Switching Payroll Companies
In the past, companies considering switching their payroll services had to wait until the end (or beginning) of the fiscal year. With all of the paperwork involved and tax information that needs to be processed, it was too chaotic to do it any other time of the year. Thanks to modern technology and electronic recordkeeping, you can now switch payroll companies mid-year, or any time of the year that you desire.
Switch Services at Your Convenience
If you have been considering switching payroll companies, but are hesitating because the fiscal year is already in process, you don’t have to wait any longer. Just go for it, because it’s about doing what is best for your company in the present moment. Yes, it may be simpler to do it at certain times of the year, but it is not a difficult process regardless of when your company chooses to switch.
Payroll processing companies no longer have to input data manually and deal with the hassle of transferring physical records. There aren’t piles of forms and documents required, and today’s online services are more efficient and cost-effective than traditional payroll services. Even small providers who don’t operate entirely online will still have an electronic database of records for your company’s payroll services that can be easily transferred.
Reasons for Switching Payroll Companies
The reason is almost as important as knowing when to switch payroll providers. Of course, there are plenty of reasons that people switch providers:
- Dissatisfaction with the current payroll company
- Upgrading to a payroll service from online or software program
- Your current provider can no longer handle the payroll needs of the growing organization
- Additional customer service or user support is desired
- Looking for collaborative HR services, not just payroll processing
Some people are just coming into the payroll services industry after years of managing their own payroll. There are plenty of benefits to be had by using these services for those who haven’t before. However, even those who are just switching services will find plenty of benefits from at least reviewing the options and considering a new provider.
When to Switch for Best Results
The optimal time to switch payroll companies is still at the beginning of the fiscal year. Basic rules of business advise that any vendor or service provider changes should be completed as close to the beginning of the fiscal year to help streamline things for tax time. However, the availability of electronic services is helping to change that. Just because this is the best time doesn’t mean that it is the only time you can switch.
You really can change payroll providers whenever it suits your organization. However, there are certain times that it will be easier to make the transition. The second best time to change providers is on a quarterly basis, which gives you four opportunities throughout the year to consider a transition to a new payroll service. Although you can switch services at your convenience, for the most part, doing it during these specific times will make tax time and other transitions much easier.
How to Make the Transition Smoothly
Now that you’ve decided that it’s time to switch payroll companies, there are some steps you can take to make the entire process smoother for everyone involved. Your first task will be to find a reputable provider (if you haven’t already) that can meet the payroll processing needs of your organization. Ask important questions like:
- How long have they been in business?
- Do they have references or reviews available?
- Are agents available 24/7?
- How does the transition process take place?
- Will they assist with compliance issues like new tax and payroll laws and regulations?
- How many customer service agents are on staff?
- Do you get a dedicated agent for your account?
- What services do they provide?
Once you’ve used these questions to help you narrow down your options, you can get started on the process of transitioning. Take a minute to check your current contract if you are already working with a different payroll service. Make sure that they don’t have you locked into a specific time frame or have penalties or other restrictions regarding leaving their service. Also, check to see how much notice they need before you switch. Most companies want 30 days notice to allow you to leave.
The good news is that increasing competition in the online world means there are fewer companies imposing strict contract timelines and other contract restrictions. It may be easier than you think to leave your current provider for a new one, but make sure that you read all of the fine print before jumping in.
Once you have confirmed that you aren’t violating a contract, you can set up a contract with your new provider and cancel the old one. Then, you will need to complete all of the paperwork from the new provider, including banking, legal, and other authorization paperwork. This will allow the payroll service to write checks, pay employment taxes, and perform other payroll-related tasks on your behalf. Once the new system has been set up, either by yourself or your payroll service provider, you just need to compare it to your current records to ensure that everything is accurate.
Whether you’re looking for better pricing or are just generally dissatisfied with your current provider, switching is a reasonable solution at any time of year. Most providers are eager for your business and will make the process easy, no matter when you transition. Take advantage of this to maximize your benefits from switching payroll companies.
When considering transitioning to a new payroll company, contact guHRoo (formerly ERG) Payroll & HR to learn how our collaborative HR solutions can benefit both you and your business.