How exactly are firms deciding which payroll software to switch to?

BY HITENDRA R. PATIL

Once in a lifetime, a challenge arrives that changes everything — and no, we're not talking about the pandemic. Instead, we’re talking about the challenges that accounting and payroll firms face.

One such potentially business-threatening challenge impacts firms that offer payroll services — which software to use.

When your firm’s payroll software provider decides to offer full-service payroll themselves, you have a critical choice to make: either surrender your payroll practice to them or switch to another payroll solution to protect your payroll business. But how do you decide which payroll software to use?

On first glance, most payroll solutions look and feel similar. After all, we’re talking about payroll processing and related compliance work; how much can be different? Maybe efficiency and pricing? But the decision to switch is not that easy — unless you know what the firms that are similar to yours did before deciding upon a new payroll solution. Based on our studies and feedback, we have identified the most common concerns and objectives for firms, and their key decision criteria upon which they finally make payroll software decisions. Here are five critical insights that can help you make your decision quickly and with great confidence.

1. SURVIVAL OF THEIR PAYROLL BUSINESS AND RETAINING THEIR CLIENTS

Firm owners have told us they want to continue to provide payroll services to their clients. They don’t want to let someone else take their payroll business and clients away. In their search for alternatives, many have found solutions like Payroll Relief that do not compete with their firms.

2. EASY MIGRATION AND ONBOARDING

Moving to another software solution creates anxiety and a one-time data migration / onboarding effort for firms. It’s a cost that involves time and effort. But when it comes to the survival of the payroll business itself, it is not a cost at all. It is an investment, provided that (a) the new payroll software is easy to migrate to, and (b) it protects the payroll business. Both factors are critically important.

3. PROFITABILITY

The subscription price of software is not the true total cost. The tasks you have to perform manually using any software define your firm’s profitability from that software. The biggest mistake firms have made in the past was to compare the price, not the total cost. Thanks to intelligent automation around payroll processes, many firms using Payroll Relief have grown their payroll business by 200 to 300 percent or more, without adding payroll staff.

4. PAYROLL COMPLIANCE CHALLENGES

Perhaps the No. 1 reason business owners outsource payroll to your firm is the complexity and tight deadlines in payroll compliance. That is the real gap between your competencies and that of your clients, who are not payroll compliance experts. But does the payroll software take the challenges out of payroll compliance without your firm needing to outsource that work to someone else? Did you know that you can retain more than 70 percent revenue from your payroll service fees by clicking just one button, which you could otherwise lose to someone else?

One of the time-consuming and expensive aspects of payroll services is the need to service all the information needs of clients and their employees.

5. CLIENT COLLABORATION AND SERVICE COSTS

One of the time-consuming and expensive aspects of payroll services is the need to service all the information needs of clients and their employees. This includes timely communications to clients to ensure their payroll-related information and payments are lined up timely and accurately.

If your payroll software does not allow you to manage this from within the software, it is an added cost to your firm. Automation of client and employee services, including self-service technologies, can significantly reduce such costs and also eliminate the stress associated with tight deadlines. Never forget that you are the expert in payroll processing and compliance, not your clients — and certainly not a software company trying to service your clients themselves.

Here's to a sustainable, profitable payroll service!

Hitendra Patil is the head of customer success at AccountantsWorld. To learn more, visit AccountantsWorld.com.