[IMGCAP(1)]Offering payroll services for your clients is an easy way to create new profitable revenue streams for your accounting practice. But what are the most important features to look for when evaluating payroll software? And how can you ensure providing payroll will bring in more income?
Payroll is evolving
Payroll processing has been available as an automated service since before the Internet. Large payroll companies have traditionally dominated the processing and distribution of paychecks, taking away the opportunity for small and medium-sized accounting firms to make money by offering this service. Moreover, large payroll companies have expended significant energy convincing accountants that offering payroll services is too low-margin for such a high-touch, manual process.
But the payroll landscape has changed dramatically over the past decade, thanks to the introduction of robust, affordable cloud-based payroll solutions. With the power to automate, offering payroll services can and will be profitable for your accounting firm. And since payroll is so highly intertwined with clients’ overall expenses and tax liability, it is a natural fit for accountants to also manage this function for their clients.
Offering payroll services offers more benefits to accountants than just the prospect of generating more revenue. It is important for accountants to have a clear understanding of what is going on with their client’s payroll because when any financial error occurs at a company, especially within payroll, the first person the company calls is their accountant.
What to look for
In order to effectively offer payroll services to your clients, what should you be looking for in a new program?
- For starters, the system must be in the cloud for easy accessibility. Make sure you look for a true cloud-based system that can run on any device and be accessible from anywhere with internet access. The ideal application should not have any install process, nor leave a footprint on your computing device.
- The service must be fully automated. The system should have the ability to file forms electronically. This includes any jurisdiction that accepts the payroll forms to be electronically filed and payments to be received / processed electronically. If you are not sure about a particular jurisdiction’s requirements, you can go to their website for a quick check.
- Tax forms should be available at the click of a button. Make sure the system has a batch component for easy processing. Ensure that the system accounts for retirement contributions.
- Every payroll system will offer direct deposit, but it is also important for your payroll offering to have an employee portal so your client’s employees can easily look at their profiles and edit certain fields such as address, see their paystubs, and access their W2 forms.
- Systems should also be fully accessible on mobile devices. Given the speed of today’s business world, being able to approve payroll on a mobile device anytime from anywhere is critical.
- Client workflows should be flexible. Depending on the sophistication level of your client, levels of control can be shared to ensure that as an accountant, you’re receiving the right level of information input from their side.
Profitability for you, the accountant
When offering a new service, it is important to make sure you are able to get paid easily. Nothing sours a relationship like a delayed payment or invoice. A best practice is to discuss with the client upfront what they are going to be charged per payroll. You are at an advantage as the accountant because you have a clear understanding of the company’s finances from doing their accounting work. Use your access to your advantage by creating a mutually agreeable fee structure. An ideal system will enable you to create an automatic ACH debit that goes into your account to ensure your compensation is delivered easily and on time.
Offering a new service can be intimidating for both the accountant and the client. Change may be met with resistance, but it will ultimately deepen your relationship with your clients. Always remember that for a small business, their accountant is their most trusted advisor. Clients entrust you to handle their finances, so who better to trust with their payroll needs as well?
Chandra Bhansali is cofounder and CEO of AccountantsWorld.
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