Payroll can be a profitable sideline for accountants, but it can also entail risks, including phony payroll bureaus.

An interesting panel discussion ensued at the Thomson Reuters Tax & Accounting user conference this afternoon when several accountants talked about their experiences in offering payroll to clients. One of them discovered that the payroll bureau they were using was fake and embezzled about $45,000 from them, along with other businesses around the country. The owner of the fake payroll bureau is now facing charges, and the accounting firm’s lawyer is dealing with the aftermath.

Other accountants talked about the need to make a commitment to payroll, and how they manage to hold onto some fairly demanding clients. They told moderator Greg LaFollette of about how some clients refused to enter payroll information themselves, but would instead phone or fax it in. In some cases, the firm had to buy about a dozen fax machines for clients who complained they didn’t have a fax machine of their own. Another client, a restaurant, said they didn’t have a phone that could make long-distance calls because employees might use it to make personal calls. So the firm had to set up an 800 number that the restaurant owner could use to fax in the payroll information.

Thomson Reuters has been offering payroll services with its myPay system and now with its newly introduced Accounting CS system. It will be competing with payroll giants like ADP and Paychex, along with Intuit, whose acquisition of PayCycle is prompting it to market inexpensive payroll services via outlets like Costco for as little as $4 a week. But Thomson Reuters is aiming to convince accountants that payroll can be profitable and less of a hassle. Apparently it can be that, but it still requires careful vigilance.