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Payroll: In-house or outsource?

Jul 13th 2015
Head of Insight AccountingWEB
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Payroll options for practitioners: in-house or outsource?
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Payroll for practitioners: in-house or outsource?

As part of a continuing series of guides examining the role payroll services play within accountancy firms, John Stokdyk recaps a long-running debate.

Of all the main responses to providing payroll services, the most common choice is to bring the operation in-house. Even financially savvy business people are often allergic to payroll and many practitioners see it as a natural extension of handling all their clients' tax needs. The in-house route also gives practitioners assurance that the task is in competent hands.

But many practitioners share the aversion to hands-on payroll work. Payroll can be complex to set up and run, and low margins mean you need a lot of clients to make it profitable. Yet the impacts of mistakes or missed deadlines can be considerable. Clients and their employees, meanwhile, will still expect your firm to go the extra mile on their behalf.

“I want nothing to do with payroll, but I want to offer it,” says McAllen, TX-based practitioner Randy Crews CPA . “If any client had a question or an issue, the answer was, ‘Go talk to Randy'. I was constantly tethered to my desk.”

The solution for Crews and many other accounting firms is to work in partnership with web-based payroll service providers such as myPay Solutions. Referring clients to a trusted third party ensures their payroll needs are taken care of, while giving practitioners the space to focus on their priorities.

Having access to pay information online keeps accountants involved in the process and allows them to be more proactive in the way they use the data. For example, Landis & Associates in Lancaster, PA continues to send out a cash requirement report to clients using myPay Solutions payroll a couple of days before payroll is due. The reminder helps the process runs smoothly and that ensures that client businesses have the funds in place to cover their pay runs.

Whichever way you decide to do payroll for clients, the same basic rule applies: Employees who are not paid are not very happy, so your job is to find a solution to keep them happy.

Download the guideThis article is based on the first guide in a series produced by AccountingWEB.com in association with myPay Solutions.For more helpful advice from fellow professional and a checklist of payroll dos and don'ts, download the myPay Solutions-sponsored payroll services guide.

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