Online Tools Can Simplify Payroll Management, Boost Bottom Line for CPAs

By Rene Lacerte

Client payroll management can be a major hassle for CPAs, who sometimes struggle with the dilemma of taking on demanding payroll tasks that may dilute profits, or referring clients to traditional payroll service vendors that may be unresponsive to some client’s needs, at a high price.

Online tools can be a viable alternative for processing client payroll.

CPAs who have taken payroll in-house sometimes find the work time consuming, occupying hours that cannot always be billed at the full rate, impacting practice profitability. A recent payroll industry study suggested that 31percent of approximately 300 accountants surveyed don’t handle payroll for clients because they find it to be unprofitable, while referrals to payroll services that do not focus on small business prompt clients to complain of poor customer service and high costs.

Sheryl Schuff, of CPA firm Schuff & Associates in Indianapolis, handled client payroll both ways for several years.

“I referred some clients to outside services. For some of them I did payroll myself,” Schuff said.

But the high cost of traditional payroll services and the time involved for her to keep up with constantly changing payroll regulations persuaded Schuff to switch to an online payroll.

“My online payroll solution…is saving my clients money, and streamlining my practice,” she said.

For CPAs like Schuff who wish to grow payroll into a profitable business, online services can dramatically cut their payroll costs. For example, processing payroll for a client with five employees can cost as low as $120 per client per year with an online service, compared to $1,000 to $1,500 with a traditional payroll service, according to competitive price analyses of traditional payroll services.

Online tools allow CPAs to access and input data via the Internet, automate and simplify payroll tax payments and filings, and export data to traditional accounting software packages. They also help consolidate information to make tasks easier for clients as well.

Schuff said clients are pleased with the one-stop shop her accounting firm provides, and she continues to encourage clients to turn over payroll needs to her practice.

“Most of my clients want complete relief from the payroll headache, which is what my online payroll solution allows me to give them,” she said.