Switching Payroll Companies Checklist

Maybe you’ve been dealing with payroll error after payroll error, finicky software, or ineffective customer service; whatever the case may be, your current payroll provider just hasn’t been able to meet your business needs, and you’ve decided it’s time to find an alternative.  

Making the decision to switch payroll companies isn’t easy, especially for small businesses that might see the whole process as one long administrative nightmare. However, with the proper preparation, switching to Horizon Payroll can be a clear, organized, and straightforward process with far more benefits than drawbacks. Read on to learn more! 

Looking to Switch Payroll Providers?

Like any other professional partnership, there may be several reasons why your current provider isn’t working out, from glaring issues like careless payroll mistakes or budgetary concerns to more subtle disconnects like changing organizational needs or a technical incompatibility. Whatever the reason, making the leap to a new provider isn’t as daunting as it might seem at first, and you’ll likely find that the end result was well worth the jump. 

The Transition Doesn't Have to be Hard

Some organizations put off the decision to switch payroll providers because they see it as too challenging, disruptive, or expensive – but it doesn’t have to be. Every year, countless companies and businesses switch to Horizon Payroll for all kinds of reasons. While the process does take some effort, we’ve put together a checklist to help you get prepared to navigate this change and come out the other side looking better than ever. With the right preparation, tools, and administrative know-how, switching payroll companies can be straightforward with immediate, tangible results for your organization.   

When is the Best Time to Make the Change?

Because payroll processing is so tightly tied with taxes, the right time for most businesses to make the transition to a new payroll service is typically at the end of a fiscal or calendar year. Both options have their advantages, because the beginning of a new year is arguably the best time to do so, since you won’t have to transfer over all of your employee wage data from the previous year. This can save a considerable amount of time and hassle! If you make the switch between quarters in the same calendar year, you’ll have to ensure you carry over historical employee data, but you’ll be able to file and process your quarterly taxes with your new provider, which enables you to get a head-start on building up your records with them. 

Our Checklist for Switching Payroll Providers

While switching payroll providers might not be a fun and exciting prospect, the process can be made significantly more pain-free by following a few simple steps to ensure your organization is prepared for the transition. Follow our checklist as you go, be thorough, and your business will be ready for whatever hurdles come your way! 

1) Do Your Research on a New Payroll Company

Switching to a new payroll company can come with many unknowns, and the last thing you want is to discover that your new provider lacks a critical service you were counting on after you’ve already made the jump. Focus on other aspects of potential providers besides which services they offer: research payroll pricing, additional features, customer service solutions, and read reviews from others who have worked with them. Take your time and be thorough during this process because the information you gather here will help you determine whether moving to a particular provider is worth the trouble and cost. 

What Payroll Services Do You Need Covered?

A key element of this first step is examining and quantifying the payroll services your current provider offers that are essential to your business so you can ensure your new payroll provider has similar services. These services can include common services like electronic time tracking, direct deposit processing, and payroll software with employee self-service options to 24/7 customer support, customized packages designed for your company, and more.

Does your current payroll provider offer all of these services? Only some of them? Which are essential to the way you operate? This also offers an excellent opportunity to re-examine your payroll process and create a more efficient and effective system with your new provider. 

2) Request a Proposal and Review Your Contracts

Remember, there’s no harm in asking for a quote; there’s no commitment on your end, and simply asking won’t lock you into working with a particular company. Instead, it’s better to have options so you can compare your current offerings and make a more informed decision. Reach out to Scott Langer at scottl@horizonpayroll.com for a personalized proposal based on the services you need for your business. 

3) Setting Up Your New Payroll Service

When it comes time to make the transition, Horizon will help you develop a plan for switching to the new system. We will provide you a list of the information you’re expected to provide so we can have it ready in advance. Take the time to ensure you and your staff are trained and familiar with the new payroll process prior to the final transition. Finally, on your end, plan to set aside some time after the transition to perform an internal audit to verify that all of the transferred information is correct and that there’s nothing missing or incomplete. 

Inform Employees of the Switch

It’s easy to get caught up in all of the administrative tasks associated with switching to a new payroll system, but don’t neglect to inform your employees about the upcoming switch. If there are new processes, applications, or systems for time tracking, employee portals, direct deposit, or pay stub access, take the time to educate your staff on these new systems and be available to help answer questions during the transition. 

Cancel Your Plan with Your Current Payroll Provider

Though it may seem difficult or awkward to cut ties with your current payroll company, it’s best to be clear and direct. If asked, tell your current provider the reasons you’re switching. If you tell them you’re ending your current contract because you “no longer need payroll” or a similar reason, they may assume your business is closing and contact the IRS to file their end of the necessary paperwork and close out their accounts. 

4) Coordinate Tax Compliance and Ensure a Smooth Transition

Maintaining tax compliance is one of the most critical elements of payroll, which means ensuring that this portion of the transition is done right is equally important. As we covered earlier, payroll migration is best done at the end of the calendar year or at the end of a given quarter; this helps provide a smooth transition as you transfer tax filings and other important documents to your new service. Work with your previous payroll provider to get all of the documentation you’ll need ahead of the big move. 

5) Confirm Pay Stubs and Other Documents are Correct

Once you’ve gone live with your new company’s system for the first time, check your first batch of payroll data carefully for any missing documents, discrepancies, or duplicate data. Ensure that all of your payroll records are intact and carried over from your old provider. 

Why Trust Horizon with Your Company's Payroll?

Horizon has been helping businesses of all kinds streamline their payroll processing for more than two decades. Our industry-leading payroll solutions are designed to save time, reduce administrative hassle, and keep your books accurate and compliant so you can rest assured that your business is on the right track. 

Providing Tailored Solutions for Decades

Our proven payroll solutions have been helping businesses throughout every industry for more than twenty years. In that time, we’ve helped countless small business owners streamline their payroll process and eliminate countless hours of administrative work while avoiding tax compliance issues and other payroll pitfalls. We recognize that each of our clients is unique, with their own specific payroll management needs, so our tailored solutions enable them to outsource the services they need while eliminating what they don’t.   

Top-Rated Services for HR, Payroll, Benefits, Onboarding, and More

Our comprehensive services help businesses manage every aspect of their organization, from HR and onboarding solutions to cutting-edge payroll software, benefits management, and more. Horizon is here to handle the paperwork so you can get back to doing what you do best! 

Contact Us Today for a Free Consultation

To learn more about how Horizon’s top-rated team can help your business manage its payroll more effectively and efficiently than ever before, contact us today for a free consultation. Our solutions are tailor-made for each of our clients from the ground up; get the process started and reach out today!