Can Payroll Be Profitable Amid the Capacity Crisis?

When was the last time you earned substantial profits on payroll? For us accountants, it’s always been much of a hassle instead of a profit opportunity, right?

Well, those days are long gone. In modern times, payroll isn’t just a necessary service but a profitable one. But how?

It’s no secret that the accounting industry is plagued by a talent crisis. Affected by it, over 90% of firms find it difficult to recruit skilled staff and retain their top talent. So, what’s the solution?

Top accountancy firms are employing smart techniques, such as switching to cloud-based payroll software, implementing automation systems, or leveraging payroll outsourcing services to streamline their payroll processes. However, achieving profits may still seem like a distant goal.

In this blog, we will explore innovative strategies for making payroll profitable amid the ongoing capacity crisis. Let’s get started.

The Common Challenges of Payroll

As accountants who have handled payroll for years, you are far more familiar with this one. What’s the most common issue you have faced with payroll processing?

Traditionally considered a burden of a service, payroll is ripe with multiple challenges.

• Compliance: You know how it is with tax compliance, right? They change in the blink of an eye, and HMRC helplines are almost always too busy to help. Keeping track of these changing regulations is a task in itself. We say accountants should get paid for just tracking these changes. Do you agree?
• Talent Shortage: The no. #1 challenge facing accountancy firms is a talent shortage. If you are already short of staff, all your time goes into managing the intricacies of payroll. How would you find the time to devise a profit strategy then?
• Technology: Technology has always been a challenge for us accountants. Plus, it’s not always economical for small and mid-sized firms to integrate the latest technologies into their workflows.
• Remote Teams: Payroll is no one-person job. Traditionally, it required three teams – HR, payroll, and finance, to work together on processing salaries. However, with remote teams becoming a norm, many firms face coordination issues when processing payroll.

The #1 Strategy for Making Payroll Profitable

Now, let’s address the primary question of this blog: How can you make your payroll profitable?

There are multiple strategies to help streamline your payroll. And a streamlined process means greater client satisfaction that ultimately converts into profits.

However, one strategy that’s proven highly effective in making payroll profitable is outsourced payroll services.

Outsourcing isn’t a new term for our industry. Whether you have tried outsourcing or not, it is known to be a profitable strategy for businesses and accountancy firms.

Does Outsourcing Really Work?

Payroll outsourcing has helped numerous accountancy firms scale operations and boost profits over the years. Let’s look at the numbers.

Per a recent survey by an accountancy firm, 81% of the accounting firms that outsourced payroll saw an increase of 5% to 40% in their overall revenue. About 50% to 80% of these benefits were invested in improving processes and training cycles.

Apart from profits, outsourcing is proven to offer the following benefits to accounting firms:

• Error-free Payroll: We don’t need to educate you about the implications of payroll errors. Outsourcing not only makes your process error-free, but also streamlines it.
• Hassle-free Process: How would you like it if trained, experienced professionals handled your payroll compliance and paperwork? With outsourcing, you can achieve just that!
• Freed-up Time: If there’s one thing that we accountants don’t have, it’s time. By engaging in outsourced payroll services, you free up your time to focus on clients and other strategic tasks.
• Tech Proficiency: We’ve said it before and we’re saying it again—technology is the future of accounting. It’s one of the reasons growing accountancy firms like yours are turning to payroll outsourcing companies to gain access to the latest technologies.

Frequently Asked Questions

1. What’s the most important thing about payroll?

The most important thing about payroll is compliance. As tax regulations change frequently, accountants must constantly track any changes in legislation affecting payroll. An easy way to do this is by partnering with top-tier payroll outsourcing companies.

2. Is outsourcing payroll processing right for your business?

Payroll outsourcing has proven effective for accounting firms in several ways. But if you are new to outsourcing, you may be unsure or skeptical about taking the leap. As such, you should consider outsourcing when you are short of staff, your existing team is overwhelmed, or you need specialised payroll expertise.

This quick video will help speed up your outsourcing decision.

Final Thoughts

So, let’s cut to the chase, mates; the answer to this blog’s primary question is that payroll can be profitable even amid the capacity crisis.

While there are several strategies, such as leveraging technology, which help streamline your processes, the ultimate way to make your payroll profitable is by outsourcing it.

Payroll outsourcing services have helped over 81% of accounting firms achieve substantial revenue growth of between 5% and 40%. They also helped an esteemed UK practice achieve 3X growth through an 18-year strong partnership.

If you are still unsure about outsourcing, we totally understand. Would it help to have a quick chat with our expert, who can guide you through the decision-making process? Call us at +44 208 146 0808 or fill out the form below to book a free, no-obligation consultation.

If you’d like to assess our service firsthand, we’ve got you covered. Sign up for our 10-hour free trial to experience the benefits of outsourcing for yourself. Get started now.