Los Angeles (June 13, 2002) -- Payroll services represent a vast market that accountants are beginning to reclaim after abandoning decades ago, a software industry executive told practitioners at the California Society of CPAs' Accounting & Business Show.

"CPAs used to think payroll was beneath the scope of their capabilities," said Greg LaFollette, product strategy vice president for Creative Solutions Inc,. a vendor of several software applications, including payroll, designed for use by accountants. "But now, they are getting back in this business in big ways."

The small business payroll services market is dominated by the service bureau operations of vendors ADP Inc. and PayChex, but there's plenty of opportunity for CPAs, according to LaFollette. There are 10 million businesses with one to 100 employees -- of which 850,000 get payroll services from ADP or PayChex, and 400,000 get the service from CPAs -- which leaves 8.5 million "up for grabs," he said.

Billings for accountants providing payroll services to small business clients can range from $480 to $1,700 per client per year, LaFollette said. He noted that before joining CSI, he was a partner in a South Dakota CPA firm that abandoned its payroll services business in the mid-1970s.

-- John M. Covaleski

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access