Vendor Spotlight: Gusto

By Chris Gaetano August 30, 2023, 9:02 a.m. EDT 11 Min Read

Navigating the complexities of payroll, benefits and HR is often a cumbersome task for small and medium-sized businesses. Gusto aims to simplify these processes by serving as an all-in-one platform for payroll, benefits and HR management. The company collaborates with accounting firms to offer tools and advisory resources, with a focus on helping accountants add value to the SMBs they serve.

Founded in 2012 as ZenPayroll, the San Francisco-based company has expanded its focus over the years from payroll services to a more comprehensive suite of HR solutions. It now includes a variety of services like Gusto Partner Program, Gusto Pro, People Analytics, People Advisory, Gusto Academy and Gusto Tax Credit Service. These offerings are tailored to help accountants manage their clients efficiently and to enable them to provide a wide range of services. Like many companies, Gusto is also experimenting with generative AI to streamline data preparation tasks.

Gusto chief ambassador Will Lopez discussed the challenges of tech fatigue among accountants, the integration of generative AI in their services, and the need for leadership focus among accounting professionals.

Will Lopez, Gusto chief ambassador

How would you best describe what your company does?

Lopez: For many small and medium-sized businesses, setting up payroll, benefits and HR are essential but complicated — causing headaches, time wasted and unnecessary costs.

That's where Gusto comes in. Gusto serves more than 300,000 businesses nationwide. Each year we process tens of billions of dollars of payroll and provide employee benefits — like health insurance and 401(k) accounts — while helping companies create incredible places to work.

But we're not doing this alone. We work closely with accounting partners who support these businesses with the financial and people advice they need to succeed. Our goal is to build the tools, advisory resources and third-party integrations accountants need to serve our mutual customers and to efficiently run and grow their own firms.

Our deep investment and commitment to the accounting profession has been growing tremendously. In 2017, we had less than 3,000 accounting firm relationships, and now Gusto has over 14,000. And there is incredible opportunity for the firms that work with us — two-thirds of our customers work with an accountant, and we now have five times as many shared customers today as we did in 2017.

By building tools and resources for our partners, our goal is to help accountants bring more value to the SMBs they serve — and ultimately grow their own firm revenues. When our accounting partners succeed, their clients succeed, and if their clients are successful, the teams and the communities around them grow.

What is in your product line, and what is your flagship product?

Lopez: Gusto has long been more than just payroll. Gusto helps growing businesses onboard, pay, insure and support their hardworking teams with payroll, benefits and more.

We know people are what make businesses successful. It's why we built Gusto to be a People Platform — providing accountants with a tech stack enabled by first-party software, third-party software integrations, a full suite of employee benefits and services that add more value to more clients over time.

For accountants, the key products we offer include:

Gusto Partner Program - As a Gusto partner, accountants get rewards like dedicated support, free payroll for their firm, revenue share and perks to pass along to their clients. The more accountants grow, the more they get.

Gusto Pro – Our dashboard for pros which is unique to each accountant, enabling them to track and manage all of their clients in one place. Gusto Pro enables accountants to work faster and provide more valuable client insights with quick access to payroll, financial data, People Analytics and more.

People Analytics – People Analytics is a suite of tools inside Gusto Pro providing actionable data on clients' businesses to drive powerful, people-focused recommendations. By accessing People Analytics through Gusto Pro, accountants will now have at their fingertips:
An at-a-glance view of key client people metrics like team growth rate, total payroll cost, payroll cost per employee and benefits cost per employee.
Compensation benchmarking using anonymized data from the 300,000+ businesses on the Gusto platform, allowing accountants to confidently recommend compensation for roles based on industry, experience, and geographic location — especially critical for remote or hybrid roles.
Financial insights on key client business metrics like revenue, expenses and profit via QuickBooks Online integration (with others following soon).

People Advisory – Accountants are uniquely positioned at the heart of their clients' finances and people needs. By pairing their financial expertise with people operations, accountants can guide their clients with advice on payroll, benefits and people operations. This helps clients attract and retain top talent while building great places to work — and for accountants, it points to new paths for revenue growth and career development for their own firms.

Gusto Academy – Whether accountants want to get certified on payroll or People Advisory, take an elective, or dive deep on a specific topic, Gusto Academy provides education for every stage of their career. Accountants can go from knowing more about the fundamentals of payroll to launching a full-scope People Advisory Service (PAS) practice. The more courses they take, the more CPE credits, badges and knowledge they'll gain.

Gusto Tax Credit Service – For accountants looking to maximize their clients' tax benefits to improve cash flow, Gusto's Tax Credit Service makes the whole process accessible and easy for everyone involved. Accountants can partner with Gusto to help clients access tax savings with automated software built right into payroll. We leverage data we have on hand to proactively notify you when clients may be eligible. Our AI-powered product streamlines the applications before our tax experts review them — making the whole process easier, faster and more secure for accountants and their clients.

What product of yours do you think should be better known among accountants?

Lopez: I'm deeply committed to People Advisory. It's what's next for payroll. It's an incredibly exciting offering that feels like a no-brainer. As a former accounting firm owner myself, it feels inevitable the next evolution of accounting and payroll will include people-focused advice and operations.

