COVID-19 has changed the world in the space of just a few months. From online shopping and food delivery to cloud-based communications, it’s forcing many businesses to exit their comfort zone and accelerate the pace of digital adoption. Many will never look back as they reap the rewards of more efficient, paper-free ways of working and delivering services. According to our data, accounting practices are amongst those most likely to be overhauling systems to adapt to the new reality.
At a time of significant business uncertainty and mass remote working, it makes more sense than ever to look at new ways to add value for clients in this space.
A different world
According to the Office for National Statistics (ONS), nearly half (47%) of people in employment in April worked from home at least some of the time, and in some sectors and regions the figures were much higher. What enabled this rapid transformation? Digital, cloud-based technologies, especially online communications platforms. Microsoft boasted of seeing two years’ worth of digital transformation in just two months, for example.
Accounting is ripe for the same kind of digital disruption. In fact, although firms in the sector have historically been saddled with legacy, on-premises IT systems and manual processes, the government’s Making Tax Digital initiative had already been forcing many to become more cloud-centric. COVID-19 now appears to have accelerated this progress.
The COVID push
According to a recent PayDashboard poll of large accounting practices, 42% said they are now investing in technology to better support payroll teams and their clients. A further third (31%) said they’d make changes this year or next, with only 17% claiming that their current set-up is good enough already. This is good news: clients and their employees are crying out for more responsive, digital-centric payroll options. A CIPP report from 2019, for example, found that just 9% of staff want a paper payslip, with most (86%) favouring online access via an app/portal or email. There’s also an increasing appetite for additional information such as absence entitlements, workplace benefits and how tax calculations are made. Two fifths (40%) of respondents said they want the ability to drill down to the information they require.
The truth is that after years of stagnation, the payroll industry is really starting to accelerate its rate of digital transformation. It’s about moving beyond the issuing of payslips as a pure compliance measure and towards adding value for employees—to engage with and ensure that they feel valued. According to ADP, 79% of workers expect their employers to help them with their financial wellbeing, for example. There’s plenty to do: just 3% of workers polled by CIPP said they felt “proud” of their payslip and that it reflected the hard work they put in.
What does this mean for accounting firms? It represents a huge opportunity to drive revenue and client engagement by offering value-added payroll services. In fact, it comes at a time when more organisations may be looking to outsource the function in order to streamline their in-house capabilities.
One vendor claims that nearly a third (30%) of organisations have lost capacity in their payroll function of late, thanks to problems associated with remote working, staff illness, and the complexity of handling emergency government benefits.
For accountants keen to ride the digital wave to drive revenue and client satisfaction, the first job is finding a trusted technology partner to provide the functionality-rich platform that’s right for your firm. It should offer simple pricing, standards-based best practice security, and integrations with all major payroll software providers. Offering payroll info including deeper insights from a single portal will also add value for customers.
Winning new clients
But that’s not all: it’s also a good idea to differentiate your payroll service proposition on your website, ideally with a dedicated payroll micro-site to attract SMEs looking to outsource their payroll service or find a better provider. Pay attention to clearly defining the value proposition for start-ups on there as well, as many new businesses are launched in downturns. Firms can also look to partner with other professions to gain mutual referrals. Professional partnerships and referrals from HR, legal and other organisations may help to widen the net further.
The chances are that remote working and many other digital initiatives adopted by businesses will remain long after the pandemic recedes. In the nearer term, migrating payslip delivery to the cloud will also insulate your business from a second wave. The new normal is digital-first: embrace it now to maintain momentum and growth.
Laura Hughes, Head of Engagement, PayDashboard