Changing Payroll Companies? Tips for a Seamless Transition

Transitions can be tough. They involve risk and risk-taking can be costly, or at the very least, unsettling.  

Maybe you can relate. For eleven years you’ve controlled the remote and drank milk out of the carton. Enter your new spouse. Did you just lose half of your closet to a shoe collection for a woman you swear only has two feet? Does your spouse leave the seat up every time?

Or maybe you have the opportunity of a lifetime to take a job in your firm’s Lisbon office. The four hours of Rosetta Stone Portuguese you listened to on the plane isn’t helping you get around and you don’t know a soul. Suddenly the reality of your new life away from all you’re accustomed to hits hard.

Switching payroll providers is a lot less life changing, but it’s still a transition that comes with angst—especially if it’s not managed well.

You are probably asking some of the following questions… What if my employees miss a paycheck? Who handles the outstanding tax payments? What if if takes our team a month to figure out the new software? (By the way, switching payroll companies shouldn’t feel like a gamble. Don’t miss our blog on“20 Questions to Ask Before Switching Payroll Providers.”)

Lean in close because there’s some really good news. A smart risk can reap great rewards and if you’re switching payroll providers, you’re likely anticipating great benefits for your business. Benefits like cost savings, attentive customer service or an easier-to-use platform.

While all change comes with growing pains, here are eight steps to ensure your payroll transition is seamless:

  1. Timing. You may switch providers at any time but if you can schedule it around the start of a new year or a new quarter that might make things a bit easier.
  2. Make a clean break. Find who is responsible for what and on what date. This is especially important for outstanding tax payments. Typically, the previous company will refund any unpaid impounded funds. Make sure you understand how the new company will account for those payments.
  3. Complete all legal, banking, and authorization documentation. Ensure that your new provider is ready to write payroll checks, complete online forms, and pay employment taxes on your behalf if that is part of your contract.
  4. Be clear on what data will move from the previous system to the new system, and who is responsible for data migration. The new company may only pull the current year’s data leaving you with a data hole on any older issues that may pop up.
  5. Make sure there is time to test the new software before implementation, especially if your vendor provided any customization for your business.
  6. Communicate the change to your employees. This is critical if you will be implementing any self-service options, such as electronic pay-stub delivery. This is a great opportunity for employees to review and update their information in the new system.
  7. Keep a log of any changes you make in the previous system during your last couple of processed payrolls. Use it to double check that the new system picked up those updates. If the successor company did their job correctly, this step will inspire confidence in the changeover.
  8. If the new company has live training, webinars, articles, or all of the above, take advantage! Getting the most bang for your buck out of the new system requires an investment of your time to understand how the new features and functionality work.

Let’s fast forward one year from the transitions we discussed earlier. Our executive in Lisbon is thriving professionally while making some great friends abroad. She’s ordering her meals in Portuguese and is thankful for all of the experiences she’s had since stepping on that plane.

And our newly married husband? He is enjoying home-cooked meals and happily sharing the remote…at least twice a week.  

We’d like to cheer you on in winning at your business by taking on your payroll so you can focus on your core business and HR tasks. If you are looking at switching payroll providers, we promise to be in your corner, guiding you every step of the way. Let’s schedule a time to talk.