Today's Technology for Tomorrow's Firm.
Issue link: https://cpapracticeadvisor.epubxp.com/i/555302
6 August 2015 • www.CPAPracticeAdvisor.com FROM THE TRENCHES By Randy Johnston Making the Right Payroll Choices for Your Firm and Your Clients No a mou nt of rea son i ng , a nd certainly not this simple article, is likely to conv ince you to prov ide payroll services if you aren't already doing so. Proftability, beter client service, more accurate information, deeper cl ient relat ionsh ips a nd a more valuable practice are certainly not re a son s enoug h to c on sider adding this your practice if payroll ser v ic e s don't f it you r s t r ate g y. However, if you can manage a team of people efectively, and these people k now they are helping businesses w ith a burden that most business owners and manager would like to avoid, there is a business opportunity waiting for your consideration. Why On Earth Would I Ever Want To Process Payroll? First, I'll readily acknowledge there are multiple pain points in running a pay rol l system. Pick one or more choices from the following list: • liability • remiting appropriate taxes • submitting forms and payments in multiple jurisdictions • compliance with payroll and HR regu- lations • time consumed running the system • extra time required for quarterly or year-end reporting • if paper is used, getting the forms required • acquiring all of the information accu- rately • maintenance of both the applications and data • integration to beneft systems • simply having to pay atention to and run the system every week or every day, and • correcting errors that have been made. More could be named, but this t y pe of list is what prevents most accountants from considering run- ning a pay roll system, and feeling good about outsourcing this non-core competence activ it y. Admittedly, large scale pay roll companies like Ceridian, ADP and Paychex exist for a reason, and they have built very nice, profitable, recurring revenue busi- nesses. I respect and recommend these companies and their services on a regular basis when they are chosen for the right reasons. Rarely are these payroll services chosen because they are the least cost. On the other hand, many of these pain points have been made much less painful with the current generation of sofware. Notable changes in the last 5-10 years include: • Ability to outsource part or all of the payroll process eliminating the com- plexities and retaining the client rela- tionship • SaaS solutions that eliminate mainte- nance and updates of the sofware • Employee Self Ser vice (ESS) has reduced much of the data entry, accu- mulation of information, corrections, and distribution of information • Automated Clearing House (ACH), Electronic Funds Transfer (EFT), and employee payroll cards for the unbanked have made moving funds easier • Time capture including SaaS and mobile timesheets have made accumu- lating employee hours easier, and in some cases, completely automatic • Some payroll services are willing to accept all liability, reporting and pay- ment obligations, just like the com - pletely outsourced payroll services, while your frm does the processing • Systems have optimized the time used for processing by minimizing or automating more steps without compromising controls and confrming audit steps • Processing both salaried and hourly employees has become almost auto- matic in some systems, with as litle as one step for an entire payroll • Heavy payroll compliance areas such as Professional Employer Organizations (PEO), Staffing, Fiscal Agents and payroll services capabilities have been added to many sofware platforms • Integrated HR assists in the onboarding, compliance and termination of employees • Accuracy, control, ease of adjustment and fexibility while complying with regulations is easier to accomplish in less time with in-house payroll oferings • Time and costs are frequently reduced. While you may not have the appropriate skills to run a payroll system well, producing a weekly payroll, 941s and W2s has become routine and accurate and consumes minimal time. Public accounting frms with col- laborative accounting practices can add prof itable rec u r r i ng revenue using less expensive employees to ser v ic e c l ient s d i re c t l y w it hout increasing professional staf. Beyond increasing revenue, adding payroll and HR ser v ices can increase the value of the practice and tie clients more tightly to your frm in a way that compl iance ser v ices can't. Ban k s learned long ago that you have to have at least three service oferings to keep customers f rom sw itch ing. W hat three ser v ices do your clients use every month, or at least every year? A few examples of software pro- viders may help you see the possibili- ties. For example, long time sofware company CYMA ofers payroll solu- tions across many d i f ferent busi- nesses, from PEO, Staffing, Fiscal Agents, Corporate, Not for Proft to Payroll Services companies. Having the upfront capability provided by Web-Based Employee Self-Ser vice (ESS) which includes pulling hours into Payroll and then pushing to AR 6 A u g u s t 2 0 1 5 • w w w . C P A P r a c t i c e A Randy Johnston is executive vice president and partner of K2 Enterprises and Network Management Group, Inc. He is a nationally recognized educator, consultant and writer with over 30 years' experience. He can be contacted at randy.johnston@cpapracticeadvisor.com . F or many accountants, payroll=plague, and should be avoided at all costs. Others have discovered that there are antibiotics, and a clean, safe way to handle payroll where there are notable recurring profts to be made while improving client relation- ships. Industry accountants who need accurate payroll information automated for integrated costing or benefts can self-medicate. Public practice accountants with successful collaborative accounting practices can add payroll with Human Resources (HR) capabilities. Many accountants have come to the conclusion that running a payroll system accurately and with minimal liability has become practical, cost-efective and proftable. Have you made this discovery?