Change payroll from ‘necessity’ to ‘profit driver’
The perception of payroll
Do you provide payroll as a service for your clients? Do you believe you could drive profit with payroll, or do you view if more as a ‘necessary evil?
For accountants, growing a payroll client base often means increasing costs, more staff or working unsustainable hours. Payroll as a service is, therefore, perceived as unprofitable. Time-poor and revenue-focused, accountants are often reluctant to manage payroll themselves. It’s common for accountants to outsource payroll to specialist bureaux in order to avoid complex tasks and compliance issues. If accountants do offer payroll services for clients, many only do so when it’s necessary alongside other services.
Payroll as an “after-thought”
The rise of cloud accounting has allowed accountants to improve efficiencies and interact with their clients more easily than ever. While the accounting industry sees a major increase in demand for cloud accounting packages, only 25% of payroll administrators in the UK were found to use cloud software in 2019.
So why are accounting firms embracing the cloud with their accounting packages, but still accepting clunky payroll processes as ‘the norm’? When it comes to technology, accounting software is a couple of steps ahead of payroll.
Perception vs. reality
If we pick apart perceptions of payroll and turn them on their heads, the opportunities that payroll provides are obvious. Payroll doesn’t have to be time consuming; compliance can be scaled, when using the right technology. If these things are true, then payroll can in fact be a profitable arm of an accounting business.
Advisory vs. compliance
Modern accounting firms realise that clients value communication, connectivity and transparency. Advances in technology are making this easier and increasing the demand for this more and more, meaning that firms must continuously innovate and re-evaluate their processes and systems to remain relevant. Traditional firms that stick to conventional processes and therefore focus their efforts on compliance rather than client advisory and value, will become obsolete.
Make an easy start with directors
Change doesn’t come naturally to anyone, which is why taking small steps is a more realistic and achievable strategy to begin transforming processes. Rather than moving all clients onto new payroll software at the one time, starting small with simpler director payrolls is an efficient gateway to beneficial change. With a lower time investment, accountants can automate their director-only clients’ payrolls fairly easily and instantly see the results of reducing workload for these clients, while investing this newly saved time back into advisory work, and enabling payroll to be a scalable revenue driver.
Our thought leadership paper: How accountants can make payroll profitable; explores technology trends in the payroll and accounting industry, and how firms can utilise modern technology to drive value and profit.
Turn payroll into a profit centre with Director Pays
Director Pays is a cloud-based payroll system for accountants and payroll bureaux that is designed specifically to remove the manual efforts involved with director payroll processing. Completely automate company director payrolls for the entire tax year, without compromising on accuracy or compliance. With a one-off set up, accounting firms can automate pay schedules, HMRC submissions including FPS and EPS, client reporting, and journal entries to accounting platforms. Our built-in engine automatically calculates tax and National Insurance, giving firms confidence that their clients’ payroll will be processed correctly to the exact specifications they set for the entire tax year. Configured warnings will pause an automation if something needs addressed prior to the pay run being finalised, ensuring accuracy and compliance.
With Director Pays, director payroll can be the easiest and most profitable part of any accounting or bookkeeping business. Firms can scale their director client base through automation, without increasing time or headcount. The hours of time saved each month on manual processes can be better spent on taking on more complex clients, driving value, and strategic work.
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