Accountants have a unique, long-vested position — they're already trusted financial advisors to their clients. They also have deep visibility into their clients' finances and always get questions from clients like, "Can I afford to hire another position? How much should I be paying for this role? And what kind of benefits can I afford to offer my staff to retain them?"

The next step is for accountants to proactively offer guidance to their clients around these questions, and to be able to unlock more value for them than ever. The results on bottom-line revenues can be enormous.

Gusto has expanded its partnership with Ignition and Reach Reporting to help bolster ecosystem solutions for those offering People Advisory Service. One of our accounting partners, Lighthouse Accounting Group, has told us they've increased firm revenues by 280% year-over-year thanks to providing People Advisory services to their clients. And I think this is just the beginning.

What was the last big initiative or project your company completed?

Lopez: The last quarter at Gusto has been incredibly exciting. We recently announced Gusto Global — our new employer of record service powered by Remote.

Navigating regulatory and tax requirements country by country can be incredibly challenging for SMBs. Gusto Global will enable them to quickly hire, pay and manage international employees on the Gusto platform — without cutting corners on compliance. It will also enable them to take care of their international employees with health insurance and retirement benefits. This is going to be a gamechanger for SMBs seeking to unlock more talent around the world, as well as for the accountants supporting them.

What is the most exciting new thing you're working on?

Lopez: Accountants are getting a million client questions on how the evolution of generative AI will affect their firms and the services they can provide them. We believe tech like this will be an incredible enabler — but never a replacement — for how accountants service their clients. There is a huge opportunity ahead.

At Gusto we're focused on leveraging generative AI to solve real partner and customer problems while keeping "humans in the loop." For most accountants and their clients? Their biggest needs are saving time and money — so that's where we're getting laser-focused.

We recently shared we're building a new tool that will save on hours of manual data prep — a headache and frustration for so many of the accountants I've spoken with. We know accountants struggle with complex payrolls for hourly employees in industries like restaurants and retail, often taking up valuable time that could otherwise be spent growing their firms.

We are looking at ways of improving payroll data imports into Gusto. Our goal is to enable Gusto partners to automatically drop spreadsheets into Gusto Pro in any format. AI-driven import experiences will be able to take unstructured or messy data and determine how to map the data to Gusto automatically. As an example, it will be able to match up employees listed by nickname with the right employee in Gusto listed by their legal name, or correctly assign a reimbursable expense listed separately as a note in the spreadsheet.

This will empower accountants to focus efforts on more meaningful, higher-value work vital to clients' success — for example, providing proactive advice on their finances, or guidance on how they could grow their own teams and retain their best people.

We're also building a number of new features designed to help both accountants and SMBs save their time and money. In a blog post by our new chief data officer, Jeremy Welland, we shared about our focus on leveraging AI to prevent and resolve tax notices faster, to enable accountants and SMBs to build customized reports, and to help more accountants and SMBs quickly generate job postings.

There's a lot of buzz about the potential of generative AI. We want to ensure we're there at every step of the way to help put AI down the right path, and that we're helping accountants and SMBs solve real-world problems by harnessing it.

What differentiates your company from others similar to it? What makes you different? Unique, even?

Lopez: Unlike other companies offering payroll to businesses, we're squarely focused on supporting the needs of small and midsized businesses — especially those that are high-growth and scaling. Our goal is to be the People Platform giving these businesses everything they need to take care of their teams — not just payroll, but also benefits and HR tools. We also offer features like our R&D Tax Credit Services, designed to help SMBs find tax savings for innovative activities they're already doing day-to-day.

We partner closely with our accountants to serve SMBs, our mutual customers and the backbone of our economy. That's why we've developed features like People Advisory — a unique offering designed to help accountants deliver financial and people-focused guidance to their clients while driving forward the evolution of the accounting profession.

What is the biggest tech challenge facing accountants today?

Lopez: New research from Gusto economists recently revealed three-quarters of accountants are experiencing fatigue associated with all the tech apps they are using to run their firms and serve their clients. In addition, nearly a third of accountants are concerned that struggling with tech and all of the apps they use actually risked taking time and attention away from client interaction.

Tech is supposed to enable accountants to be more efficient and scale their firms while freeing them up to spend more time on high-value work for their clients. That's why we're helping accountants build the right tech stack for their needs — giving them access to both first-party software and third-party integrations that will help them strengthen client relationships while running their firms more efficiently.

If your company has been experimenting with generative AI, how have you incorporated it into your business?

Lopez: As I shared earlier, we're leveraging generative AI to actually solve real-world problems for accountants and SMBs. Our focus is harnessing AI to help them save time and money.

But I think it's important to note accountants have a vital role to play, even with the advent of generative AI. Generative AI won't abstract away the critical work accountants do every day to support SMBs, but what it can do is remove a lot of the manual, frustrating tasks accountants are often stuck with today. That will free up accountants to do higher value work that clients value — like advising them proactively on their finances and people needs.

If you could telepathically transmit one (non-marketing or sales) sentence into the head of every accountant in the world, what would that sentence be?

Prioritize your leadership — find the time to work ON your firm, not just in it. Day-to-day client work is important, but set aside time to grow your firm for the long term.