Should I Offer Accounting Payroll Services in My Firm? 

For many Certified Public Accountants (CPAs) and accounting firms, the thought of offering to run payroll for clients can feel overwhelming—too much work for not enough reward. But the truth is, with the right approach, savvy CPA firms can transform payroll into a profitable revenue stream that enhances client relationships and boosts business growth. 

If you’ve been on the fence about whether offering accounting and payroll services is right for your firm, this guide will walk you through the key benefits, common challenges, and efficient tools like payroll service software for accountants that can make it all manageable. 

Do accounting firms offer payroll processing services? 

Yes, many accounting firms already offer payroll services alongside traditional accounting, such as federal and local tax payments and direct deposits. However, others shy away from it due to concerns about compliance, resources, or perceived profitability. These are all valid points, but the landscape has changed. With the right accounting payroll service software or outsourced solutions, those worries no longer have to hold you back. 

By diversifying, CPA and accounting firms can: 

• Expand their business offerings strategically 

• Strengthen client relationships by becoming a one-stop shop for financial needs 

• Generate consistent revenue streams 

• Gain a competitive edge in an increasingly crowded market. 

Payroll doesn’t have to be a headache. With modern tools and strategies, it can be a smart, future-focused move. 

Why should CPA firms consider offering payroll processing services? 

Payroll is no longer just an administrative task. Forward-thinking CPA firms see it as an opportunity to enhance their services and meet clients’ growing needs. Here’s why CPAs are increasingly jumping on board: 

1. Strategic business growth 

Adding payroll services allows your firm to attract clients who value comprehensive services. It’s a gateway to offering additional high-value solutions down the line. 

2. Stronger client relationships 

Clients trust their CPAs for accuracy and expertise. By offering payroll solutions, you increase your value to existing clients and improve client retention. 

3. Steady revenue generation 

Offered correctly, payroll solutions create a recurring revenue stream. Whether you’re using payroll service software for accountants or outsourcing, there are ways to make this service both efficient and profitable. 

4. Differentiation in a competitive market 

Adding CPA payroll services sets your firm apart from competitors who haven’t adapted to evolving client needs. It shifts your firm from being "just another CPA" to a consultative, full-service partner. 

Common challenges 

Despite the benefits, some accounting professionals hesitate to introduce payroll to clients due to these common challenges: 

Tax compliance risks 

Payroll involves complex tax laws and labor regulations that vary by state, making non-compliance a real concern. Mistakes can result in financial penalties, damaged client relationships, and harm to your reputation. 

Solution: Use payroll service software for accountants with built-in federal and local compliance checks or partner with an outsourced payroll provider. These solutions automate processes, ensure accuracy and keep you updated on payroll tax law changes. 

Limited resources 

Smaller CPA firms often feel stretched thin, and payroll can seem like one more strain on their team. Larger firms may also prioritize other, more established revenue services. 

Solution: Opt for outsourcing or payroll service software that eliminates time-consuming admin work. This allows your team to focus on higher-value services while an external partner or software handles payroll for your clients. 

Profitability perceptions 

CPA firms sometimes view payroll as a low-margin service that doesn’t justify the additional effort. 

Solution: Leverage payroll service software for accountants to streamline workflows, reduce overhead, and boost profitability. Additionally, consider tiered pricing options where clients pay more for extra support or customization. 

Pricing pressures 

Small CPA firms worry about competing with DIY solutions and bigger accounting firms that can entice businesses with lower costs. 

Solution: Highlight the personalized service and expertise your firm offers compared to generic software. Many clients are willing to pay more for convenience and peace of mind. 

Accounting firm size 

If you are a small firm, introducing payroll services can be challenging due to limited staff and time. Managing client payroll requires compliance with complex payroll tax and labor laws, which can be overwhelming for a small team.  

Solution: Small accounting firms can leverage payroll software to automate processes, reduce errors, and ensure compliance with federal and local payroll tax laws. Outsourcing payroll to a trusted provider is another practical solution, allowing firms to offer the service without overburdening their team. By combining technology and external expertise, small firms can streamline operations, stay competitive, and turn payroll into a valuable service for their clients.  

How to begin offering CPA payroll services 

If you’re ready to overcome the payroll hurdle, here are some practical steps to get started: 

1. Evaluate the right tools 

Payroll service software for accountants automates payroll processing, ensures compliance, and integrates with your current accounting software. This saves time for your staff and reduce errors. 

2. Consider outsourcing options 

Outsourced payroll providers allow you to offer payroll services while reducing the workload on your team. Many of these services can be white-labeled, allowing you to brand them as your own. 

3. Develop clear pricing structures 

Set up tiered pricing based on client needs. For example,: 

• Basic Package: Simple payroll processing 

• Advanced Package:  Payroll plus tax compliance 

• Premium Package:  Payroll, tax filing, and HR support 

4. Educate your team 

Ensure your team is confident discussing payroll with clients. Offer training to familiarize them with payroll software or the outsourced service you choose. 

5. Market your services 

Showcase your new payroll services to prospective payroll clients when marketing your firm. Highlight the convenience, cost savings, and risk reduction you offer. Be clear about your expertise and the tools you use to ensure accuracy. 

A game changer for your firm 

The days of viewing payroll as too much hassle are over. Thanks to online payroll software and payroll outsourcing options, offering client payroll services is easier and more profitable than ever before. By expanding into payroll, you can strengthen client loyalty, create new revenue streams, and stay ahead in a competitive market. 

Take the leap, explore payroll solutions, and discover how to make payroll work for your accounting firm and your clients.