Should you involve your accountant before selecting payroll software? Absolutely—and doing so could save you thousands in penalties, rework, and compliance exposure.
Accountants identify payroll issues before they become expensive problems. They track tax deposit errors, catch compliance gaps early, and spot system limitations that HR teams often overlook. With Client Advisory Services (CAS) revenues growing 61% since 2022, accountants now actively guide payroll and HR technology decisions—not just financial reporting and tax preparation.
This article reveals the five specific questions your accountant wishes you'd ask before selecting payroll software, how to uncover hidden operating costs, and why their perspective reduces risk more effectively than vendor demos alone.
At Lift HCM, we support employers who experience recurring payroll issues that trace back to system limitations rather than employee mistakes. Accountants see these patterns even earlier. As they expand into broader advisory services, they've become the first professionals to notice financial discrepancies, audit exposures, and workflow breakdowns rooted in payroll and HR technology.
🎯 Quick Answer: The Top 5 Questions to Ask Your Accountant
Before selecting payroll technology, ask your accountant:
1. Where do you see risk in our current payroll tax deposits?
2. Which manual steps cause the most rework for you?
3. What labor and overtime trends appear in our data?
4. Which HCM platforms perform best for your clients?
5. How should we measure ROI on better payroll technology?
These questions reveal compliance gaps, hidden costs, and real-world platform performance—insights unavailable during vendor sales demos.
Table of Contents
Over the past five years, accounting firms have rapidly expanded beyond bookkeeping and tax preparation into broader advisory services. These services—known as Client Advisory Services (CAS)—focus on helping organizations improve operations, technology, analytics, and internal processes.
According to the 2024 AICPA & CPA CAS Benchmark Survey, CAS revenues have grown 61% since 2022, and firms report a median 17% annual growth rate in advisory work. Many expect nearly 99% cumulative growth in the next three years. This shift isn’t just a trend—it reflects the evolving expectations business owners now place on their accountants.
Why this matters to you:
Your accountant sees where entries break, where reconciliations stall, and where audits get risky. Recommending payroll and HR technology is a natural next step toward cleaner data and lower risk.
Payroll mistakes create immediate disruption for employees and long-term expense for employers. In isolved's 2024 HR Trends Report, payroll ranked as the number one HR process requiring improvement, driven partly by the fact that 55% of employees live paycheck-to-paycheck. Even small errors immediately damage trust.
Accountants see the operational fallout when these issues repeat. Each correction ripples across the general ledger, financial statements, and forecasting models. Inconsistent earning codes, manual adjustments, and delayed deposits weaken audit readiness and increase exposure to penalties.
Organizations typically spend 15-30% of payroll operating costs managing preventable errors through manual corrections, emergency payments, reconciliation delays, and penalty response. These hidden costs rarely appear in vendor pricing comparisons but significantly impact total cost of ownership.
Accountants track risks that directly affect cash flow and organizational reputation. Three compliance areas consistently demand attention in payroll system evaluation.
Late or incorrect payroll tax deposits trigger IRS penalties that escalate quickly. The IRS outlines a Failure to Deposit penalty scale that reaches 10% for deposits more than 15 days late and 15% if the IRS issues a notice and demand. State tax agencies often impose additional penalties that compound federal costs.
⚠️ Compliance Alert: A $50,000 late payroll tax deposit can generate a $7,500 penalty at the 15% rate—a cost that automation prevents entirely.
Modern payroll technology with automated tax calendars, deposit scheduling, and filing confirmations reduces exposure substantially. Your accountant recognizes which systems provide adequate protection and which create unnecessary risk.
Applicable Large Employers (ALEs), defined as employers with an average of at least 50 full-time employees (including full-time equivalents), face two main types of Affordable Care Act (ACA) provisions and associated potential penalties under Internal Revenue Code section 4980H. For 2025, penalty amounts range from $2,900 to $4,350 per affected employee. An organization with 100 employees faces potential annual exposure exceeding $435,000.
An HCM platform that tracks eligibility automatically, produces accurate 1094-C and 1095-C forms, and alerts on affordability thresholds reduces both compliance risk and administrative rework. Your accountant knows which platforms handle ACA reporting reliably because they review the output during tax season.
COBRA compliance failures generate excise taxes under Internal Revenue Code 4980B. The statute establishes penalties of $100 per day per qualified beneficiary or $200 per family during non-compliance periods, with statutory caps for unintentional failures. Separate from excise taxes, courts impose penalties under ERISA of up to $110 per day for failures related to notices and document requests.
