When Is the Best Time to Switch Payroll Services?
While it may feel like there’s no good time to switch payroll providers, January 1st is your best bet for the most seamless transition. Why? Because you won’t need to transfer any tax data, which significantly lowers the risk of errors. All you will need to share with your new provider is employee information.
When you switch to a new provider simultaneously, it will be easier to comply with new tax laws, train new hires, and input clean data with as little hassle as possible.
On the other hand, if you choose to switch providers mid-year, you’ll need to submit the year’s data from your old provider, information on employees that may no longer be with the company, and they’ll have to issue you a refund for any money you had set aside for quarterly taxes. Skip these steps by committing to starting fresh with a new payroll provider beginning on New Year’s Day instead.
5 Questions You Should Ask Potential Providers Before Switching
To make the switch for the first of the year, you’ll need to vet and select your new provider. Your new provider will need to fill any gaps missing with your current provider and signal that they can handle your near-term growth. With that in mind, here are a few questions to ask as you begin your search.
1. What payroll, compliance, and HR solutions services do you offer?
Before you start your search, establish exactly what you need from your new HR provider. Does your business need a full-service partner or additional support? Are you looking for specific expertise? Do you need more complex services like tax guidance? Your potential providers likely differ slightly in their service offerings, so make sure the ones you consider meet your service needs.
2. Do you understand the specific needs of my industry?
Depending on your industry, you may need a payroll provider with specific knowledge pertaining to your niche. The more unique laws, regulations, and compliance concerns may apply to your business, the more critical it is to find a payroll provider with experience in your field.
3. What Tech/Software do you use?
If you’re not especially tech-savvy, ensure that you understand how you’ll access and input data with each provider. Each provider’s tech and software tools may differ which will affect usability for your team. You’ll also want to be sure that the software provided meets the needs of your business. HR technology can cover many solutions such as PTO tracking, recruiting and onboarding, time and attendance, and for ease of use, some providers even offer a mobile app. By asking about these features, you may learn you can consolidate your tech suite and save even more. You can learn more about HR tech capabilities here.
When your ability to pay employees depends on their platform, you want to ensure it’s reliable and that you and your team feel comfortable with the interface. Ask about receiving a walkthrough for their tech platform to build confidence in your choice.
4. What is the cost of your service?
Of course, cost is one of the main factors to consider throughout your search. To find a provider that fits your budget, ask about monthly fees, any features requiring add-on pricing, and whether the price will increase as you add more employees. Save yourself from any potential sticker shocks down the line.
5. How secure is your service?
Finally, payroll requires a high level of security to account for all the sensitive information needed throughout the process. Ask about your potential provider’s policies and security practices to understand how data will be protected, and double-check whether any breaches have occurred in the past. If you come across any red flags, opt for another provider.
How to Effectively Prepare for Your Switch
Found the right fit with the questions above? When it’s time to switch, you’ll have to give your current provider notice and start prepping for the new one. Make sure to also fill your employees in on the transition, explaining what (if anything) will change on their end and what they might experience throughout the switch. For a step-by-step guide, check out this blog post, where we’ve outlined the process of switching providers.
Get Ahead with Merritt Business Solutions
January 1st will be here before we know it, so now is the time to consider your options. Get ahead of the new year and contact our team, or request a consultation below to learn more about payroll administration with Merritt Business Solutions!