Can I change payroll companies mid-year?
It’s summertime and the last thing on your mind may be thinking the time is right to switch payroll providers.
Conventional thinking holds that switching payroll providers is best accomplished at the beginning of the year. After all, it’s the time when a business starts with a clean slate and there’s no year-to-date information to transfer.
But these days, thanks to technology and cloud-based computing, payroll data can be imported much more efficiently and accurately than ever before.
Mid-year or even beginning and end of the quarter conversions can be ideal for several reasons. If you are a small business owner filing taxes quarterly, this gives you the chance to review your payroll provider and ask important questions. In fact, there are a host of things for companies to consider about what a provider is getting right or wrong:
- Is my data secure?
- Am I getting the customer support I need?
- Do my employees have access to their payroll information?
- Are the provider’s services fairly priced?
- Is their process integrated with accounting software?
- What kind of checks and balances are in place to prevent mistakes?
- Are there opportunities for additional services as my business grows?
As you determine what you want from a new payroll provider, write down those needs. And then consider what you as a company must transfer before making the switch.
“Among the things needed is the prior year payroll history, including copies of employees’ W2’s, tax filings, etc., and how they plan to save this data,” says Pete Feaman, vice-president and CPA at IPS. “Many payroll companies only load the current year information, so it’s important to make sure that you will still have access to your prior years’ payroll records supplied by your previous provider.”
Transitioning to a new payroll provider raises a lot of questions, but preparation is important to ensure a smooth process. For more advice on successful payroll conversion, contact IPS.