💰 Hidden Cost: COBRA penalties accumulate daily. A 90-day compliance lapse for a family generates $18,000 in exposure before considering ERISA penalties—costs that proper technology prevents.
A payroll system that triggers qualifying event notices automatically, tracks elections accurately, and maintains proof of delivery documentation helps your organization maintain compliance and avoid costly violations.
Accountants rarely offer software advice unless they’ve witnessed the impact of a poor system. These five questions bring out their perspective and help you make a more informed decision.
What your accountant will tell you: Most payroll risk concentrates in three areas: late tax deposits that trigger IRS penalties reaching 10-15%, inconsistent earning codes that disrupt financial reporting, and disconnected systems that break audit trails.
Your accountant reviews every payroll tax filing and deposit schedule. They spot patterns in late submissions, notice when deposit timing slips, and track state penalty notices before they reach your desk. The IRS Failure-to-Deposit penalty escalates from 2% for deposits 1-5 days late to 15% after IRS notice and demand. State penalties often compound these federal costs.
A modern payroll system limits this exposure by automating tax deposit schedules, creating clear audit trails, syncing payroll data with accounting records, maintaining consistent rules for earning codes, and connecting payroll accuracy directly to audit readiness.
💡 Pro Insight: Accountants typically identify 3-5 payroll risks within 15 minutes of reviewing your current system—risks that often go unnoticed for months until penalty notices arrive.
Why this question matters:
Identifying compliance gaps early allows you to quantify the cost of inaction rather than discovering problems during audits. Your accountant's response reveals whether your current technology exposes you to unnecessary penalties or creates rework that inflates operating costs. This question connects payroll accuracy directly to financial reporting quality and audit preparedness.
What your accountant will tell you: Manual processes create predictable failure points. The most common rework sources include manual adjustments to timecard totals, repeated updates to accrual balances, inconsistent job or pay rate changes, and difficulty connecting payroll data to general ledger entries.
Many HR teams rely on spreadsheets, shared folders, and manual updates to track hours, rates, job changes, and benefits enrollment. Each manual step increases the likelihood of errors that accountants must correct during reconciliation. When journal entries don't align or when deductions fail to match carrier invoices, accountants spend hours investigating discrepancies that automation would prevent.
Ask your accountant where they encounter repeated breakdowns. Their response often reveals whether your current technology creates extra work for both HR and Finance departments or whether it supports accurate, efficient operations.
Common red flags your accountant notices:
Manual adjustments appearing frequently in payroll registers signal that your time and attendance system doesn't integrate properly with payroll processing. Repeated updates to accrual balances suggest your system lacks automated tracking for PTO, sick time, and other leave types. Inconsistent job or pay rate changes indicate workflow approvals aren't functioning properly. Difficulty connecting payroll data to ledger entries reveals integration gaps that create reconciliation bottlenecks.
Why this question matters:
This question uncovers hidden operating expenses that don't appear in vendor pricing comparisons. It highlights where automation supports accuracy and reduces total cost of ownership. Most importantly, it aligns Finance and HR departments around shared operational objectives rather than maintaining siloed processes that create friction.
What your accountant will tell you: Labor represents your most significant operational expense. Your accountant analyzes these numbers regularly and often spots trends that HR or operations departments overlook—patterns in overtime concentration, seasonal staffing fluctuations, wage compression issues, or job costing inaccuracies that affect project profitability.
Modern HCM systems provide dashboards that surface these insights instantly. When both Finance and HR share a single system of record, workforce planning improves and decisions become more informed by real-time data rather than delayed reporting.
Your accountant notices when overtime concentrates in specific departments, suggesting either understaffing or inefficient scheduling. They identify seasonal patterns that should inform hiring decisions months in advance. They catch wage compression before it becomes a retention problem. They spot job costing errors that distort project profitability analysis.
Why this question matters:
This question encourages proactive workforce planning rather than reactive problem-solving. It surfaces compliance concerns early, particularly around overtime calculation and proper worker classification. It strengthens labor cost budgeting and forecasting by incorporating trends your accountant already observes but may not be asked to share.
What your accountant will tell you: Accountants interact with dozens of payroll and HCM systems across their client portfolios. They know which systems consistently produce accurate data, support reliable tax filings, and generate clean year-end reports. They also know which platforms lead to repeated cleanup work, manual coding requirements, and unpredictable reporting outputs.
