The following “5 Keys” resulted from working with accounting firms for the last 15 years, while targeting the small- to medium-sized business market for their accounting business.
The “5 Keys” take the seemingly routine job of doing a businesses payroll and transform it into extraordinary profits, so that the payroll service becomes the reason for business to become a full service client of the accounting firm. In turn, the availability of payroll services becomes the main marketing engine for the firm.
We want to explore the resale value of the payroll clients you obtain and if you ever decided to sell your payroll business. In 2004 and 2005, we saw several indicators of what a payroll service with multiple clients is actually worth.
A recent sale consummated in the south USA involved a company that spent seven years developing their payroll business into grossing approximately $3.7 million yearly gross revenues and they walked away from the negotiating table with over $8.6 million. The firms that take five years to build up a payroll business of 200 to 300 payroll clients have sold for $600,000 to $900,000!
Delegation of payroll begins the process of tapping into the payroll opportunity and yields 100 dollars per hour and up.
Taking the payroll business of every existing business client raises the gross revenues of the accounting firm by 30 per cent across the board.
Payroll is almost pure profit when a client is already on a normal monthly accounting service.
Having a payroll service in an accounting firm is a natural marketing tool for the firm.
Utilizing payroll that gets accounting firms exposed to more established and larger clients.