By Julie Lubetkin
What if you could invest several-hours of your time per month and add year-round income that generates 45% of additional business revenue? What add-on service could offer this attractive proposition? Online client payroll.
Offering payroll is not a gamble. Small businesses, that trust you to do their taxes or bookkeeping, are likely to feel comfortable allowing you to do their payroll as well. As you are probably aware, business owners generally go to their accountants first when they have any sort of finance related questions. They expect that their accountant will know how to advise and handle just about every financial matter they have, with payroll being no exception.
Fortunately, client payroll is now a low risk, high reward venture using web-based payroll services that turn tedious, paper-based tasks into quick electronic processes. Instead of printing and mailing paychecks, an accountant can provide direct deposit to his clients. Tax payments and forms can be transmitted as opposed to being printed, signed, and mailed. Employee hours may be entered by clients directly into their payroll accounts- over the web- instead of calling in hours to their accountant to enter. Such conveniences provided by online payroll services, make it possible even for sole practioners to offer payroll to large numbers of clients for considerable profit.
For Phil Christensen, a CPA with no employees, offering payroll has generated over $54,000 annually for his small accounting practice. His profit margin is 80%. Christensen takes advantage of all of the opportunities that his paryoll software, provides for eliminating paperwork and sharing payroll tasks with clients over the Internet. For example, Phil puts all of his clients’ employees on direct deposit. The service is included at no additional charge and by using this service option, Phil does not have to print and mail paychecks. He also provides his clients access to a special version of the his payroll service's website for clients so clients can enter their own employees’ hours. The training he provides to clients for entering payday information, approving their own direct deposits, remitting their own taxes and filing forms electronically only takes him 40 minutes per client. After that, clients are more or less on their own with Phil serving as their paid advisor. As a result of the client self-service option, Phil is able to handle payroll for 68 clients by himself.
Look Big and Stay Small
Like Christensen, David Awe, CPA, was interested in incorporating payroll services into his practice. However, David’s requirement was that if he was going to offer payroll, it had better not be a lot of work. He had no interest in mailing 941’s, writing checks, and going to the bank. He needed a payroll system that was substantially automated, reasonably priced, and flexible enough to share payroll tasks with his clients.
For Awe, online payroll has allowed him to successfully grow his business to include clients located out of state. The fact that the payroll software is Internet-based makes offering payroll for out-of-state clients possible. David doesn’t even need to see his clients since almost every step of the payroll process can be handled electronically with little client interaction. To date, he manages 61 payroll clients, 60% of which are out-of-state clients. Awe credits the flexibility of the online service aspect of the payroll service he uses, for generating well over $39,000 to his small business revenue, with very little additional workload. He has been able to spend more time with his young children while gaining a higher financial return for his efforts.
The fact that online payroll can be run from anywhere with Internet access works extremely well for most small firms and the owners of those firms. Three years ago, while on a two-week vacation in Africa, Awe completed a payroll in a cybercafé. Online service providers make physical location mostly irrelevant, provided an Internet connection is available. For instance, one proprietor was known to run a payroll using an iPhone from a parking lot while out of town, following his son’s traveling baseball team.
The Changing CPA Services Mix
Do you need to be a payroll expert yourself to be a payroll provider? A recent PayCycle survey revealed that over 35% of the accountants now using the PayCycle service had no previous client payroll experience. Recognizing that accounting professionals may have limited payroll experience, online payroll companies are adding features and benefits that make it easy to get started. Many payroll services set up process for accountants is a step-by-step, self-guided procedure. If the accountant ever has any questions during set up or running client payroll, they can usually call a toll-free number and speak to a payroll expert at no cost. Marketing tools, including flash demos and presentations are available to help accountants explain and promote their payroll practices.
So, what if you, like Christensen and Awe, would invest a few hours a month on online payroll tasks and the return would equate to thousands of dollars a year? Small businesses need payroll services. Online payroll services means that you are not stuck in your office. You can take a vacation and run payroll from anywhere in the world provided you had an Internet connection. A quick Google search will return a list of several different payroll services designed for accountants and small businesses, here are a few popular services:
http://www.paycycle.com
http://accounting.paychex.com/
http://www.smallbusiness.adp.com/accountants/products.asp
http://proadvisor.intuit.com/commerce/catalog/fragments/payroll-software-and-services.jhtml
The case studies discussed in this article all used PayCycle http://www.paycycle.com which made their success easy, profitable and the furthest thing from a gamble.