'What Today's CPAs Seek in Payroll and Benefits Solutions: Most Are 'Satisfied' with Their Vendors, but Many Exploring Alternatives. Opportunities Particularly Ripe for Local Firms to Help Clients
As employee payroll, benefits and human resource functions become increasingly complex--and as workers continue to demand more of their employers" benefits administrative capabilities--CPAs are well-positioned to help clients streamline or offload selected HR chores quickly, securely and efficiently. "Anything that would reduce the amount of time required to do this processing would be beneficial," says a senior partner of a midsize firm in Memphis, Tenn. "Even with outsourcing, too much time is spent picking up and putting down reports to make certain that all the information is correct when you have a variety of employee groups--salaried, contract, hourly--some direct deposit and some by check." Assisting with client payroll and HR administration is a particularly ripe opportunity for CPAs in local-oriented firms according to a recent AICPA member poll. Nearly seven out of eight readers of the AICPA's CPA Insider[TM] weekly e-newsletter told us in a survey conducted by Bay Street Group, LLC that they think local CPA firms will be earning a "significant" portion of their revenue from payroll or benefits services to clients. By contrast, just 24 percent of respondents believe regional firms will be earning a significant portion of their revenue from payroll or benefits services and fewer than 6 percent of respondents think national firms will earn a hefty portion of revenue from this service line. "Payroll processing is a growing service that will become an important revenue component for small- to midsize firms," notes one small-firm managing partner. "For too long this business has been given away to the national bureaus." Survey respondents were culled from a random cross-section of readers, representing all geographic regions and firm sizes. Keep in mind that the notion of "help" comes in many sizes, flavors, complexities and price ranges when we're talking about payroll and HR solutions. The first decision CPAs must make is at the crossroads of "In-house" Street and "Outsource" Avenue. In the in-house camp, you can stay with manual systems, you can install software to help you or you can turn to a Web-based solution. If you decide to seek help outside your client's organization, you can outsource the work to a payroll agency/service bureau, you can outsource it to another accounting firm or you can turn to a professional employer organization (PEO). How your peers are tackling the challenge Today, more than half (55%) of CPAs who help their clients with payroll and benefits solutions are using in-house software, according to the Ray Street research (see Figure 2). Nearly two in five respondents (39%) said that they outsource to payroll service bureaus, with the remainder turning to Web-based solutions, PEOs or other accounting firms. Surprisingly, nearly one in 10 respondents said that they still handle payroll manually, suggesting there is still a great deal of CPA outreach to be done by payroll solutions providers. "Our clientele is small companies that are not very Internet knowledgeable," says a small-firm partner, "so we still have a lot of payrolls submitted by paper, less than 96 hours before the day of payroll." NOTE. Survey percentages exceed 100 because many respondents use multiple solutions for their clients. [FIGURE 2 OMITTED] Although survey results (Figure 1) suggest CPAs are generally satisfied with their current payroll and benefits solutions--rating a 3.6 satisfaction level out of a possible 5.0nearly two in five respondents overall (39.6%) say they are "likely" or "very likely" to be considering new solutions in the next 12 to 18 months. Respondents in public accounting had the highest satisfaction levels with their payroll/benefits solutions. Small firms had greater satisfaction with their current solutions than do CPAs from medium and larger firms, according to the Bay Street survey. [FIGURE 1 OMITTED] "I would like to have complete integration with our practice management software and our general ledger" payroll and accounting package, notes the managing partner of a midsize firm in Charlotte, NC. …