Switching Payroll Companies Is Easier Than You Think
When is the best time to switch payroll companies? A few years ago, the answer would be to wait until the end of the year (or fiscal year) or at the very least, the end of the quarter. Now the answer is, pretty much whenever you feel the need to move forward.
Years ago, switching companies was a nightmare, involving hours of manually transferring employee and payroll data from one company into the account of another. But today, with advanced technology and cloud-based computing, it’s no longer that labor intensive a process. Still, there are steps you need to take in order to ensure a smooth transition. Here are five things you should do:
- Make sure you’re choosing the right new company for your business
There are a number of payroll companies out there, each with its own list of services, features and fees. Before you choose one, ask yourself what you want from your new company that your current one isn’t supplying. A better reporting system? Round-the-clock customer service? Human Capital Management capabilities? Ask anycandidates specifically what services they’ll provide, if they are equipped to help with compliance issues, and who your agent will be (one rep or a team). Also, ask if there’s a client you can call for a reference.
- Notify the outgoing company
Before you cancel service with your current company, take a look at your contract with them. It will lay out how much notice you need to give and what the penalties may be for canceling early. After you’ve reviewed your contract/subscription agreement, notify them that you’re making the switch. Some companies only require a phone call, though you may need to mail a letter of cancellation. Sample letters can be found here.
- Begin the onboarding process withyour new company
Once you’ve hired a new payroll company, you need to start the process of setting up your business into their system, beginning with general information such as your company’s name, address, business structure, EIN and bank information. You also need to provide personal information about your employees and contractors.
- Gather necessary documents from your current company
Along with the basic information you’ll provide to your new payroll service, you need to get data from the existing company, such as the payroll journal for all staff (including contractors and terminated employees) as well as tax information going back to the beginning of the calendar year. Ask your new payroll company if there’s any assistance it can offer to make the switch easier for you. You’ll find that your new company will likely be happy to help you out!
- Track your outgoing company
While it’s likely your current payroll company will understand that all year-end reports will now be handled by the new company, it’s not a bad idea to put that in writing to eliminate any confusion. The last thing you want is two separate year-end reports filed, which could potentially trigger an audit and a number of other headaches.
These steps will help ease the administrative challenges of making the switch to a new payroll company. At Accu Data Workforce Solutions, we can make your payroll transition as simple as possible, using our 30+ years of experience as a leading provider of payroll and Human Capital Management. Contact us today for a free payroll consultation and to learn about our other HCM solutions, including Human Resources, Time & Attendance, Benefits Administration and ACA Compliance.