Using Payroll to Drive Growth and Stay Competitive
To say that 2020 was a revelatory year is an understatement. Over the course of the year, many accounting firms were put in a position they weren't quite prepared for; they were suddenly being bombarded with questions pertaining to COVID-19 legislation, PPP loan preparation, and other tasks that were very different from their typical service offerings.
To understand how the pandemic has impacted accountants and their small business clients, SurePayroll commissioned Arzient Research / Accounting Today to survey small business owners (with 50 or fewer employees) and the accounting professionals that work with them. The resulting research found that while this pandemic may have come about rapidly and with little time to prepare, it did come with a certain realization – payroll is critical to small businesses, and many small business owners need help with it.
While payroll may not be the most alluring product offering – in fact, it is one that many accountants and CPAs want little to do with – it can have major impacts on the health of America’s small businesses and their employees. Our study found that over 75% of accounting professionals stated their small business clients need some assistance with running payroll, and that over a quarter of their clients have directly asked them for assistance with paying their employees.
This may not be particularly surprising, since payroll can be deceptively complex. These feelings only intensified since the rollout of the Paycheck Protection Program (PPP), which had many payroll reporting requirements that had small business owners scratching their heads. Soon everyone was looking for ways to maximize their PPP loan forgiveness and get the most out of the government’s programs, often turning to their accountants for advice. Our study found that over 90% of accountants were supporting their clients obtain COVID-19 payroll relief.
This sudden attention to payroll is causing many CPAs and accountants to revisit the notion of adding payroll to their list of services: 60% of respondents were already offering payroll at the time of our survey, with an additional 5% planning to start in 2021. The reason behind this was clear: our research found that half of accountants found that providing payroll services gave them access to data that could improve the overall health of their clients’ businesses and help them proactively advise clients on regulatory changes that could impact their business.
Even more critically, for those that were looking to add additional revenue to their practice, nearly 60% found that offering payroll served as a gateway to providing a broader range of value-added services. Payroll is a sticky service that has been shown to increase client retention rates and open up additional revenue opportunities.
The good news is, it’s easier than ever to offer payroll to your small business clients. With the evolution of online payroll services, paying employees is no longer a monstrous task it once was, and many payroll providers will partner with accountants and other financial service providers to extend the offering to their clientele.
While we hope the next year is less tumultuous for small business owners, there’s no doubt that laying the foundation for good business practices may help them prepare for anything the future might throw at them. If you’re an accountant looking to proactively assist your small business clients for any challenges they might face, it may be a time to take another look at adding payroll to your service offerings.
Click here to read our full report and learn how your accounting firm might benefit from offering payroll and find other strategies to help you stay competitive.
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This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.