Managing your business’s payroll is one of the most critical components of having a successful organization. But sometimes, your current payroll vendor doesn’t meet your exact needs. Whatever the reason may be, finding a new vendor doesn’t have to be a daunting task. We’ve compiled a list of tips and key elements to consider when switching payroll vendors. 

Analyze Your Current Provider

One of the first things to do when thinking about switching payroll providers is to evaluate how the current payroll company performs. Assess what is working and what isn’t. It can be beneficial to create a list during the evaluation process actively. 

Make a note of your current provider:

• Customer service experience. Was it a positive experience? Was the solution resolved? How difficult was it to speak to someone about your concern?
• Cost. Your current vendor might be above your budget and want to switch to a more affordable solution. Determine the price of any must-have features and take into account those prices when comparing payroll companies. 
• Reliability. Has your current vendor missed payroll deadlines or been unresponsive to concerns? Unreliable payroll vendors can negatively impact your business and your employees. Switching to a more stable and reliable vendor would be in your best interest.

Once you know exactly what your company needs, it’ll be easier to compare and find a different payroll company that can meet the most essential functions. 

Services and Feature To Look Out For

The services and features that different payroll providers offer can vary widely. Now that you have your preliminary list of basic must-haves, you can see if any additional features can enhance the payroll experience for both you and your employees. 

Some features and services to look for include:

• Free direct deposit
• Employee portal
• Multi-pay rate
• W-2 preparation
• Free payroll setup
• Quarterly and annual tax returns
• Mobile app
• Automatic payroll
• Time-off tracking
• Wage and tax calculations

Each payroll company might not offer the same features or services, or some might charge for certain services while others don’t. Ask every provider what features are included.

Top Questions To Ask Your New Provider

Sometimes it’s hard to have a company check all the right boxes, but asking the right questions can help. Asking these questions can get you closer to finding a payroll vendor that will help your business thrive and eliminate vendors that don’t fit your needs.

Find the answers to these top 10 questions:

• How does the company handle payroll transitions?
• Have you had any cybersecurity breaches?
• How long has your company been in business?
• What software do you use? How secure is it? Is it user-friendly?
• Do you understand the needs of my industry?
• How do you handle growing businesses?
• What is the customer service experience like at your company?
• What happens if I have a tax or payroll issue?
• Do you work well with companies our size?
• How difficult is it to get onboarded?

If possible, also ask the potential vendor if you can have references of the company’s customers so you can discuss their payroll experience with them. Inquire about any contract obligations as well. Knowing what to ask for will make searching for the right payroll company easier.

When To Switch Payroll Companies

Check with your current payroll vendor to see if any contract constraints bind you. Determine what needs to be done to terminate your service with them. There might be a required notice or termination fees if you close your contract early. 

Typically, the best times to make the switch are at the end of the fiscal year or the end of the quarter. Switching at the end of the year will be a smoother transition for the new payroll provider and make the upcoming tax season easier. Changing at the end of the quarter can be a smooth transition too, with the first payroll from the new vendor being run at the beginning of the latest quarter. Both of these time options will help avoid any issues with filing and paying taxes. Whenever you decide to switch, give yourself ample time to gather all the necessary information and documents to get everything in place so payroll won’t get interrupted. 

Notify Your Current Vendor & Employees

Now that you’ve found the perfect payroll vendor, notify your current vendor of your termination of service. Some payroll companies want to know why their clients are leaving. Being honest can help them address any issues for future clients. 

Gather all of the required payroll documents for the new company. Your new provider will let you know exactly what information they need from you. There might be an option to transfer some information from your old vendor to your new one. If not, these are some of the typical documents they will need:

• Federal tax info and tax forms
• Payroll registration info
• Bank account information
• Current employee information (SSN, W2, direct deposit)
• Third-party authorizations
• Copies of quarterly tax returns

Having all the proper documents ready right when you switch is one of the most beneficial things. It’s also important to notify all of your employees that you’re switching payroll providers. 

Usually, the switch won’t affect them but, on the rare occasion there’s an interruption with their payroll, they’ll know why. Employees might also want to gather any past pay stubs or review any changes they want to make with the new provider. They need to know they’ll lose their account access with the previous provider and will have new account information for the new provider. Once they receive their first paycheck, have them check their pay stub closer to ensure all the information is correct.

Make The Transition Easier With Alltrust

Knowing how and when to switch payroll vendors doesn’t need to be overwhelming; Alltrust Insurance is here to take that burden off of you. Our experts can help analyze your company’s needs and find the perfect solution that will exceed your expectations. We all know the role payroll plays in every company and understand the importance of having the right one. Contact us today to see how we can help find the ideal solution for your company.