Something is lacking in your current payroll provider. Maybe it is responsible for much of your payroll problems — too many paycheck errors, you could never get anyone on the phone or its services are too expensive. Or maybe you've simply outgrown each other — your company is expanding and it just can't keep up with the services you need. If so, you might be thinking about switching to a new payroll provider.
When making the switch to a new payroll provider, you want to know that your unmet needs will be satisfied by the new payroll provider. This means thoroughly researchig potential companies and seeking answers to the following questions.
When should I switch my payroll provider?
It's important that you check your existing contract for any termination clauses. For instance, if 30 days' notice is required, be sure to give it.
Ideally, you should switch to a new payroll provider either at the beginning of a new quarter or at the start of a new year, as this will result in less confusion and a more streamlined process.
For example, if you switch to a new payroll provider right after closing out the year, you and your new payroll provider can start with a clean slate while your old provider handles W-2 processing and the previous year's tax filings.
What information is needed to get started when switching my payroll provider?
The new payroll provider will let you know what it needs. Generally, you'll need to supply all of the information required for it to manage payroll on your behalf. This includes:
- Federal and state employer identification numbers (for tax withholding)
- Your bank's account and routing numbers (for direct deposit)
- Your employees' payroll records
- Quarter-to-date and year-to-date payroll summaries
How simple is the migration process?
This will dictate not only the length of the implementation but also how smoothly it will go. Make sure you will receive a dedicated representative whose job is to make migration to a new payroll provider as quick and painless as possible.
Will you teach me how to use your payroll system?
A good understanding of the new provider's technology is key to optimizing payroll management and improving your business practices. Therefore, it's essential that you are trained on how to use the new system. Training may be centered around the following:
How can I make the transition of payroll provider easier for employees?
Your employees may dread the change, as they wonder how it will affect their paychecks. Be sure to collaborate with the relevant managers and supervisors ahead of time to alleviate employees' fears.
Also, work toward producing timely, accurate paychecks from the outset. This can be achieved by running a mock payroll before going live with the new payroll provider. With a test run, you have the opportunity to not only familiarize yourself with the new system but also to spot and quash nascent glitches. If necessary, do multiple trial runs, as they will give you the confidence you need when it's time to forge ahead.