For many practitioners, payroll services are a welcome jolt of energy—and profitability—for their firms.
Even if you already have a respectable payroll base and are pleased overall with your payroll operations, there’s always an opportunity to improve profitability. And while the actual processing is likely to remain your principal source of revenue, payroll can also provide you with ancillary income streams.
First, let’s do a little adjustment to our mindset and stop thinking of ancillary services as an accommodation for clients. Instead, let’s recognize that these services can be an important contributor to your payroll profits. So get comfortable with proactively promoting them—don’t wait for clients to approach you. After all, you’re perceived by them as their most trusted advisor, one with a high-caliber network of partners. They look to you for ways to make their payroll process easier, so just do it, as the saying goes. Hint: Tax engagements are a great opportunity to have these discussions.
The offerings discussed in this article have become increasingly important to payroll-focused tax and accounting firms that want to boost profits and stay competitive. You need these service offerings to not only rival the big services bureaus, but also most small-to-medium firms that offer payroll services today (in other words, your peers).
Perhaps even more important, your clients see real value in getting a wider variety of services under one roof. Offering a more complete suite of services will attract new prospects who might not have considered your firm before. There’s a real opportunity to be not only a service provider, but to position your firm as a comprehensive solution provider—which is something that more and more clients are coming to simply expect as part of their customer service experience.
So if you’re ready to jump-start your payroll business—whatever level it’s at now—here are five ancillary services worth considering.
- Integrated Pay-As-You-Go Workers’ Compensation—With pay-as-you-go workers’ comp, insurance providers receive information and premiums are calculated, based on the actual payroll amounts, each the payroll is processed. This benefits your clients in several ways: it eliminates large premium down payments, there’s no monthly billing for finance fees, it minimizes audit adjustments and your clients enjoy improved cash flow management. Learn more in this short video, or visit The Hartford’s dedicated Thomson Reuters page.
- Time Clock Re-Seller Programs—Demand for integrated time clock solutions is trending up, thanks to increased regulation and reporting needs and the added complexity of the ACA, EEO-1 reporting requirements and questionable overtime rules. With so much going on in the payroll world, it’s in your best interest to electronically collect time and payroll data. I recommend researching several re-seller programs, many of which offer white-label solutions and resources to help you get started. For a complete list of time clocks supported by Thomson Reuters Accounting CS Payroll, click here.
- Background Checks—Employers who conduct background screenings greatly reduce the risk of employee theft, fraud and embezzlement. Background screening should be discussed with all your clients, to educate them on the fact that it can save a company thousands of dollars by helping to prevent a bad hire. Thomson Reuter Clear® offers these services, and we also partner with National Crime Search (NCS), which gives you access to a national criminal directory that covers all 50 states and offers the option for you to set up a personalized website for your account.
- Work Opportunity Tax Credit (WOTC) Guidance—When you educate clients on ways to maximize their tax credits, take time to define the ways you can assist clients in meeting the necessary qualifications to obtain the WOTC. While it’s a very specialized credit, this could be an excellent opportunity for your firm to grow and expand services. Successful firms who offer this service use a pricing model of a percentage of the credits gained for the company.
- Labor Law Posters—Let your clients know that the posting of current state and federal labor laws is a mandatory requirement for all U.S. businesses. Too many business owners are unaware that posters must be updated whenever there’s a mandatory change, which could happen any time during the year. Many firms offer their clients an annual subscription to keep them in compliance, or even provide free posters to non-clients as an incentive to gain their business. Thomson Reuters partners with Forms CS to offer these resources.
While these five services might start as nominal revenue generators, over time they can grow into a significant stream for your payroll division and offer areas of specialization to help differentiate your firm.
Remember, the more products and services you have in place with your clients, the “stickier” your relationship will be. Payroll is a constantly changing field, so it’s important to build a network of support systems that can help you fill any gaps. Thomson Reuters offers a variety of payroll support systems on the Preferred Partners page of our website that can help electrify your payroll offering and make it a bright success.