Many accounting firms still avoid in-house payroll based on outdated beliefs: that it’s too time-consuming, too difficult to staff, or simply not profitable.
But those assumptions no longer hold up.
Done right, payroll isn’t a drain on resources—it’s a growth engine. It can integrate seamlessly into existing services and deliver even more value for your clients. The result? Increased revenue and improved client retention.
Let’s debunk the biggest myths holding firms back and show what’s possible instead.
Myth #1: Payroll Is Too Time-Consuming
You want to focus your time on high-value advisory work not chasing payroll errors, tax tables, or compliance updates.
And you shouldn’t have to.
Manual processes and outdated software can drain your firm’s time and resources. But with advanced technology, payroll doesn’t need to be a time sink. It can become a reliable, streamlined part of your service mix.
With features like automated processing tasks and tax calculations, e-services, and streamlined reporting, IRIS Payroll eases your payroll workload. Your team spends less time troubleshooting and more time delivering insights that strengthen client relationships.
The demand is already there. Nearly 40% of clients want payroll support from their accounting partner. And according to a ThoughtLab survey, almost 50% of clients choose a CPA firm based on how intuitive its digital experience is.
When you deliver that experience, through better payroll tools and workflows, you strengthen client loyalty and improve margins. In fact, fewer than 7% of CPA firms say they’re maximizing the value of their tech stack. With IRIS, you can be one of the few that is.
Ready to let IRIS’ intuitive workflow and tech do the heavy lifting for your business’ payroll services? Learn more about our payroll software designed specifically for accounting firms and CPAs.
Myth #2: Payroll = Compliance Risk
We get it. Managing payroll can feel risky. For accounting firms, compliance concerns can make payroll seem more trouble than it’s worth, especially if past experiences have involved manual processes or unreliable outsourcing.
But an advanced payroll software platform is built for peace of mind.
With IRIS Payroll, you get built-in compliance checks, audit trails, and real-time updates that keep you aligned with federal, state, and local rules. As tax laws shift, the system adapts so you don’t have to worry about missing a filing deadline or getting hit with a fine.
Payroll is often your clients’ largest expense, so handling it accurately has a real impact on their financial health. Reliable payroll processes build trust by reducing costly errors and saving clients both time and money. This not only strengthens your relationship but also positions your firm as a true advisor who’s invested in your clients’ success and compliance.
Myth #3: It’s Not Worth the Profit
Some firms write off payroll as low-margin or not worth the effort. But done right, it’s one of the most consistent and scalable revenue streams in your business.
Payroll isn’t just a checkbox service. It’s a gateway to higher client retention, more bundled revenue, and deeper advisory opportunities.
A 2024 CPA.com survey of U.S. firms found that those offering higher-level advisory services—including payroll—earned over 30% more monthly recurring revenue than those that didn’t.
Take the example of Walton CPA. Initially, owner Twilla Walton saw payroll as “a time-consuming, low-profit margin proposition” and routinely referred it out. However, constant requests from corporate clients seeking consolidated bookkeeping and payroll services made her reconsider.
“I started looking at payroll from a different perspective. Instead of holding onto all the reasons not to offer payroll, I began to earnestly consider all the reasons I should,” she explained.
This shift in mindset led to the creation of a sister company, Your Payroll Department. The two businesses now operate in tandem, delivering integrated accounting, payroll, and Human Capital Management (HCM) services. The result? Payroll now accounts for 50% of their annual revenue—a stark contrast to the initial hesitation to offer it at all.
What Forward-Thinking Firms Are Doing Instead
Nearly 55% of accounting clients already purchase services in bundles. Offering payroll helps you meet those expectations and avoid client churn. Without it, you risk losing clients to competitors who offer a more complete package.
When you offer payroll with the right tech in place, it becomes a powerful way to strengthen relationships. You’re not just processing pay; you’re creating touchpoints for higher-value services, customization, and strategic advisory work.
Looking to build bundled or tiered service offerings? Payroll fits naturally and profitably. Even a 1% increase in pricing for specialized services can lead to a 12% margin gain. And increasing client retention by just 5% can boost profits by more than 25%.
Choosing Payroll as a Profitable Service Line
Payroll services are not just “worth it”—they’re integral to long-term growth and differentiation. Offering payroll can transform your firm, creating new revenue opportunities, enhancing client loyalty, and positioning you as a partner in your clients’ success. By integrating tools and workflows that streamline payroll operations, you can prove that this service not only supports profitability but also builds stronger client relationships.
It’s time to leave behind the myth that payroll doesn’t pay off and focus on how it can drive sustained success for your firm.
Ready to explore what’s possible? The right payroll technology partner doesn’t just reduce workload and compliance risk, it elevates your client experience, integrates seamlessly with your existing tools, and helps your firm grow.
Talk to a payroll expert today and learn how to turn payroll into a profit center for your firm.
