Accounting software changes, a need for accounting expertise and labor shortages are driving some businesses to outsource their payroll functions to accounting firms.
Outsourced payroll functions fall under the general label of “client advisory services” or similarly named operations — CAS, for short. This has been a growth area nationwide and for some Alabama accounting firms.
CAS has been the fastest growing area in accounting over the last three to five years, says Brandi Morgan, partner at Wilkins Miller and leader of the firm’s outsourced accounting services group. “It’s just growing tremendously,” she says, pointing to CPA.com’s abundant CAS resources for accounting firms.
Firms with CAS functions reported a median growth rate of 17% in the 2024 CAS benchmark survey report, according to CPA.com. Data was gleaned from more than 200 survey responses and continued an upward spiral from previous surveys.
“Here at Wilkins Miller, we are seeing that trend ourselves with the number of proposals we are receiving for outsourcing [financial] back office [work],” Morgan explains. “[Companies] are not wanting to hire internally anymore [for this work]. They are wanting an accounting firm to handle that for them.”
In the six or so years that Thornton Jamison has worked in JamisonMoneyFarmer‘s client accounting services area, he has seen steady growth in this segment, especially the last two years. The area covers sales tax, bookkeeping and payroll, he notes. Nonprofits have contributed “a good bit” to the rise in the firm’s payroll business, Jamison says. His six-person team assists clients with roughly 10 to 50 employees.
A big driver for outsourcing payroll, Jamison says, has been Intuit’s push to move its users to the cloud-based version of QuickBooks, a popular accounting software. Intuit develops and markets the product. Some accounting firms are helping clients with the transition to the online version.
With the QuickBooks desktop subscription, users must manually file and pay all the payroll taxes, Jamison explains, whereas QuickBooks Online automates this process. “That comes with its little share of challenges. But if it’s all set up right on the front end on QuickBooks Online, it’s really nice to have,” Jamison says, noting that his team monitors the client’s progress for needed corrections in the system and also helps with technical glitches. “We’ve seen a lot of people moving from desktop- to cloud-based software.”
Paywerx also has seen growth in its outsourced payroll business, says CEO Dawn Elliott, more than doubling its number of clients the past five years. Paywerx is part of Carr, Riggs & Ingram and has clients in about 45 states, Elliott says. The division was formed in 2019 to meet the expanding payroll needs of CRI’s clients, she explains.
Paywerx’s system provides more than payroll technology, offering features for an employee’s entire life cycle, Elliott says. This includes workforce management solutions including recruitment, onboarding, direct deposit, time and attendance, annual performance reviews and retirement processes, she says.
With Paywerx, employees can have electronic access to some of their information. For instance, an employee is car shopping on the weekend and needs a pay stub as proof of employment for a car loan. With electronic access to Paywerx, the employee can retrieve that pay stub without having to rely on someone in human resources or an office manager, Elliott notes.
“So, it’s not just about an employer’s need. It’s also about the employee’s need. And the more an employer can offer their employees, the more efficient they become,” she says.
Of course, the employer benefits, too, from having a system like Paywerx. “It’s giving the employer the opportunity to run their day-to-day business and not get tied up in payroll and tax filing functions,” Elliott explains.
At Jackson Thornton, payroll makes up a small part of the client advisory and accounting services — CAAS — offered to clients, according to Jeremy Moreland, leader of Jackson Thornton’s outsourced client accounting practice. But generally, the firm is focused on growing CAAS, he notes.
To that end, in 2024, Jackson Thornton acquired the CAAS company that Moreland and his business partner, Michael Shaw, founded.
The accounting function has gone beyond a single focus on compliance, Moreland says. “It’s become essential to decision-making, risk management and long-term growth. For many businesses, outsourcing these responsibilities to a CPA firm means getting access to expertise, stability and structure that’s really hard to build internally.”
In tandem with this shift is the shortage of accounting professionals in the United States, Moreland explains. Fewer CPAs are joining the profession while longtime CPAs are eyeing retirement. “[It’s become] a highly competitive labor market where businesses struggle to recruit and retain qualified accounting staff, especially outside major cities, where most of our clients are located,” he adds.
The CPA shortage particularly impacts small- and mid-sized companies, notes Moreland, due to salary constraints and staying abreast of shifting regulations and new technology.
Increasingly, Jackson Thornton’s clients note that outsourcing accounting and payroll is more of a strategic decision vs. a cost-cutting move, Moreland says, although cost is still a factor. “Businesses want insight, reliability and advisory support — not just someone to process transactions.”
Aimee Risser, CEO of Big Brothers Big Sisters of the Central Gulf Coast, points to the efficiencies that can be gained by outsourcing accounting and payroll. The nonprofit has been a client of firm Wilkins Miller for a decade, Risser says.
Before that, the organization was not using an accounting firm as it was part of another organization and handling a lot of its own accounting needs, she explains. “We realized we needed professional help and support and reached out to them. We have partnered with them ever since.”
Wilkins Miller assists with the nonprofit’s payroll function but also handles all of its bookkeeping services, Risser says, and both areas have become more streamlined due to the accounting firm’s suggestions.
“I just love them because they’re constantly thinking of ways that can positively affect my efficiency and the efficiency of our organization. At least once a year, they [say], ‘We’ve heard about this software that might help save time here or there.’ And I’m always game for trying anything because I feel like they are great about doing their research,” Risser explains.
After moving to a web-based payroll platform suggested by Wilkins Miller, Big Brothers Big Sisters transitioned from scanning and printing traditional timesheets to submitting them electronically to the accounting firm. This resulted in time savings for the nonprofit, Risser notes, providing her with more fundraising time, critical for the donor-supported organization.
The nonprofit’s services are free to the families and communities that it serves. “Thankfully, we’re able to do that because of other people’s generosity,” Risser explains. “We always want to be able to show that we’re good stewards [of that money]. Being on board with Wilkins Miller definitely helps us do that.”
Botts Innovative Research, an open-source software development firm for sensors and geospatial data in Huntsville, relies on Amber Stout for her expertise in government contracting, according to Mary Lynn Botts. Stout leads the CAS area for accounting firm Warren Averett.
Botts’ husband started the small government contractor. As one, the firm must adhere to many regulations and requirements, Botts explains. To get DCAA approval – Defense Contract Audit Agency – from the federal government, the firm had to undergo an “intense audit” of its accounting setup. The company was required to move from cash to accrual accounting, Botts says.
“We shopped a couple of different firms in town looking for someone who had that expertise. Not only did they [Stout and Warren Averett] have that expertise, they provided us with some information that no one had bothered to mention to us,” Botts notes.
For one, Stout told Botts about the Innovate Alabama grant and helped with the process. Upon receiving the grant, Botts’ firm was able to hire new people.
“As a small business, [you are] wearing many hats. You don’t have time to find out about these things,” Botts says. “[Warren Averett] looked beyond just providing traditional accounting for us. They were looking to invest with us in building and growing our business.”
Nancy Randall is a Tuscaloosa-based freelance contributor to Business Alabama.
This article appears in the April 2026 issue of Business Alabama.
