What adding payroll can do for your practice
The world of accounting has traditionally been focused on bookkeeping and tax prep. However, as businesses and technologies continue to evolve, accountants and bookkeepers are in a great position to offer their clients a wider range of services. Specifically, our recent survey found that there’s high demand from small businesses for accountants to handle their payroll.
Let’s take a look at what adding payroll services can do for your practice.
Why offer payroll services?
Every one of your clients has payroll, but each one may be handling it differently. And if they’re handling it themselves, they may not feel confident about it. Only 43% of business owners feel like they do a good job of paying employees on time, and just 25% are confident that they deduct and submit payroll taxes accurately — and that’s after spending an average of 18 hours each month making sure their staffers get paid. Many small business owners will gladly hand payroll processing to someone they know and trust: their accountant.
Becoming a trusted advisor
Managing payroll offers you the chance to have consistent check-ins with your clients on key aspects of their finances like cash flow and expenses. Our research shows that having these types of regular conversations is a factor when it comes to small business owners viewing their accountant as a trusted advisor. 47% of small businesses who describe their accountant as a trusted advisor said they have contact with them once a month or more. On average, only 39% of all small business owners talk to their accountant that often.
So, what sets those providers apart according to the small business owners we surveyed?
- Trusted advisors are seen as knowing their clients’ businesses better.
- Trusted advisors offer a wider range of services.
Payroll services may be the gateway to both ramping up the confidence between you and your clients as well as adding to your revenue stream. In fact, there are more areas than just payroll that small business owners would like a helping hand with:
Outside of traditional accounting and bookkeeping, payroll is the most sought-after service. More than one in three small business owners want their accountant to help with payroll, and many more might be ready to hand over the reins.
Other benefits of providing payroll services
Wouldn’t everyone like fewer surprises at tax time? If you’re taking a role in running payroll for your clients every two weeks (the most common pay schedule), you’ll be ahead of the game. Good payroll services process all your clients’ payroll tax filings and offer accuracy guarantees to make sure you’ll look good (and never have to lift a finger). Plus, many payroll service providers prepare annual W-2s and 1099s as part of their services, and make supplying the forms to employees and contractors fast and simple.
The more you are involved with a business the better you know it. With the kind of insight into a company that payroll services provide, you’re better able to spot risks before they emerge or even advise on what salary range to offer the next important hire.
Adding payroll to your existing services can be an extension of your successful relationship or the start of a new one. When companies are shopping for an accountant, they tend to see the top benefits of hiring one as more time to focus on their business, saving money, and reducing stress. By offering payroll services, you can hit all three.
Getting started with payroll
Offering payroll services has never been easier. Whether you want to help clients choose the provider or run payroll on their behalf, here are three ways to make payroll part of your business:
Referring Payroll: Do a little digging and find a partner who could help. By doing the research necessary to make informed recommendations to your clients, you’ll be seen as insightful about their businesses and how it functions. Referring clients to a provider keeps you out of the day-to-day involvement and may open up revenue-sharing opportunities.
Monitoring Payroll: Go a step further to keep tabs on clients’ pay runs but leave the day-to-day responsibility of running payroll with them. By choosing a provider with accountant-level permission capabilities and accounting software integrations, you’ll have the ability to help clients keep track of payroll and seamlessly sync payroll expense entries into the books. This method gives you insight into your clients’ payroll and how they run it, but you’ll still be largely hands-off.
Running Payroll: Make payroll one of your standard offerings by running and managing it for your clients. Take advantage of the best payroll providers out there to efficiently run payroll and manage all that comes with it. You’ll become an integral part of your clients’ businesses by getting deeper insights into how they work, and you’ll make bookkeeping simpler.
Offering payroll services to your clients is a win-win proposition: You’ll free them up to focus on running their business while opening a new revenue stream for your firm, simplifying bookkeeping, and reducing errors. While every client has different needs and expectations from you, it’s worth asking how they’re running payroll now and whether it’s something you can take off their hands.
About the authorKatelyn Sullivan leads the partner development team at OnPay, the top-rated payroll software for accounting firms, and their small and mid-sized clients. Prior to joining OnPay, Katelyn spent seven years with Ernst & Young focusing on technology adoption and process improvements for business clients. Katelyn is a licensed CPA who earned her Masters in Accounting at the University of Georgia.