Let’s face it, switching payroll providers is a big deal. It’s a lot like changing your cell phone provider (or your internet provider, or your cable TV provider). You’re probably not looking forward to it, but you know you need to do it. Perhaps your current provider isn’t meeting your needs, or maybe you’ve outgrown their services. Whatever the reason, switching payroll providers can be a daunting task. But like all major changes in life, there are some things you can do to make the process go more smoothly.
Here are 10 tips for small businesses considering a payroll provider switch.
- Do your research. Just as you wouldn’t switch internet providers without first doing your homework, don’t switch payroll providers without thoroughly evaluating your options. Check online reviews, talk to other small business owners, get recommendations from trusted sources, and take advantage of product tours and demos.
- Make a list of must-haves. Identify the features that are essential for your business and ensure any potential new payroll providers can meet those needs. Failing to do so could lead to frustration later on. Consider questions such as:
- Do you require tax filing, direct deposit, and employee self-service?
- Do you need scheduling and time clocks that can integrate with your point-of-sale system?
- Do you need a system that can easily manage shift differentials or tip credits?
- Do you want to provide on-demand pay (earned wage access) to your employees?
- Get price quotes from multiple providers. Don’t settle for the first provider you contact. Obtain quotes from several vendors to compare prices and services. Ideally, ask if they offer free trial periods to test the solution and determine if it’s a good fit before making a final decision.
- About set-up fees and monthly charges upfront. Avoid surprises by clarifying set-up fees and ongoing monthly charges. Inquire whether the company charges a flat monthly fee or per-employee fees. Understanding these costs in advance helps prevent unexpected expenses.
- Find out how long the implementation process will take. Implementation times can vary significantly. Some payroll providers can set up your account within days, while others might take weeks or even months. Confirm the expected timeline and whether the provider will assist you throughout the process.
- Ask about support options. Once your account is active, it’s important to know who will be available to address your questions and help resolve any issues. Inquire about training and support options before finalizing your choice.
- Make sure data migration is included in the price quoted. One of the major hassles of switching payroll providers is manually entering employee data into the new system. To avoid this inconvenience, ensure that data migration is included in the quoted price by the new provider.
- Find out if direct deposit or pay cards are available. If the provider doesn’t offer these options, you may want to continue your search. Dealing with paper checks can be cumbersome and inefficient.
- Ask whether or not time tracking is included. For businesses that pay employees hourly, time tracking is crucial. If it’s not included in the provider’s package, it may be worth paying a bit extra to include this feature.
- Compare apples to apples. When reviewing quotes from different providers, make sure you’re comparing similar services. While price is important, selecting the best possible service for your business is key, even if it costs a bit more each month.
Additional Questions to Ask a Potential Payroll Provider
How easy is your software to use? Payroll software should be user-friendly and intuitive for everyone involved, from administrators to hourly employees. Inquire about the software’s user interface and ask what training and support are available to help you and your team use the system effectively.
How secure is your software? Data security is crucial for any business, so it’s important to ensure that the provider you choose has strong security measures. Ask about their data encryption practices, disaster recovery plans, and other security protocols they have in place.
What is your customer support like? When issues arise, you need a payroll provider with responsive customer support. Ask about the provider’s support options, including phone, email, or chat. Additionally, inquire about their response times and whether they offer dedicated account managers or support teams.
How to Switch to a New Payroll Provider
Set your goals and objectives: Clearly define your goals and objectives for transitioning to the new payroll system. This will help your new provider understand your needs and tailor the implementation process to fit your business.
Designate a project manager: Appoint a project manager from your team who will oversee the implementation process. This person will be the main point of contact between your business and the implementation team.
Gather required data and documents: Collect all relevant payroll data and documents, including employee information, salary structures, tax details, benefits, and deductions. Ensure that all information is accurate and current.
Data migration and input: Your implementation specialist will assist with migrating your payroll data to the new system. This includes uploading data and documents, setting up tax tables, and configuring pay cycles and payroll policies.
System configuration and customization: The new provider will configure and customize the payroll software according to your business’s specific needs. This may involve setting up user roles and permissions, creating approval workflows, and integrating with existing systems such as point-of-sale (POS) or enterprise resource planning (ERP) software.
Training and support: The integration team should offer training sessions, user guides, and video tutorials to ensure your staff are proficient with the new payroll software.
Parallel testing and validation: Before going live, conduct a parallel test by processing payroll using both the old and new systems. This will help identify any discrepancies or issues, allowing the implementation team to resolve them before the official launch.
Go-live and transition: After completing testing and making necessary adjustments, you’ll be ready to launch the new payroll software. The implementation specialist should support you during this transition to ensure a smooth implementation.
Post-implementation review: Following the transition, perform a post-implementation review to evaluate the project’s success and identify areas for improvement. Gather feedback from all users (not just administrators) to ensure satisfaction with the new system.
Switching payroll providers is a significant decision, but these tips can help make the process smoother. By conducting thorough research, comparing pricing quotes, and selecting a provider that meets your business’s needs, you can make the transition relatively hassle-free and potentially save money in the long run.
