CPA firms that recommend payroll services have an important decision to make in supporting their small business clients. Helping clients select a payroll partner that is a good fit makes life easier for CPAs by streamlining clients’ payroll processes and allowing them access to reports that simplify tax preparation and planning.  

Your clients with 20 or fewer employees need a small-business-focused payroll provider. Larger organizations need a payroll solution that can support applicant tracking, performance management, integrated benefits, and other features, run by an HR department. The solutions are different.

Since 89% of America’s businesses have less than 20 employees, this blog is focused on helping CPAs assist small business owners as they consider payroll options. 

1. Onboarding Support

Your payroll provider should be setting your clients up with each taxing agency and working with your client to ensure Third-party access (TPA) is correct with all agencies. This is especially important with multi-state clients. Make sure departments are established to track payroll expenses by function and by Workers’ Compensation classification to simplify Comp audits. 

Modern payroll systems allow CPA access to reports like FICA Tip Credit. Reports can be accessed on a Saturday afternoon during tax season. Setting up payroll correctly prevents unnecessary tax notices and demonstrates the value of outsourcing this critical function. 

2. Direct Deposit

Most Americans are paid via direct deposit. This automated transfer is extremely popular because it pays employees reliably. By providing this option (if you aren’t already) your clients save on printed checks and   shipping expenses. 

Encouraging your clients to “Go Green” and be paperless helps them see the digital transformation benefit: that mindset is critical for small businesses to adapt and look for ways to keep improving.

3. Tax Filing Services

Make sure your clients outsource the tax payments. This allows them to transfer the risk of late fees and penalties. Instruct them on the correct use of EFTPS so they can make sure all Federal payments have been made with one simple login.

Ask the payroll provider “What happens if my client receives a tax notice”? The correct answer from the payroll provider should be simple: ”Send us the notice and we will resolve it.” 

4. Employee Self-Service Options

Your clients' employees need access to their pay stubs and W-2s both from their mobile phones or desktop computer. 

Be careful with employees changing direct deposit banks as this is the most common payroll fraud. Make sure your clients validate every change an employee makes because compromised email addresses are a number one security risk. 

Tell your clients to pick up the phone and verify every change. It may seem excessive however they will quickly see the value.

5. Reporting Tools

Reports are critical for an effective payroll service provider. The two most critical are a concise Payroll Summary and Payroll Journal. In most cases, this is all that is needed to make a journal entry into the accounting application. 

On-demand reports help with specific needs and should also be considered. Encourage your clients to download Quarterly 941 reports in PDF form and keep them for long-term records. 

6. Dedicated Customer Support

Look for a payroll provider that has dedicated service representatives for every client. The best way to check is to pick up the phone and call the payroll provider. Ask if they provide dedicated service during business hours.

7. Integration with Software

Most small businesses use QuickBooks Desktop or QBO (QuickBooks Online). Look for a provider who offers GL integration with both platforms. Also, work with your clients to make sure their Chart of Accounts (COA) is accurate to reflect the correct journal entries needed for their industry.

Not every client is technically capable and instructing on memorized transactions is a logical first step toward full integration. 

8. Ease of Use

When users log in, they should generally be able to navigate to whatever task they’re trying to complete without needing to call someone for help.

9. Cost

Look for value. The right solution will save time and money for your clients.

10. Security

Small businesses are targeted by cybercriminals because they may have weaker security protocols than larger organizations. 

This means your clients must take precautions to protect their networks and ensure that they are not vulnerable to cyberattacks.

Reliable Payroll Service Providers do the following:

• Complete extensive background checks on all new hires
• Employee cyber education & prevention training
• Enforce strict password protocols with password managers
• Strict adherence to data security
• Deploy a SOC-2 data center like Connectria
• Complete annual audits
• 24/7 third-party network monitoring
• Maintain cyber risk coverage along with other insurance policies
• Promote the use of EFTPS for clients to validate timely payments

These days, data security needs to be an urgent concern within every business in every industry. No one’s immune to a data security breach or internal fraud.  

Selecting a Payroll Partner

Is ConnectPay the right payroll partner for you and your clients? That depends on your needs—but we’re happy to talk through what ConnectPay’s Accountant Partnership program looks like and how it helps CPAs make payroll and payroll taxes easier for themselves and their small business clients. Feel free to reach out with any specific questions you might have. You’ll always reach someone when you call during business hours. Let’s connect.

Drew Schildwachter is the Chief Operations Officer for ConnectPay. Drew joined the team in 2014 with years of experience as a lifeguard, contractor, video retail franchisee partner, operations director, entrepreneur, and turnaround specialist for small businesses. Drew specializes in communicating with entrepreneurs about industry challenges that they encounter, and how aligning the best practices in payroll and business administration can alleviate pain points for small business owners.