACH debit can help clients avoid late fees and complications.
When it comes to finding the right software to offer payroll services, accountants should critically consider cloud-based systems that sync with the other technology they are currently using at their practices.
Automated for Efficiency
In order to avoid spending time on data entry, look for a fully automated solution that has the ability to file forms electronically. Payroll programs that automatically submit tax forms and payments, and facilitate batch processing are ideal. Success in payroll is dependent on eliminating manual work at every step.
An important aspect of working with automated payroll software is ensuring the automatic attributes are compatible with all 50 states and localities. With 82 percent of US workers using direct deposit, the payroll system needs to include that service for small business clients. Also, as small business owners are increasingly interested in offering 401(k) to their employees, ensure that the system accounts for retirement contributions and eases their worries about retirement benefits.
Instead of an accountant having to manually respond to each payroll request from a client’s employees, a payroll solution with an employee portal enables workers to log in and access the materials themselves. They can revise their profiles, edit their withholdings, review their pay stubs, and access their W-2 forms.
Flexibility to Accommodate Different Clients
Given the speed of today’s business world, being fully accessible and available on mobile anytime, from anywhere is necessary for collaborative payroll systems. That said, not all clients may understand or want to handle every piece of the process.
Because each client has a different understanding of payroll and accounting, it’s important to look for a program that gives options to tailor client controls. This means many payroll mistakes can be avoided by granting each client different access to areas they’re comfortable with.
As the accounting industry continues to advance, accountants who provide complete services have a competitive edge. Whether it’s payroll, bookkeeping, or taxes, clients are often happy to hand it all over to their trusted accountant.
For many accountants today, adding live payroll to their portfolio is the clearest way to generate more profits from existing clients without having to add more staff.