Human resources is a tremendous responsibility for small business owners — as well as a potential source of fines and liability. With 41% of business owners handling HR personally (which is the exact same proportion who handle their own finances, by the way), there’s so much room for error and the price tag that comes with it.
When your accounting practice offers client services that go beyond traditional bookkeeping or tax prep — such as helping them to figure out their payroll, insurance, hiring processes and compliance — you’re creating a more meaningful relationship. It also gives you total visibility into their business and an opportunity to provide an enhanced level of proactive advisory.
Establishing this type of a partnership with your business clients can be one of the most profitable decisions you can make for your firm because:
- You can provide better advisory and proactive guidance in virtually all aspects of the business.
- Offering HR and payroll services will always give you an edge over (artificial intelligence) AI competition.
- You’ll avoid mistakes, delays, double data entry, or unwelcome surprises by helping clients choose compatible tools that integrate all their finances — and make running their business easier.
And, of course, taking on more responsibilities adds an additional source of revenue for your firm.
Building a stronger relationship
When you set your small business clients up with accounting software, a payroll company or any type of add-on service, you’re sharing your professional expertise and building trust. The software and service providers a business chooses will lay the foundation for their company’s back office, so helping your clients set all of it up correctly is arguably one of the most critical steps. When they get it right, they’ll have a lot more time to focus on the things that matter most for their business (and they’ll remember your guidance made all the difference).
OnPay’s research found that business owners who handle everything themselves spend about 20 hours a month on payroll (and another 18 on HR). Furthermore, data about this do-it-yourself approach show that many small businesses may run into problems down the line when doing payroll themselves:
Recognizing this shortcoming — and being able to offer services or suggest a tech stack that can overcome it — creates a huge opportunity for advisors to take better care of clients. Clients trust accountants more than any other professional advisor, so they’re likely to be open to assistance with services that go beyond accounting and bookkeeping. And when they see how much you can do to help them focus on other parts of their business, they’ll probably stick with you a lot longer, too.
Leveraging deeper insights
Setting your clients up with software, HR and payroll services allows you to get a broad overview of almost every function of their business, allowing you to advise on — and anticipate — additional issues that may arise.
In an article from AccountingWeb, Liz Mason, the CEO of High Rock Accounting, explains it perfectly:
“At High Rock, our clients directly asked for [human resources]. They may not have said ‘please offer an HR service line,’ but we read between the lines of their other questions. We were offering payroll for years, and with that, clients started asking us HR questions. Here is a great one we got the other day; ‘I hired someone in Ohio that wants to be paid monthly; how can I do that?’
On the surface, this sounds like a direct payroll mechanics question. However, I know from experience that Ohio law requires payments to be made more frequently than monthly. This is actually an HR compliance question – not a software mechanics question. If we were not there to support HR and charge for it, we might have inadvertently set them up with a monthly payroll and helped them break the law, or we could have given them free advice not to do that.”
In this case, knowing HR — or working with providers who will catch these types of issues — helps clients avoid some big (and potentially costly) mistakes. Whether it’s properly classifying employees and contractors, managing remote employees in more than one state, or helping clients identify workers’ comp requirements, you’ll be doing them a great service. Having that depth of knowledge of their business makes you an invaluable resource because you’re able to help them stay a step ahead.
Because OnPay is so user-friendly and makes running payroll a breeze, I actually enjoy running payroll, and onboarding new employees is so easy. Their customer service is amazing: there is always someone available to answer questions, via online chat or phone.
— Jill Blockhus, Blockhus & Associates
Keeping a competitive edge
With several companies rolling out AI or outsourced bookkeeping and accounting services, it may seem like it’s getting harder to compete. But cheaper, less comprehensive accounting services don’t rise to meet most client needs. When you draw attention to all the ways you can help, it’ll be a breath of fresh air for business owners who realize they need a human on the other end of the line. AI may be able to crunch the numbers, but you’re way more likely to know what the numbers mean — or when they look wonky.
In this article from Forbes, AI pioneer Gary Fowler, says specifically that “one big advantage the technology can offer is to take over more mundane, administrative… tasks and instead leave the more complicated, expertise-requiring tasks to the employees.”
When you take on payroll and HR, it means more of those complicated, expertise-requiring tasks will fall to you!
Adding another revenue stream
Offering HR and payroll services gives you easy access to a new revenue stream that can strengthen relationships with clients and make those relationships more profitable as time goes on. Advisory services are also more consistent throughout the year, and when tax time rolls around the data should already be well-organized — so there’s a lot less chasing after clients for missing information.
You can build these capabilities internally, but many vendors offer solutions that do most of the heavy lifting and add all the payroll data back into your accounting software. Options range from white label services you can present as your own to completely outsourced referral programs.
As you think about taking the next step, take a look at a few different models for adding payroll to your practice — or check out OnPay, which is usually one of the top-rated payroll services for accountants.