An overview on how withholding taxes on compensation are carried out by firms. Discusses BIR Forms 2316, 1601-C, 1604-C, and Alphalist.
Accounting firms in the Philippines looking to add more value to their services should rethink leveraging hr and payroll apps.
The COVID-19 pandemic caused global disruptions that changed the economic, business, and consumer landscape forever. In a blink of an eye, the way we work, do business, and live has become complicated – if not more.
Client demands and expectations have shifted along with consumer buying habits and spending priorities. Everyone turned to the Internet for everything – buying groceries, entertainment, and even social interaction.
Moreover, businesses were forced to work remotely and deal with the challenges of the new normal. While medium- to large-sized businesses were quick to pivot and adapt, many small businesses struggled to even survive.
Small businesses were already having issues with cashflows, compliance, and other financial matters even before the pandemic hit. Finding themselves suddenly overwhelmed with accounting challenges, they could only turn to their trusted accountants for advice.
What does this mean for accounting firms?
Accounting services providers offer a wide range of accounting and bookkeeping services. They also provide bespoke HR administration and payroll services to meet the needs of their clients. By outsourcing these processes, small businesses can reduce employee costs and focus on core business activities.
However, because of the pandemic, small businesses are looking for more high-level business solutions from accounting firms. From solving people problems to providing strategic advisory services and adjusting business models, the role of accountants is evolving rapidly.
Changes in tax and employment laws are also forcing accountants to step up and go beyond number crunching. Accountants need to focus on helping their clients overcome the challenges of the new normal and become holistic advisors.
However, accounting firms also had to face the business and work environment challenges caused by the pandemic. Accountants were also forced to move to remote work and find solutions to continue service delivery during lockdown periods.
To continue service delivery, accounting firms left the spreadsheet behind and adopted accounting technology and other digital solutions. Though there were some hesitation, accountants had to become flexible and optimize processes to meet the increasing demands for better services.
Accounting firms also had to upskill their employees and keep up with legal changes, while trying to pivot in the market. Though their automation efforts may be abrupt, they enabled accounting firms to continue serving their clients during a difficult time.
What is next for accounting firms?
Automation through digital solutions and cloud-based applications has been proven to help businesses reduce costs, risks, and errors. When applied to any business function, automation enabled businesses to provide accurate results at a shorter amount of time.
However, most accounting firms disregarded implementing automation due to concerns of it completely taking over the industry. In reality, automation will make accountants’ lives easier by taking away repetitive manual processes and time-intensive tasks.
In the Philippines, while outsourcing services providers offer automated accounting services, dedicated accounting firms were still using traditional methods. Because of this, even small businesses turned to onshore outsourcing for their accounting and bookkeeping. By doing so, they were able to remain compliant, save on overhead costs, and have more time for core activities.
Unfortunately, this left several accounting firms with fewer clients and the challenge of expanding services while driving more value. What’s worse, they now have competitors with longer experiences and in-depth knowledge of accounting technology and automation.
The pandemic may have pushed accounting firms to finally take the leap and embrace automation and upskill their employees. However, they have yet to identify its true value, and how it can help them expand their services.
To address the changing needs of small businesses, accountants in the Philippines must look at the opportunities automation can offer. This includes giving accountants more time for advising, problem-solving, and strategizing to help their clients thrive.
How can automation help accounting firms?
Automation can help accountants evolve and transform the way they do business to address the changing needs of their clients. It is the game-charger that will drive accountants to focus on providing business advice and financial expertise.
Automating routine and manual tasks can give accountants more time to focus on high value and critical financial activities. It will also enable accountants to perform more accurate data analysis and identify trends and insights to offer customized data-driven recommendations.
Accounting firms focused on providing advisory services can enjoy an increased revenue of up to 50%. Offering high-value business advisory services can also help transform your firm to a value-focused one.
Expanding your service offerings and increasing efficiencies can help you strengthen client relationships and improve satisfaction. Moreover, determining the services small businesses want and need can help you gain more clients in the new normal.
Accounting firms with automation tools in place, like payroll apps, also have the opportunity to offer an all-in-one financial solution. For example, they can provide both accounting and payroll for more efficient and cost-effective services.
How can payroll apps help accounting firms?
Small businesses often perform payroll activities themselves, engage with a separate payroll services provider or subscribe to a payroll app. While this helps small businesses shave off overhead costs, it often leads to increased work and risk for accounting firms.
Automation has significantly revolutionized payroll services with several cloud-based payroll apps offering full integration with accounting software. This enables accounting firms to simplify the payroll and accounting process, and meet ever changing tax and labor laws.
In the Philippines, accounting firms tend to avoid offering payroll services because it can be very time consuming, confusing, and prone to errors. Moreover, we are known for having one of the most complicated and complex pay calculations in the world.
However, because of automation, accounting firms can now offer payroll services with confidence. Philippine payroll apps have been developed to remove the complexity of our pay and benefits calculations. In addition, they enable accountants to:
- Import employee hours from any biometrics system or time in/out platform
- Disburse payments and payslips on time and accurately
- Update employee’s personal data
- Calculate tax and benefits automatically
- Send notifications to employees
- Meet different cut-off periods and salary schedules
- Avoid costly fees from errors or discrepancies
By offering payroll services, you can ensure your clients are complying with their legal obligations. In addition, keeping payroll in-house will help your clients avoid sharing sensitive information with other firms.
Using payroll apps to offer automated payroll services will also accounting firms become overall business advisors. It will also open more opportunities to gain new clients while strengthening the relationship with your existing ones.
Automation is definitely here to stay. As the customers’ and clients’ needs keep changing, the services market also needs to evolve to provide their requirements. This includes more accurate and faster services on top of more value-added services and high standards of quality.
How can Hurey help?
Hurey is the most scalable HR and payroll app in the Philippines. It is a sophisticated yet cost-effective HRIS solution built specifically for businesses in the Philippines.
We understand how critical it is for accounting firms to provide more value in this time of disruption and uncertainty. With Hurey, you can effectively meet the demands of your clients in today’s remote work environment while growing your business.
Click the link below to book a demo and start adding value to your services.
Share us on
The most scalable HR and Payroll app in the Philippines
Powered by PABACUS