What Payroll Innovation Says About Accountants’ Shifting Role

The shifting role of small business (SMB) accountants is largely driven by the increase in automated solutions available to business owners today. With machines now taking care of repetitive financial tasks, accountants have had to readjust their position from number-cruncher to value-adder to remain relevant.

The payroll function is rarely looked upon as an influence of these changes in the small business accounting sphere. However, Steven Jones, business development manager of U.K. payroll processing company Payescape, said this area of the back office may have a larger influence on how accountants operate than some may believe.

Payroll is not necessarily a core function of the accountant’s job, but, thanks to the often repetitive nature of the payroll process, many businesses want to hand the responsibility off to the accountant. This presents a few opportunities for the profession, Jones told PYMNTS in a recent interview.

FinTech solutions — including those that have disrupted the payroll sphere — have automated key financial functions for small businesses, and, in many cases, have taken away the traditional workload of a small business accountant.

“Customers are realizing, ‘What do I need an accountant for?'” Jones explained. “‘They’re just there for bookkeeping, bank reconciliation and payroll — what do I need you for when I can just do that myself?’ A lot of accountants have lost the vision of what an accountant should be, which is an advisor. A business growth manager. A finance director. A virtual CFO.”

Returning to that position enables an accountant to make more strategic decisions about what work they take on for their business clients, and what work they pass on to an automated solution.

Payescape recently launched its Accountants Partnership Program, an initiative that connects small business accountants to the company’s payroll technology — if those accountants choose to use technology to automate payroll for their clients. Jones noted that this is part of a broader shift in accounting: While FinTech may be seen as a force that takes work away from accountants, the industry is beginning to see this as a way to free up valuable time for accountants to step up to the role of advisor.

In the payroll landscape, while the majority of the processes are repetitive and can be managed with technology, there are also areas that could use the expertise of an accountant to add value to business clients. That’s particularly true when it comes to compliance and data security. The EU’s General Data Protection Regulation (GDPR) is a prime example, said Jones.

“GDPR is a big safety net for all customers and employees, so that’s one thing that a lot of accountants now have to adhere to, and make sure that they are using technology and data in compliance with GDPR,” he explained.

Payroll and tax-related regulations are also a strategic focus for accountants handling payroll for their customers. In the U.K., legislation related to employee pensions, and the market’s PAYE Modernization initiative (a payroll digitization effort that went into effect at the beginning of the year), are areas in which accountants can act as compliance and risk mitigation guides to SMBs. However, accountants cannot take on these value-added offerings if they are managing payroll manually.

“Payroll is a very resource-draining, time-consuming process, and it’s one of those ones that has to be done. There’s no way around it,” Jones said. “Payroll can be quite draining on accountants’ time.”

An accountant who wants to take on the role of “virtual CFO” for their client, yet has to manage payroll for 200 employees every month, is not likely to find the time to meet the demands of an elevated, strategic role.

Understanding where technology and automation can help — not hamper — an accountant’s position is a key part of embracing evolution. With the payroll function continuing to see new digital disruptions and changes, the accountant’s management of payroll will shift along with it. Jones pointed to the development of voice recognition and artificial intelligence technologies, and how they could further automate processes in the payroll function, human resources operations and small business back office.

For accountants, that means a continued shift in how they manage the demands of their small business clients, and provide value-added services that machines cannot. One of the biggest changes the industry will see, Jones noted, is the accountant’s migration from retroactive, historical data analysis to a forward-looking predictor of business performance.

“The role of accountant needs to be looking forward to help the business flourish by delivering services they need, and doing it in a time-saving manner,” he said. “They do that by using the technology around them to save time, and to spend more time with a customer to help the business grow.”