Breaking Up with Your Payroll Provider: Ask 10 Questions Before Moving On

Is your current payroll provider not communicating? Are you losing trust in them? Do you find yourself often reminiscing about the good times and making excuses for their behavior?

Ok so maybe your current payroll provider is just not that into you.

You've been passed off to a customer service hotline where you never speak to the same person twice. They missed a tax deadline and aren't worried about calling you back. And let's be honest: you deserve better.

You outsourced your payroll to make your life easier. But now that this relationship has run its course, you fear the change of switching providers, especially mid-year.

We've learned from romantic comedies that becoming bitter and disinterested doesn't get you anywhere, and that closure is vital for a happy montage.

At Whirks, we've seen our fair share of breakups. And we know that your life (and our lives) get easier when you leave with all your necessary bags packed and memories in the past.

It pays off to do your homework before running into the arms of a new payroll company. After all, you need time to process what's happened, take a yoga class, and walk around aimlessly to the sweet sounds of Vanessa Carlton.

Let's review these ten crucial questions to ensure that your switch is easy.

Think twice, it may not be alright.

Write a detailed list of why you're leaving and what you're looking for in your new provider. Does this new provider have experience working with your industry? Do you know any of their current clients?

If your best friend had a terrible time on a date, you probably wouldn't want to go out with that person, right? Filter software reviews by industry and ask fellow business owners about their experience with your potential new payroll provider.

You may be over your current provider, but rebounding is never a good idea.

1. What is your current payroll provider failing to do that's forcing you to make the switch?

Before you break up with your current provider, ensure that you know exactly why you're leaving. Not only will this make your transition smoother, but it will help you outline what you want to avoid in your next payroll relationship.

2. What are my business goals?

Consider your industry, your employees, and what your goals are for your business. When you switch to a new provider, you need to consider how their software and service are going to benefit you and your team.

For example, if you're a home health care provider, you may need seamless onboarding and an array of timekeeping options for your different employees.

Envision where you want your business to be in the next year and study up how an HCM system can help you streamline your timekeeping, benefits, and HR processes, leaving you more time to lead your team and grow your business.

3. What is most important to me in a payroll provider?

If you have dedicated employees who manage your bookkeeping and process payroll, you may not be hyper concerned about having a dedicated account specialist to guide you through potential problems.

But if you or one of your managers is wearing HR as a second hat, it may be worth it to look for a local payroll partner. You can go to the office, call your dedicated representative on the phone, and avoid being on the phone for hours concerning a time-sensitive payroll issue.

4. Will they stand by you?

You may think you'll never need a helping hand. But, as we've learned, that usually means you're going to encounter a crisis, feel completely alone, and wait for your true love to randomly show up in the middle of the night because they just knew.

With that being said, please don't go with a payroll provider who does that. But again, you should consider every possible outcome or problem that you may run into down the road.

It may be important for you to contact support 24/7. Or maybe you hate talking on the phone and prefer to communicate via email (or vice versa).

Ask your new provider to explain what customer service and ongoing support will look like for you and your team. Create a list of questions that outline possible situations, how you can reach out to them, and what the turnaround time will be.

Pack up your data.

First things first: review your current contract, and find the answers to the following questions.

1. Are you free to leave?

Are you free to leave your provider at any time? Are you required to give a 30-day notice? Are there any penalties? It's important that you ask your new payroll partner these same questions, in case their services aren't a good fit.

2. Pack up your data.

Next, what data do you need to collect? It's important that you have already established a relationship with your new payroll provider before you consider making a switch. Your responsibilities and their responsibilities will be clear and eliminate any confusion.

Make sure you understand what share of the work is on you. A switch is only worth it if it saves you time - you don't want it to double your work.

3. Is time on your side?

Time is on your mind, but is it on your side?

You may find yourself in the middle of the fiscal year, which will affect your year-to-date payroll taxes. This is why it's important for you to understand if your current or new payroll provider will handle your payroll taxes. Who will send out the W2s at year-end?

The last thing you want is for your precious belongings (or, sensitive employee information) scattered everywhere. Until you fully understand how your data and information will be handled, and feel at peace about it staying secure, keep asking questions to ensure your peace of mind.

Let's Talk about Tech

1. Processing Tax

In 2013 alone, the IRS issued $4.5 billion dollars in penalties to businesses who incorrectly calculated their payroll taxes (Forbes).

You do not want to receive a notice from the IRS. Even though it's common and not as scary as it seems, your payroll provider should file your payroll taxes and ensure you have nothing to worry about.

Ask your new provider if they can process taxes for employees living in nearby states and if there are extra fees.

If your new payroll provider also provides a tax service that you want to use, ask if you have to cover the penalties and interest charges?

Who is going to take care of the outstanding payroll tax liability - your new or old provider? Get this in writing.

2. Taking it for a Test Drive

Your new payroll provider should always give you a demo of their software before you decide to make the switch. Even if you like what you see, don't be swept away by a pretty (inter)face.

Do they provide the tools you need to grow your business and empower your team? Is their mobile platform easy to navigate? Will it be convenient for your employees? How long does it take to learn the new system and will you be provided with adequate training?

If your new relationship isn't working out, you need to feel like you can end it on good terms. Ask your new provider if there is a penalty for switching back and if they handle the transition.

3. Read the Fine Print

Your head is in the clouds and your feet are barely on the ground. You're so swept up with your new payroll provider that you can't foresee anything ever going wrong.

Before you get ahead of yourself, review the fine print. Consider every possibility and ask about your contract. Ask your sales rep to review their pricing model so you understand it completely. After all, trust is the basis for every great relationship.

• Are there hidden fees?
• Is the implementation fee an introductory rate that increases in a year?
• How will your price change based on your number of employees?

Nothing compares 2... being prepared & choosing the right provider for you.

 In Runaway Bride, Joan Cusack reminds Julia Roberts that "He's the one, you just need to get all your ducks in a line."

You can't begin a new and healthy relationship while you're still carrying feelings from the past. You have to prioritize your needs first. It usually ends in heartbreak, as we've witnessed. A million times. And we still fall for it. Each time. 

While this new payroll provider might be the one, take your time. Ask these questions and do your research. Reach out to friends and colleagues and ask about their reputation.

You, your team, and your business deserve the best. The right payroll provider will not only line up with your needs, but it will also help you scale your company, empower your employees, and give you time to keep pursuing your passion.

If you're currently searching for a new payroll partner, read our article on choosing between National vs Independent Payroll Providers.