Switching Payroll Providers: How to Prepare

Not happy with your payroll provider? Maybe it’s time to switch. Before you do, though, make sure you are thoroughly prepared in order to make the transition as smooth as possible.

The preliminaries – why are you leaving?


First, examine why you’re considering a switch in the first place. List the reasons you don’t like your current provider to help you determine the questions you need to ask new payroll providers you are considering.

Is your current provider inaccurate? Inattentive? Difficult to contact? Is your current system so cumbersome that your staffers need a lot of training before it can get up and running?

You may also want to ask questions, such as:

  • What is their experience? How many companies have they served and how long have they been in business?
  • Does their service consist of desktop software (that you’d have to update and maintain) or is it a Web-based system that is updated and maintained by the payroll processing company?
  • What kind of customer service do they offer? Will you get a dedicated specialist or just a toll-free technical support number?
  • What’s their onboarding process? How much time is needed to get your payroll operational?
  • How do they train your staff to use their system? What kind of time needs to be invested?
  • Is it a self-service system that your employees and management team can use as well as your payroll staff?
  • Can they help you keep up with compliance issues?
  • Can they grow as you do?
  • What kind of reports do they offer?


When’s the best time to switch?


Of course, switching at the end of a quarter or the beginning of the year is best. If you need to switch before that, ask your new payroll provider for advice. You’ll need to be set up in plenty of time to get out that first batch of checks.

This is also a good time update employee information and to back up data within your current system. This way when you transfer over to your new system, the information is current and you can start running payroll right away.

What information do you need?


If you’re currently using a payroll provider, you probably know already what you’ll need to provide.

Though not a complete list (talk to your new provider for that), the preliminaries are:

  • Your employees’ names, addresses and social security numbers
  • Deduction information (W-4 information)
  • Employees’ bank account information (for direct deposit)
  • Your federal, state and any other tax ID numbers
  • YTD and QTD totals
  • Voided check for your payroll or tax account
  • Copies of your tax forms from the previous quarter


What kind of service will you need?


Like all service companies, payroll providers will range in price. You need to determine if the cost is worth the services provided.

Your needs will depend on your staffing concerns, says John Kennedy, president of payroll services at Insperity.

“If you’re trying to ease your administrative burden, you may want to pursue a company with more complete services,” he says.

Some providers will be less expensive, but will also offer fewer services. That’s fine if you are a do-it-yourselfer with the staff and/or time to perform more of the administrative work on your end. If, however, you’d rather spend less time on payroll administration and more on your core business, you may want to find a firm with more personal services.

If you’re looking for a payroll provider who will help you ensure your payroll is complete, accurate and on time, while also providing unparalleled customer support, check out Insperity® Workforce Acceleration today.

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