A small business taxation survey conducted by the National Small Business Association revealed that payroll taxes are the second largest burden for small business owners on both financial and administrative levels. According to the survey, one out of three small business owners with five or more employees already spend at least six hours on payroll taxes (often more) and pay $500 or more on monthly payroll services. Small business owners in the survey also cited the administrative burden of ensuring state and local compliance as an additional challenge to business operations and overall efficiency.
As a consequence of these challenges to small and medium-sized businesses, more accounting and CPA firms have begun offering partnered payroll services to their clients. As of 2021, a survey by Accounting Today found that over 65% of accounting firms offer payroll services to their clients.
Partnering with a trusted payroll service provider like CAVU HCM can drive growth for your CPA or accounting firm by adding a valuable dimension to the services you offer. Using partnered payroll services increases client retention and enhances revenue streams without the challenges of building a payroll system from scratch.
In this article, we’ll explore the many advantages of expanding accounting firm services, the benefits of payroll partnerships for CPAs, and what to look for in a qualified payroll provider to support the growth of your accounting or CPA firm.
The Benefits of Offering Payroll Services to Clients
Although your firm may comfortably manage tax returns, filings, and relevant compliance concerns, your clients often need additional support with employment tax management, including payroll taxes, withholdings, and other labor-related compliance concerns. When small and midsize businesses manage payroll manually, in-house or using an inefficient payroll software system, this can lead to inaccuracies, time spent on redundant data entry, and penalties for noncompliance.
This entire process can be simplified for your clients through the use of partnered payroll services, while providing additional profits, client satisfaction, and organizational growth to your firm. As we’ll explore, the biggest benefit for your firm is the opportunity to shift focus towards your highest-priority tasks: analyzing and improving the financial well-being of your clients; offering strategic input; and addressing client concerns. Meanwhile, payroll services support your clients’ payroll tax processing and improve related processes like budgeting, recordkeeping, and report generation to analyze historical data.
Increased Profit and Revenue
When you choose a cloud-based payroll solution that is paired with expert support, it offers a number of immediate benefits to your firm and clients. Automated features within payroll software eliminate the need to complete time-consuming manual tasks or troubleshoot issues when payroll practices are disorganized, inaccurate or inconsistent. A qualified payroll provider can not only manage payroll tax form and payment remittance for your clients, but also streamline adaptation to local, state, and federal payroll and labor laws.
This reduction in time spent on payroll tasks increases profits, payroll efficiency, and data accuracy. Also, some payroll providers offer software to firms at a reduced rate, allowing your firm to profit from invoicing clients (and services) using your standard practice fees once your payroll solution is launched.
Improved Client Satisfaction & Expanded Client Base
In the past, accounting and CPA firms could sometimes bypass offering payroll services, but payroll support is a growing need and expectation of small and midsize business owners that work with firms. This is especially true as businesses seek more of a one-stop and streamlined solution to their financial processes and the advice they receive.
Rather than denying client requests or directing them to independent payroll providers, offering partnered services improves your firm’s reputation and competency to support all tax and payroll processes. Additionally, it mitigates the risk of competitors securing your potential clients or gaining an advantage based on the more limited services your firm offers.
Finally, by offering payroll services, you offer a valuable service that other firms may not offer and that many businesses seek. Payroll services may, in some cases, serve as a launch point to provide a range of other core services your firm already offers, whether it’s bookkeeping, tax advising, or otherwise.
Compliance Peace of Mind
When using a cloud-based and automated payroll solution, adjustments to frequently changing regulatory changes are simplified and addressed in real time. Calculations are automatically adjusted based on a business’ size, industry, and the jurisdiction(s) where it operates. As a result, calculations, withholdings, and other payroll-related processes remain accurate and consistently compliant with local, state, and federal regulations and tax obligations.
Key Features of a Partnered Payroll Provider
When choosing a payroll provider designed to help you expand services for your CPA or accounting firm, it’s important to look for comprehensive tools, resources, and expertise that can be integrated with other HR and HCM processes as needed. A payroll solution for your clients should help you accomplish all of the following:
- Accurate, timely, and automated calculation of all employment (employer and employee) taxes, earnings, deductions, wage garnishments, and more.
- Long-term compliance with local, state, and federal payroll and labor laws.
- 24-7 mobile access to the provider’s payroll platform from a range of devices, and anywhere with a Wi-Fi connection.
- Technical support and easy integration with other HR and HCM processes, including timekeeping, onboarding, benefits administration and workforce management.
- Streamlined integration with existing accounting systems; streamlined preparation of financial statements.
- Expedient filing of all payroll tax forms, timely new hire reporting, and automation of time-consuming administrative tasks.
- Mitigated risk of state or IRS penalties due to issues with payroll non-compliance
Comprehensive Payroll Solutions in Partnership with CAVU
More and more business owners seek payroll services as they choose a qualified accounting or CPA firm to support their financial well-being. Want to elevate your CPA or accounting firm's offerings and growth? CAVU HCM offers extensive payroll and HCM solutions to streamline payroll for your clients, provide HR support, optimize workforce management, and ensure long-term compliance.
Discover all the advantages of partnered payroll services with CAVU HCM.