4 Issues That Arise When CPAs Choose a Low-Quality Payroll Partner

Partnering with a third-party provider to manage your clients payroll can relieve the pressure to keep up with compliance changes, free you up to focus on growing your firm, and unlock value by leveraging their expertise in the areas which fall outside your scope of service as a CPA. However, when CPAs partner with the wrong firm, this can create just as many problems, as the right firm stands to solve.

Lift HCM is an independent payroll provider that partners with CPAs across the midwest to deliver quality service to a growing list of mutual clients. Let’s take a closer look at some of the most common issues that arise when CPAs partner with the wrong provider to manage their clients’ payroll.

Issue #1. A Low-Quality Payroll Partner Holds Can Hold Your Clients Back From Growth

The specialized knowledge and experience a payroll provider brings to the table can make a valuable impact on your clients’ growth. That’s because human capital management (HCM) involves a broader scope of services that extends beyond a paycheck. They’re involved in everything from talent acquisition, employee engagement, evaluations, training, scheduling, attendance tracking, and more.

Supplying your clients with quality HCM services means applying this specialized knowledge to optimize their workforce and accelerate their growth. But while an effective payroll partner is uniquely equipped to help your clients achieve efficient growth, a sub-par provider is just as likely to hold clients back from realizing their business goals.

In this context, a sub-par service provider might be one who focuses on selling a package of services or suite of modules for their HCM software before considering your clients’ most immediate business needs. At the same time, you don’t want to partner with a provider who is unable to snap into action should your client go to them with problems that fall under the umbrella of human capital management.

Limiting a client's services exclusively to payroll or dropping the ball when providing others can stall your clients’ growth. In doing so, they can hamper the growth and mutual benefit of all parties involved.

Issue #2. A Low-Quality Payroll Partner Risks Damaging Client Relationships With Poor Support

Your clients have already learned they can depend on you for advice on their tax strategy. That is, in part, what makes them more likely to take you up on your recommendation when you introduce them to a provider who’s equipped to manage their payroll. However, when a client enters into a relationship with your payroll partner, they do so expecting to receive the same quality of service you’ve offered them.

If you provide your clients with a consistent, responsive point of contact to whom they can turn for decisive support when the need arises, that’s the kind of accessibility they’ll be expecting going into a relationship with any service provider you introduce them to. A bad payroll partner will fail to meet the standards for support you set as the referring service provider.

This is most often an issue with major payroll providers who hire support reps right out of college, only to leave their clients hanging when their reps move on to pursue new career opportunities. Falling short of delivering consistent, accurate, and timely support for your clients’ payroll risks painting you both in a bad light.

Issue #3. Low-Quality Payroll Partners Threaten to Cut CPAs Out of the Relationship

A good payroll partner should be just as willing to refer their clients to you as you are to refer your clients to them. It’s not hard to see why a CPA would want to say they partner with a major provider in the payroll space. However, it’s rare for these providers to send you any clients of their own.

More often than not, that’s because they offer in-house tax services. Once accountants refer their clients to those providers for payroll services, it’s not uncommon for the client to receive marketing collateral advertising their payroll provider’s in-house tax solutions which threaten to cut the referring CPA (i.e. “you”) out of the relationship.

Your payroll partners need to be equally committed to bringing just as much value to their end of the relationship as you bring to yours. Offering their own tax services will forever disincentivize them from referring their payroll clients to you.

Issue #4. A Low-Quality Payroll Provider Jeopardizes CPA Work With Unreliable Data

Payroll processing involves adherence to numerous regulations and tax laws. If your partner fails to comply with these regulations, it could result in audits, fines, and legal consequences for both the accountant and their clients.

There are several ways a payroll provider can fail to adequately handle data. Some payroll providers fail to successfully communicate which party is responsible for submitting completed forms and financial documents. This can lead to fines, penalties, and even legal liabilities.

We’ve seen providers forget to take things like child support and garnishments into account when processing payroll, only to pass that errant data to accountants when reporting their mutual clients’ taxes. Late payments, employee compensation errors, or confidentiality breaches can strain the accountant-client relationship, leading to client turnover and negative word-of-mouth.

Partner With a Payroll Provider Who is Equally Invested in Your Clients’ Success

A bad payroll partner can damage your relationship with clients, stall their growth, increase their risk of triggering audits and inspections, create more work for you as a CPA, and even push you out of the relationship as a service provider. That’s why, when searching for an effective payroll partner, you should seek out a provider who is both equally invested in and capable of contributing to your clients’ success.

Lift HCM is proud to maintain fruitful relationships with our accounting partners with whom we share a pool of thriving clients. If you’re in the market for a payroll partner you can trust to provide the highest quality service to your clients, we’re happy to help. Contact us online at info@lifthcm.com or over the phone at (630) 366-2600 to get the ball rolling.