Can Accounting Firms Profit From Payroll?
Can firms really profit from processing payroll? Crunching the numbers can help determine whether it’s worth the effort. Following is a sample analysis provided by Michelle L. Long, CPA, owner of M. Long Consulting, including some of the factors to consider. Assume a firm has 50 clients with an average of 10 employees; a gross billing average of $1,500 per client ($75,000 annually); a part-time payroll processor working 15 to 20 hours per week at $15 per hour plus 35 percent benefits ($21,060 annually). Also include the cost of roughly one hour per week of accountant review time ($200 per hour) and the cost of marketing, software, supplies and other fees ($10,000). Revenue: $75,000 Salary: -$21,060 Review: -$10,000 Costs: -$10,000 Gross Profit = $33,940. Long suggests recalculating this for different numbers of clients, to keep in mind different salaries and costs of service may apply based on geographical location and to examine which vendors offer wholesale pricing or software discou
