Most accounting firms are not a great fan of payroll processes. That is why they stick to bookkeeping. One of the major reasons why this is the case is because of the constantly changing regulations. For small accounting firms, the process of keeping up gets tiring, time-consuming, and error-prone. But times have changed, and so have the processes and solutions.
Over the past few years, the payroll industry has undergone several changes. They have adopted cloud-based software and solutions that help transform the loss-making service into a profitable one. The new software is faster and saves the amount of time that was lost in manual functioning. Although many small firms have started integrating payroll services as a profitable add-on, it is hardly a cakewalk.
At both state and federal levels, the government regulations have continued to change. This makes it complex for business owners to stay on par with them and that is why they are in dire need of an accounting firm that can handle it all for them. This not only helps them avoid payroll mistakes and penalties but also relieves them from the stress of abiding by the complexities.
Besides, in the aftermath of the pandemic, there has been a visible disruption in the country's economic structure. According to the US Census Bureau, in the year 2022, a whopping 4.3 million new businesses were launched. As businesses continue to grow, the payroll industry with their customer base grows as well. As the number of employees changes, leading to complicated payroll processes, more and more business leaders seek respite from industry experts.
When it comes to the “why”, the reasons are more than what meets the eye. Here’s why as a leader of a small CPA firm, you might want to consider providing payroll services to the clients:
Profit: With the advent of cloud-based payroll processes and software, payroll is no longer a long, strenuous job. With the right strategy and partnership, you can provide your clients with the services they are looking for.
Value addition for clients: Most clients look for service providers who bring it all under one roof. As you expand your services and add payroll, you become the one single destination that your clients are looking for.
Revenue generation: When you add payroll as a service offering for your clients, you open an avenue for additional income. This especially helps when you are dealing with clients who have stayed with you for a long time.
Advisory offering: Businesses seldom treat their accounting partners as merely an entity for these services. They look up to the firms to improve their businesses. That is why, most often they seek advice on financial matters. By introducing additional services, accounting firms can enhance their relationships and business.
Gaining mastery of a niche: As an accounting firm, you can provide payroll services to some specific sector. Besides the revenue factor, you also become a master of the sector.
Building the firm’s value: When you steer away from a regular accounting practice, clients trust you as a firm. After you have proven your worth, they start believing in your caliber, and you end up building value for your firm.
As an accounting firm, if you think that you have to end up spending a lot to secure all the things needed to provide payroll, you could not be wrong. Here are some of the top things you should look for in payroll software:
Accounting software with payroll: One of the primary things that you should be looking for is accounting software that includes payroll. An all-in-one application eliminates the chances of duplicate data entry and ensures that the general ledge comprises the most recent activity. It might take a while to figure this out, but if you find the one, it will change the way you operate.
Options for integration: Most often you will end up buying accounting software and payroll software from two different entities. This is no longer a problem because of the amount of integration that is allowed on the software. It is important to note that integration syncs with the accounting software so that the payroll information is auto-inserted. It is different from import/export options.
Tax Reporting and Remittance: These are some of the top reasons why businesses seek payroll services. Small business leaders must note that they have to perform several roles at the same time. Preparing these reports and paying taxes can stress out an already overworked business owner. That is where a small accounting firm comes into play.
Before investing time and money in a payroll provider, clients make sure to conduct a thorough analysis. As you enter the market of payroll, it is essential to know what it is that clients are looking for:
Reliability: The first thing they look for is a reliable partner. Payroll is critical in business, and they need assurance. If clients face a problem, it reflects badly on the payroll provider. They look for user experiences in every form. It might be word-of-mouth testimonials, reviews, or a mix of everything. Your client might want to meet you to analyze the depth of the reviews (both good and bad). They choose after multiple background checks.
Software features: It might be incorrect to think that clients do not check on the technicalities, because they do. Some of the top features that they usually look for when considering a partner are:
Calculations:
Functions:
Costs: For clients, costs can make or break a deal with a partner. Firms must provide special offers, discounted prices, bonuses, rewards, and perks. The bigger the offering, the more clients will be attracted by it.
The service offering might appear to be the same. Since you will aim to merge accounting with payroll, it is important to conduct a thorough analysis of the software. Here are some of the top software that you can choose from:
If you are considering adding payroll to your list of services, you might want to choose an application that processes it all with minimal work. Mastering payroll as a service isn’t as easy as it might appear. Gaining your hands on payroll expansion requires an approach that encompasses technological integration, compliance management, and effective communication. Understand the dynamics associated with payroll wisely, navigate compliance challenges, and integrate payroll seamlessly into your list of expertise.
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Have more questions about payroll expansion or outsourced payroll services in general? Write to us at connect@finsmartaccounting.com