Switching Payroll Providers: What to Know When It's Time for Them to Go
Businesses are a lot like people. Over time their needs change. As a business grows or consolidates, it has different requirements for its staffing, management, and accounting. Because of this, sometimes new services are required over time. What used to work is outgrown and can no longer suffice. Other times it’s not your business that changes but your provider’s, and they no longer provide the same quality of service they used to. People can also make honest mistakes, and the service you thought sounded right for your company turns out to be an ill fit. All of these are potential reasons why you might need to find a new payroll provider for your company.
Look Before You Sign
Before you switch payroll providers, you want to make sure any new provider you’re considering will be a better fit than your current one. While doing your due diligence, consider the number and types of features and services a new provider offers. Make sure they’re going to meet the needs of your company, not just for the immediate future, but also for your long-term projections and goals. The whole reason for changing providers is that your current one isn’t giving your company what it requires, so you don’t want to find yourself in that same situation a few months down the line. Important qualities to check for (especially if your company is growing) include easy-to-use software, software integration, support services, low system outage frequency, the ability for employees to self-service, and additional services like human resources and timekeeping/scheduling.
It’s also acceptable and advisable to request a payroll demo from a potential new provider to make sure their service is going to be a good fit for your company. A written proposal is also a reasonable request, so you can provide your business partners and company stakeholders with comprehensive information on potential vendors.
Packing Up the Payroll
Once you find a good match and are ready to start the process of switching payroll providers, you want to make sure you do the necessary prep work. Switching payroll companies is a lot like switching insurance companies or personal doctors. There’s important information your new provider is going to need such as: your company’s legal name as it appears on your financial documents and tax filings, its legal address (which may be separate from its mailing address if your company has multiple locations or is a primarily digital entity), and its legal business type. Additional information you should request includes payroll records, employee information, your company’s federal employer ID number, the company’s state unemployment and withholding ids, staff W-2s, and a voided check from your current provider.
The best time to switch is at the end of a quarter or the end of the year. This will help make for a clean transition, rather than having a period with records from two different providers. Once you’re ready, provide notice to your existing provider and submit your information request.
Making the Change
As you start your contract with your new payroll provider, make sure to coordinate your tax filings with them. If your company has outside accounting services, keep them informed of the company’s change of service. Once your accountant is informed, your new provider has all the necessary information, and your tax filings are in order, you’re ready to go live with your new payroll service.
Switch Your Payroll Provider to Payroll Vault
For your next payroll service, consider Payroll Vault for your source of payroll solutions. We’re a boutique-style service provider with a variety of payroll and HR outsourcing solutions to provide your company with important and useful administrative tools. We provide you with custom payroll reporting, legal and regulatory compliance assurance, tax filing assistance, employee handbook tools, dedicated HR professionals, and more. Learn more about what we can do for your company by visiting your nearest Payroll Vault location today.