Ask your accountant which platforms produce reliable outcomes. Their guidance provides direct insight from someone who handles the results weekly rather than quarterly. This perspective helps you avoid systems that appear impressive during sales demonstrations but fall short during real-world implementation and ongoing operations.
Why this question matters:
This question helps you avoid systems that create ongoing accounting complications and positions you to select platforms known for accuracy, reliability, and clean integrations. It grounds your technology decision in real-world outcomes rather than vendor marketing claims or feature checklists that don't reflect operational reality.
What your accountant will tell you: ROI for payroll and HR systems extends far beyond subscription fees. Your accountant evaluates returns by examining hours saved through automation, corrections eliminated through improved accuracy, penalties avoided through better compliance, and improvements in financial reporting quality.
Ask your accountant to help quantify the time spent correcting payroll errors, the cost of overnight checks or emergency payments, the expense of tax notices or penalty fees, the hours lost reconciling time and payroll systems, and the delays in monthly close or budgeting cycles caused by payroll data quality issues.
Why this question matters:
This question highlights the financial impact of automation beyond simple cost comparisons. It supports measurable technology investments based on documented savings rather than subjective assessments. Most importantly, it connects payroll system improvements to broader strategic goals around financial accuracy, compliance management, and operational efficiency.
Q: Should I involve my accountant in payroll software selection?
Yes. Accountants observe payroll system performance across multiple clients and platforms, giving them unique insight into which systems create clean data, support accurate filings, and avoid costly rework. Their perspective complements vendor demonstrations with real-world performance data that becomes apparent only after implementation. Accountants identify issues during system evaluation that HR teams often don't discover until months into operation.
Q: When should I consult my accountant about payroll technology?
Consult your accountant before requesting vendor demos. Their input helps you evaluate platforms based on financial accuracy, compliance support, and reporting quality—factors that significantly affect total cost of ownership but don't appear prominently in marketing materials. Accountants help you ask better questions during demonstrations and identify red flags that sales presentations typically avoid.
Q: What payroll compliance risks does my accountant monitor?
Accountants track payroll tax deposit timing, ACA reporting accuracy, COBRA administration compliance, wage calculation errors, overtime computation accuracy, and audit trail completeness. These risks directly impact financial statements, penalty exposure, and year-end reporting quality. Accountants notice compliance gaps months before they generate penalty notices or audit findings.
Q: How much can poor payroll technology cost?
Organizations spend 15-30% of payroll operating costs on corrections, manual workarounds, emergency payments, and penalty response when using outdated or disconnected systems. IRS late deposit penalties alone reach 10-15% of unpaid taxes. ACA penalties range from $2,900-$4,350 per affected employee. COBRA failures generate $100-$200 per day per beneficiary. These costs compound quickly and rarely appear in initial technology budgets.
Q: Which payroll systems do accountants recommend?
Accountants favor platforms with automated tax calendars, clean general ledger integration, consistent audit trails, and reliable year-end reporting. Rather than asking for generic recommendations, ask your accountant which specific systems their other clients use successfully—they've observed the results over multiple pay cycles and tax seasons. Platforms that accountants recommend typically save them 5-10 hours of monthly rework, indicating superior data quality and integration.
Q: What happens if I choose payroll software without my accountant's input?
Selecting payroll software without consulting your accountant increases the risk of choosing systems that create financial reporting complications, require extensive reconciliation work, or lack adequate compliance safeguards. You may discover these limitations only after implementation, when switching costs are substantial and operational disruption is significant. Accountants help you avoid expensive mistakes by identifying potential problems during evaluation rather than after deployment.
The right payroll system doesn't simply automate paychecks. It drives compliance, supports accurate financial reporting, creates audit-ready documentation, and builds trust within your workforce. Your accountant's perspective helps you evaluate these strategic benefits alongside basic functionality requirements.
Modern payroll technology eliminates recurring compliance concerns, reduces hidden operating costs, and strengthens your financial foundation. When you involve your accountant in the selection process, you gain access to insights that vendor demonstrations cannot provide—real-world performance data across multiple organizations and platforms.
If you're ready to eliminate recurring payroll concerns and build a stronger financial foundation for your organization, connect with Lift HCM today. Our experts answer your questions, review your current system objectively, and help you build a smarter payroll and HR infrastructure—so you can focus on growth with confidence.
Ready to Strengthen Your Payroll Foundation? Don't wait until the next compliance deadline or penalty notice. Schedule your consultation with Lift HCM and experience the difference that true partnership and proven expertise deliver. We work alongside your accounting team to ensure your payroll technology supports both operational efficiency and financial accuracy.