CPAs Find New Profit In Payroll: Online Technology Decreases Work, Increases Revenue
By Jim Heeger
In the past, accountants have shunned client payroll services, and referred clients away to traditional payroll service bureaus. In a survey by Evans Research Associates, 31 percent of public accountants chose “lack of profitability” as the reason for not providing payroll to their clients.
Today, new Internet technologies have changed the practice of payroll, causing many professionals to re-think their attitudes about it. This is good news for small businesses, who want their accountant to handle everything from accounting to taxes to payroll. According to a National Payment Corporation Survey, 90% of small businesses prefer that their accountant handle their payroll.
Professionals are discovering that online payroll can be profitable, thanks to the following advantages:
No Software Barriers
Today’s Internet technologies enable accountants to offer payroll services with no software installation and no ongoing maintenance of tax table rates. The more sophisticated systems are updated in real-time, without your involvement. This can be a true time-saver since you will no longer have to deal with the hassle of updating multiple client files.
Real-time Access Improves Client Collaboration
With traditional software, only one person can access payroll data at one time, making it hard to work with clients. Additionally, the program is either on the accountant’s computer or the client’s, making it impossible to manage payroll tasks remotely.
With online systems, clients and their accountant can now seamlessly collaborate, each viewing and entering data into the same payroll account from different locations. This allows you to check in on clients without getting on the phone, and enables you to minimize errors by reducing the number of hands that touch the data.
Automated Transactions Minimize Routine Work
Instead of spending hours manually calculating after-the-fact payroll, or wasting time printing and mailing physical paychecks, online solutions let you simplify payroll tasks to only a few clicks of the mouse.
The best programs provide step-by-step instructions and walk you through the entire payroll process, from client setup to paycheck calculations, in only a few minutes. In addition, electronic payments and filings to federal and state agencies can make tax time a breeze.
When payroll can be this easy, there’s no reason to avoid this work during the quarter, or to be burdened with heavy, quarter-end paperwork. You’ll save more time and headaches in the long run by preparing live online payroll.
Best-in-class solutions truly leverage the Internet by allowing you to give clients dual access to their data. As a result, clients can log in to do some or all of the work, which will save your firm time and manual data entry work.
Personalized Services Increase Your Brand Equity
Some online solutions allow you to offer payroll services under your firm brand. When clients log in to enter hours or print paychecks, they see your name across the Web site, which reinforces your firm’s value-add.
Flexible Business Models Maximize Your Profit Margin
Along with private branding, online solutions also offer you more control over your pricing strategy. Look for all-inclusive, discounted offerings that are targeted at accountants. By doing this, you can lock in your costs and price your services to maximize profit.
Free Marketing Resources Build Your Practice
A few online payroll providers offer free practice development aids such as customized brochures, client demos and direct mail templates, to help you market your services without spending too much time, or a fortune. These free resources can be extremely helpful in spreading the word to both existing and new clients.
Stronger Client Relationships = Greater Profits
Compared to “do-it-yourself” software programs that are cumbersome to update, or third-party services that can easily cost thousands of dollars, the online approach is revolutionary.
With minimal expense, no training required and just a few minutes needed to do a typical payroll, accountants are discovering that online payroll solutions enable them to provide a valued service for their small business clients, while adding a profitable revenue stream for the firm. Many professionals find that payroll is the “hook” to cross-sell other services, leading to additional profit.
If the advantages of online payroll interest you, here are 10 important questions to ask as you begin your search for the solution that will best fit your firm’s needs:
1. How accessible is customer service? Chances are, no matter how straightforward the service claims to be, there may be a time when you need to talk to a real, live human on the phone. Does the service offer live, phone-based customer support, and how accessible is it? Or, is support only offered via email or worst of all, is no customer support offered? And, is customer service free or are there fees associated?
2. Are there “hidden” fees? Most online services are offered on a monthly subscription basis. However, before making your final selection, you should compare ALL of the fees involved with a particular service. For instance, are there extra costs associated with the direct deposit of employee paychecks, the electronic filing of federal and state employment taxes, or customer service by phone or email?
3. Are there “credibility markers” available for this service? Has the service won awards from reputable testing organizations and industry publications? These awards serve to mark credibility for the service and ensure that an objective third party has done a thorough evaluation.
4. How much time is it going to take you to learn and use the service? These services are supposed to save you time as well as money, so make sure to select a service that is easy to use, with clear and simple screens and instructions.
5. Can you test drive before buying? Always select a service that offers a free trial period before you sign a long-term contract. This gives you the opportunity to experience the service first-hand before making a permanent commitment.
6. Are there additional set-up fees to consider? Again, thoroughly investigate all fees associated with getting started with the service. Some include additional “one-time only” fees for set-up.
7. Are customer references available? See what other accounting professionals have to say about the service before you make your final decision.
8. How secure is your data? Before sending any employee or company data over the Internet make sure that the company has a clearly written and available privacy and security policy.
9. Is your satisfaction guaranteed? Make sure the company is willing to back up all of its claims with a guarantee.
10. Lastly, how hard is it to cancel the service? If you are unhappy, you’ll want to be able to cancel when needed, without being trapped in a long-term contract, or needing to write a lengthy snail mail letter to request a formal cancellation.
The trend to bring payroll in-house and offer it as a core or niche practice is well underway. Thousands of accounting professionals are realizing that online payroll offers the perfect opportunity to save clients from the hassle of IRS penalties, without spending too much time, or losing money. So, if you’re on-board, this is the perfect time to investigate your options, and show your clients that you are ahead of the game.
About Author:
Jim Heeger is the chief executive and president of PayCycle, Inc., the leader in on-demand payroll for accounting professionals who serve small business clients.
For more information, click here www.paycycle.com/welcome/default_ac.jsp?SC=5C82B1407057786F81DDDCB4EC83B4EB&OC=EA07D367F11CDB4A7B24FDEB27AA44CA
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