The best time to switch providers is at the beginning of the year or the beginning of a quarter. It will make it easier to transfer your financial records and year-to-date information.
You can, however, switch payroll providers at any time. If you switch in the middle of a quarter, your new provider can help you input your previous payroll information to make sure your year-to-date information and tax forms are accurate.
What are the Steps Involved in Switching Payroll Providers?
If you’re thinking about switching providers, follow these steps to make the process as easy as possible.
1. Determine Why You’re Switching
Before you start the process, ask yourself why you want to switch. You might want to switch because your current provider is too expensive, doesn’t give you the customer support you need, or doesn’t offer the features you need. Make a list of reasons for leaving your current provider so you know what to look for in potential new providers.
2. Select a New Provider
Once you know why you’re leaving your current provider, start looking for a new payroll provider. Find someone who fits your budget and offers the features you need. Ask potential providers for product demos and trials to get hands-on experience and find the solution that works best for your small business.
3. Gather Everything You Need for the New Provider
Once you’re ready to make the switch, gather everything you’ll need for the new system, so you have it all in one place and can make the switch quickly and easily. You’ll need information like:
Employees’ names, birthdays, addresses, and social security numbers
Employees’ bank information (if you pay by direct deposit), salaries and wages, withholdings, and deductions
Year-to-date and quarter-to-date numbers for each employee
4. Enter Everything into the New System
Now that you have everything gathered in one place, it’s time to enter it all in your new payroll system. Don’t be afraid to ask questions during this step to make sure you’re setting everything up correctly. It’s important to get it right the first time so you don’t have to correct mistakes later.
5. Close Your Account with Your Previous Provider
Ask your previous provider for copies of your payroll register reports and tax forms, then close your account with them. You want to make sure you’re not getting charged for something you’re not using.
6. Run Your First Payroll
If you’re switching providers at the beginning of the year or the quarter, go ahead and run your last payroll of the previous year or quarter with your current provider. Then, run your first payroll of the new year or quarter with your new system to get a fresh start.