Let’s face it, accounting firms are not too fond of payroll. Processing payroll is a tedious, repetitive, time-consuming, and error-prone process. What’s worse is that legislation is constantly changing, making it hard for firms to keep up.
Fortunately for most accounting firms, payroll is no longer the beast it once was thanks to new software solutions. The change has largely been driven by cloud-based solutions that have connectivity and data-sharing built right in. Data is stored in the cloud and users are able to access it anytime, anyplace, as long as they have access to the Internet. In short, most accountants would agree that cloud software solutions have made payroll (and their lives) infinitely simpler and more secure.
The Power of the Cloud
However, for accountants who have been in the game for quite some time, all this talk of the cloud can be confusing and even a bit unbelievable—especially if you’re used to the pencil and paper method. Therefore, the best way to understand the power of the cloud is to look at how it compares to the old way of doing things and how this impacts your work.
|The Old Way||The Cloud|
|Calculations used to be carried out manually by pen and paper||Cloud software processes calculations automatically|
|Accountants had to keep track of all tax rate changes and different legislative rules||
Changes are updated automatically in the software
|Employee hours had to be tracked manually||
Hours can be tracked electronically and simply imported into the software
|Each pay run took a significant amount of time to complete manually||
Once set up, running payroll is quick and easy
|Each client’s pay run frequencies and tax deadlines had to be tracked manually||
The software tracks all differences in payment frequency and tax requirements for each client
|Data had to be stored on physical hard drives, which could be damaged or go missing||Data stored in the cloud is safe, secure, and accessible anytime|
Just take the case of Knit, a cloud-based solution that allows you to process payroll in less than 30 seconds.
As you can see, it’s hard to deny that cloud-based software has made the payroll process faster and easier, but you may still be wondering what all of this actually means for your firm? To explain why investing in this technology is worth your time and effort, we’ve broken down the top six benefits.
1. Lower Risk
As most accountants have learned the hard way, one of the biggest problems with manual data entry is the endless opportunity for error. And with the significant amount of manual data entry traditionally involved in payroll, errors are a constant worry (no matter how much time you devote to the task). These errors not only affect a company’s financial records and tax returns, but they can also trigger an audit. Payroll errors can even lead to over or underpaying employees, which can have significant repercussions for businesses.
However, when data entry is automated by cloud-based software, the risk of human error plummets. Unlike humans, payroll software will never misread a data field simply because it’s sleepy, or forget important due dates because of a stressful week. On the contrary, payroll software can handle everything from CRA remittances to issuing ROEs in just minutes, without risk of miscalculation. In turn, fewer mistakes mean less time spent correcting those mistakes and less risk of audits, fines, or worse, prosecution.
2. Digital Paper Trails
In the case that an audit is triggered, you don’t want to be sorting through overstuffed filing cabinets or bulging desk draws to find out where a mistake was made. Indeed, running payroll manually can make keeping a paper trail all the more difficult and a full-on nightmare in the case of an audit.
However, with payroll software, there are no overflowing filing cabinets or misplaced papers. Instead, all of your data is stored securely in one place where you can access it in real-time. Software not only makes it easy to keep track of changes and figure out where a mistake was made, but you also never have to fear losing your information thanks to regular backups. Therefore in the case of an audit, payroll software can help you to put together a digital paper trail and find all the key information you need with just the click of a mouse.
3. Greater Profit
While accountants have always seen payroll as a bit of a nuisance, they know just how profitable it can be for their firm. However, the lengthy amount of work and man hours involved in processing payroll has long cut into those profits.
But with the rise of cloud-based software, accountants can start to claw back those profits by selling payroll services for more than it costs to do the work. In other words, the cost of processing payroll may remain the same, but firms that adopt modern technology will spend less of their own time and effort carrying it out, ultimately leaving them with more time for other work. Even if these cloud-based services may cost a bit upfront, consider it a long-term investment that will end up saving you money by freeing up your time for more profitable tasks.
4. Stronger Relationships
In the past, so much time spent on manual data entry meant little time for customer service and strengthening client relationships. However, with a payroll software doing the heavy lifting, you’ll have more time to spend interacting with your client and you'll be able to shift your role from that of someone carrying out data entry to more of a business advisor.
The customization capabilities of payroll software also help you to meet your client’s specific, sometimes complex, needs. Because most payroll software is built with customization in mind, you can use different features to take care of all the payroll minutiae that would have previously caused a major headache. This will allow you to better serve your existing clients and to offer new clients a full suite of services.
5. Ongoing Support
Sure, it’s easy to see how manual payroll can be tedious and time-consuming, but what few accountants recognize is how isolating the process is. When processing payroll by hand, there is no one there to answer your questions or to offer suggestions for making the process easier.
However, with payroll software, you’re never in it alone. Whether you’re a veteran who encounters an issue you’ve never seen before, or a payroll newbie who needs to be walked through the process, payroll software comes with ongoing customer support for any issue you may encounter. This can be especially helpful when training someone new to payroll who might need extra support or attention.
6. On Trend
Today, we have reached a tipping point where firms are either joining the technological revolution, or they are getting left behind. Client’s expectations are changing and they are coming to expect a certain level of service from their accounting firms—automated payroll processing being one of them.
With this in mind, firms who decided to take the leap and adopt new technology sooner rather than later will have the advantage of staying ahead of slow-moving competitors. By offering cloud-based payroll software, you can meet the expectations of new clients and use the technology to make more from your existing ones. In other words, those who recognize that the cloud isn’t just a fad, but an innovation, will end up ahead.
At the end of the day, anything that can save you time will give you more energy to scale as a business is worth investing in, and payroll software is a tool that does all of that and more—just ask accountant Marco D’Ercole of Toronto’s CloudCPA.
By Katherine Pendrill on Dec 11, 2018