Oh no! I need to switch my payroll provider!

By BuyerZone Editorial Staff

If your current payroll provider has delivered more tax penalties, rate hikes, and headaches than good service, the idea of checking out new payroll providers has probably crossed your mind.

Quick on the heels of that thought, most likely, is that the only thing worse than a bad payroll service is switching from one service to another. However, since many businesses do it-and often-it's often worth knowing how to make the switch as painless as possible.

Make sure you need to switch

Before investing in the time and cost of switching, clearly communicate your dissatisfaction with your current payroll provider and put them on probation for two or more payrolls. If they value you, they will shape up, and you'll feel as if you've switched to a better service-but without the added hassle of actually picking up and moving.

But if you still know you want to switch...

Know why you're leaving

First, before you even begin to research alternate payroll firms, you need to evaluate your experience with your current service. Be clear on the answers to these questions:

• What do I like and dislike about my current payroll firm?
• What procedures could have been handled better?
• What is the main reason why I want to leave this service? (Are customer service representatives not responsive to phone calls? Have there been an unnecessary amount of errors? Is the pricing exhorbitant?)

Make it a clean switch

Since taxes are paid on a quarterly basis, try to switch payroll services at the end of the quarter or beginning of the calender year. If you can't wait, find out to what extent the payroll provider will guide you in preparing taxes.

Be thorough in communicating your needs

Send a full set of documentation for one payroll period, so the service can use it to benchmark for comparative purposes.

Check and recheck employee data

Make sure to check the initial data that is entered for each employee. Mistakes made at this point can greatly affect your payroll for the rest of the year.

Try a dry run

Have the service process the first batch of paychecks several days in advance. Check social security numbers, W-4 data, and all the numbers. You don't want to be frantically scrambling to fix unanticipated errors while employees are waiting for their pay.

Interested in shopping around for payroll options? Use our free instant comparison service to review different payroll products and services.