If you are a CPA looking to expand your services to clients, there is no time like the present to provide payroll. Including it in the service portfolio makes sense, especially if your clients are receiving services like bookkeeping, taxation, and ledger review from you.
A payroll management system forms the core of a well-functioning business. CPAs are responsible for calculating payroll amounts, generating in-house reports, remitting state and federal payroll tax returns, and staying compliant with government regulations.
Some CPAs view payroll as a complicated, time-consuming, and potentially risky function because of the time and effort involved in managing it. However, it is also profitable if you streamline the function for your clients and take outsourcing help to simplify the groundwork.
How to offer payroll services to clients
If you are keen to learn more about offering payroll services to your clients, here are ten ways to do so effectively and efficiently:
1. Determine your clients’ scope of payroll work
The efficiency of your payroll service thrives on how well you create a process for it; to do so, you need to understand precisely what your clients want from you.
For instance, specific clients might want you to pay their employees and generate payroll reports while taking care of their CRA remittances and taxes. Others may also want you to make third-party payments to RRSPs and group insurances.
When consulting your clients about adding payroll services, it is best to ask a few questions for clarity, including:
- What is your payroll frequency?
- How much do your payroll services currently cost you?
- How difficult is it to collect employee timesheets for your payroll processes?
Take detailed notes when speaking to them so that you can create a bespoke payroll management service to suit their specific needs.
2. Set a payroll schedule for yourself
Always be on a tight schedule while handling your clients’ payroll. Your tardiness could result in flustered clients and their employees not being paid on time.
Of course, your schedule for every client will vary depending on the pay frequency, how many employees are to be paid, the payment method to be used, and so on. Whatever it is – your team of accountants should be aware of what is expected from them.
Send reminders to clients via email or phone call. Speak to them about their preferences for reminders and set automatic reminders, so you do not have to worry about them. The more of a heads up you give your clients, the smoother their payroll process will be.
3. Gather info from clients to prevent any missteps
You cannot alone deliver an accurate payroll service. You must have specific business and employee information at your disposal. You must, therefore, speak to your clients. Distribute a checklist (with deadlines) amongst clients informing them when they would need to provide specific information to you, including:
- Sharing year-end requirements, such as W-2s
- Providing employee timesheets if you run payroll for your client and other details such as every employee’s Social Security number, bonuses, tax filing status, bank account details, and so on
- Informing about upcoming public holidays that can impact direct deposits and payroll management
4. Ensure accuracy through payroll reconciliations
Given the volume of payroll data you handle, it is not uncommon to make mistakes. However, if caution is not heeded, it can cause you to work overtime on corrections. Besides, recurring or significant errors can even lead to an audit, resulting in tax penalties and other hefty fines.
Therefore, after completing your payroll calculations, it might be worth conducting a reconciliation to check whether the payroll records and general ledger entries balance out as per the client account.
Reconciling the two helps eliminate errors and ensures all clients’ employees are paid for their work. Rectifying payment mistakes after the salaries have been paid can negatively impact employee morale and the client’s business.
5. Maintain client payroll records
Every time you process client payroll, you must update your records to reflect more recent pay periods. As an accountant, you will need this data during the tax season when you file your clients’ employer taxes or personal income returns.
To simplify the task, please use a robust payroll software solution such as Xero or Quickbooks, so you never stress withholding, remitting, or filing payroll taxes for your clients. If you do not have the tech expertise in-house, make sure your outsourcing partner does.
6. Keep your clients up to date on tax laws
You are your clients’ trusted advisor. You must keep them informed about the ever-changing legislation. Whatever you learn, please pass it along to your clients so that they are never in the dark and can contribute equally while making business decisions.
Send them emails or call them. Depending upon the gravity of the situation, you may even meet with them face-to-face and explain the law. If you are outsourcing their payroll, you will have extra time on your hands to educate them about the tax laws and serve them better.
Join hands with an outsourcing partner
A reputable service provider employs a team of accountants who know payroll processing inside and out. Such individuals specialize in the nutty-gritties of the function – from the cumbersome salary calculations to complicated legislation management.
It is what the outsourcing partner is trained to do and part of the guaranteed service they offer. Professional and reliable outsourced accountants bring expertise in the following areas:
- Quarterly and year-end payroll tax calculation
- W-9 forms updation and accurate tax deduction adjustments
- Voluntary and involuntary employee withholdings management
- Knowledge of 401(k) regulations and integration with payroll deductions
- Social Security, FICA, and Medicare deductions and payment management
Outsourced accountants are brilliant at verifying accurate data, finding mistakes, and correcting them before they become an issue. By outsourcing your clients’ payroll to a reputable service provider, you have more time to focus on generating revenue or serving customers.
In case you want to know how Stellaripe helps accountants offer compliant and timely payroll services, please book a free no-obligation call with the team. Stellaripe’s payroll specialists are here to help you set up payroll schedules for each client as per policy. Talk soon!
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