Practice managers will see a lift in the value of payroll services over the next few years. Particularly if they pay attention to five key factors, writes Scot Meek.
Each week, I travel around New Zealand talking with practices big and small about payroll.
Usually, after we’re done talking payday filing, I’m asked what the next big thing or trend is. It makes sense to ask, as change seems constant in our digital world, and savvy practice managers need to stay ahead of the curve – for their own sake and their clients.
The five factors below are those I see as having the biggest impact on payroll in the 2020 financial year. Practice managers who can make the most of these are likely to realise substantial growth in the value of their payroll services over the next 12-24 months.
The new generation of entrepreneurs and business owners are challenging traditional business models and doing things differently.
MYOB supports a lot of Kiwi startup events and activities and none of the people I meet in this area are looking to become payroll experts (or accounting experts for that matter).
They’re well-aware of the benefits of getting good business advice and outsourcing business tasks (where it makes sense). Frankly, they benefit a great deal more from focussing their time on core business activities – not tasks like payroll admin.
Mandatory payday filing has driven an increase in the number of businesses outsourcing their payroll – that’s what I’m hearing from practices. As businesses look at where their time is best spent, this move to outsource payroll will only increase.
A key element of how successful a business’s digital transformation is, is how well their digital tools work together.
True integration in the payroll sense only happens when different software products complement each other and share data seamlessly, without the need for manual intervention.
At the business end, there are growing numbers of Kiwi SMEs using timesheet apps integrated with their payroll software to remove manual processing and save time for employees and payroll administrators alike.
Digitally savvy businesses are also moving towards integrated payroll and accounting solutions, rather than separate products.
At the practice end, integrated technologies are growing in their importance and value. Tools like MYOB Advisor use artificial intelligence to produce advisory insights from data collected from integrated software such as MYOB Essentials.
Integrating payroll software will allow cutting-edge technology like this to yield even more valuable insights.
Automation, especially in the compliance area, is becoming more commonplace as accounting and payroll software continues to develop.
Online software and features like MYOB PayAgent now make it possible for a practice to fully automate the payments process for clients.
In addition, apps like MYOB YourPay remove the manual processing of timesheets, saving time and reducing errors.
For businesses, this means more time to work on the business, rather than in it. For practices, it can improve margins, free up time to for high value work, such as advisory, or even allow a practice to scale up with the same number of people.
Technology reduces the time required for traditional compliance tasks, while greater integration and automation is increasing the opportunity for practices to scale up payroll services – often without increasing staff numbers.
An increasing number of the practices I talk with are in the process of scaling up their payroll services to capitalise because of the time freed up by technology. These practices also enjoy the benefits of the regular recurring income that can come with payroll.
Many practices are developing their business advisory services to add greater value, build stronger client relationships, help their clients grow and, in turn, add new revenue streams. There is no reason why payroll advisory can’t be part of this.
Given all the noise that mandatory payday filing has created, there has never been a better time to grow in this area. Depending on your level of expertise in your practice, you could advise clients on:
Those are the factors driving a lot of the change in the payroll space for practices.
Insight on general trends like this is all well and good, but what does it mean for practices across New Zealand? Opportunity.
That’s it, in a nutshell. Whether you currently offer payroll services or are looking to start, payroll presents a great opportunity for your practice.
If you want to talk about how you can make the most of the opportunities in payroll, contact your MYOB Partner Manager today.