Let’s accept that no one is too fond of payroll, nor are the accounting firms.
The reason behind it is the constant changing of regulations, which is tedious, time-consuming, and error-prone. 2022 has seen many changes, reversals, and then more changes in the payroll than any previous year.
But, thanks to the latest payroll software solutions, firms can easily offer payroll services.
Over the last few years, the payroll service industry has grown. The reason is cloud-based technology platforms, the growth of human capital management services, and the outsourcing trend from in-house employees to third-party vendors.
In this blogpost, we’ll let you know why it is time to be in the payroll industry and cover the following points:
● Why step into the payroll industry?
● Why is the payroll industry getting popular among businesses?
● Why should accounting firms offer payroll services?
● What are the payroll technology trends?
Why step into the payroll industry?
In the last 1-2 years, the payroll industry has significantly improved its working standards and needs in various organisations. The payroll process is more complicated than it was previously.
Who is driving the change?
The new breed of software or tools that have connectivity and data sharing built-in features and are cloud-based is driving the change. The service provider will securely store all the payroll data on a remote server, and we can access the software online using an application or web browser.
Why is the payroll industry getting popular among businesses?
Change in government regulations
As government regulations keep changing at state and federal levels, it becomes complicated for business owners to understand which rule is currently applicable.
It may create payroll mistakes and lead to penalties. Outsourcing it to a payroll company reduces the complexities of payroll processing.
Economic Growth benefits the payroll industry.
The COVID-19 pandemic has been a great flow that disrupted the entire economic structure of the country. However, there has been a slight change in the scenario in the last few months. As several businesses sprout from small to large, the payroll industry customer base has also grown.
As these businesses grow, the number of employees also changes, complicating the payroll process for companies. With the outsourcing trend, the payroll industry will experience growth and prosperity.
Cloud technology benefits the payroll industry.
The use of cloud-based technology is the beginning of a new era. Businesses taking advantage of a cloud service save on hardware, software, network management, and IT expenses.
The power of cloud-based software
The cloud-based software dramatically impacts the payroll system over conventional tools. These are:
- No more manual calculations
- Error-free data entry
- No worry about tax rate changes and changes in government regulations
- No manual tracking of employee working hours
- No more manual tax form filing and payments
- The payment process is simplified and automated
- Automatic monitoring of tax deadlines and notifying them on time
- No more losing of documents, as your store data safely in the cloud
- Focus on core business, products and services, building customer relationships, and other business operations
- Ongoing customer support prevents errors in payroll processing by newbies.
HCM benefits the payroll industry
We can categorise Human Capital Management as :
● Workforce Acquisitions,
● Workforce Management, and
● Workforce Optimization
Previously, the payroll industry operated for a small segment: payroll. However, with the advancement of cloud technologies, the payroll industry offers several services like:
● Time management
● Labour management
● Talent acquisition
● HR information management
● Talent management and forecasting
● Benefits administration.
Why should accounting firms offer payroll services?
Mainly the following points are the two reasons:
● Provide a complete package of financial services to clients
· You add value to the client’s business
Clients who get all financial services from a single destination will attract to your firm. Payroll services help them to comply with statutory regulations and HMRC filing requirements. Thus you are adding value to their business.
· You generate revenue
When you offer payroll services, you open an additional source of income from the clients who previously were dealing with other firms to get their payroll done.
· You can offer advice
While offering payroll services to clients, you understand their business, which helps develop a good working relationship. You can advise them on certain financial matters and ask them to purchase additional services.
· You master a niche market
You can provide payroll services to some unique sectors, such as agricultural and hospitality, with specific requirements.
· You simplify year-ending processes
With payroll services, your accountancy firm manages to store payroll data and provide them instantly during tax and audit.
· You enhance the firm’s brand value
By offering a high level of service from simple accounting practice, you enhance the brand value of your firm and let your clients know you offer them something more than accounting and tax services.
· You help your clients
With payroll services, you take off a significant admin burden and let your clients focus on business operations and growth.
What are the payroll technology trends?
Use of cloud technology
We expect the cloud-based payroll software market to rise tremendously by 2026. With cloud computing technology, you can access data anywhere with your device.
The HR department needs to manage payroll remotely as work-from-home trends. It saves time and hassles to visit a physical office for payroll processing. Additionally, the software allows employees, company managers, and HR to access payroll data in real time, keeps your data safe, and helps to scale your business.
Use of artificial intelligence
Artificial intelligence is becoming popular in several areas, including payroll. Initially, a company’s payroll services were restricted to calculating employee salaries, paying them, and creating a report.
But, with AI, there is a drastic change in paying employees. Here are a few of them:
● They help you classify employees and identify if they are in the correct tax brackets.
● They provide actionable insights from the collected payroll data, assisting the company in shaping its budget, removing unnecessary expenses, and contributing to business growth.
● Employees get their answers anytime with AI-based chatbots.
Integration of HR technology
Integration of the payroll and HR departments will help managers and staff access information from a single dashboard. Therefore, it increases efficiency in managing employee data. Additionally, it will help the company to generate actionable insights from the relevant data pool.
With HR and payroll service integration, employees will get timely payments for their number of working hours. It means there is almost no chance of payroll fraud.
Use of mobile payroll application
The trend for mobile payroll applications has been increasing in the last few years. It allows employees to access payroll information 24/7 from their comfort using an Android device or iOS and permits staff and retired professionals to track their earnings.
Additionally, these applications facilitate transparent payroll calculations for every employee across different departments. It helps to calculate tax automatically and minimises the risk of human errors.
The industry will soon integrate payroll services with HRM and accounting applications to initiate seamless payments or rewards. This integration helps the HR team manage employee and finance-related information from a single dashboard.
Financial wellness program
Modern employees look for organisations that provide a healthy work culture, retirement plans, and other employee benefits. Different payroll companies working with financial experts offer financial wellness programs for employees to boost their job satisfaction.
With the advancement of technology, payroll processing has become easier for accountants. A company can outsource its payroll to a payroll firm in London and remain stress-free.
These firms work with financial experts with years of experience and know your industry; they develop necessary payroll solutions and prevent penalties.
Accounting firms can now consider broadening their services to payroll and opening an additional income source. A client looks for companies that provide all-in-one financial packages, and payroll is one of the services high in demand.
Learn using the latest payroll technologies and stand shoulder-to-shoulder with your competitors.