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How to Make a Clean Switch to a New Payroll Service Provider

Partnering with a payroll service provider offers significant benefits: cost savings, time savings, and minimized errors, among others. To optimize these benefits, first you must find the right provider.

The wrong fit will not address the challenges and hassles that prompted you to hire one in the first place.


If you’re in this non-optimal situation and working with your current provider to fix the problem is out of the question, then it’s time for a switch.

Finding the right provider

1. The first part of your search involves lists:

  • A list of all the features you need: tax filing, direct deposits, on-demand pay, etc.
  • A list of benefits you may want to offer later as your business expands (e.g., HRAs, vacation leave, retirement plans, etc.).

Narrow down your search among payroll providers who can meet your current needs as well as any additional services you may need in the future. Companies whose clients include organizations from your industry are also a good bet.

2. The second part is all about getting to know your prospects better.

The software

  • Is it user-friendly?
  • Is it intuitive?
  • Is it comprehensive and optimized for compliance?
  • Is it easy to integrate with your HRIS?
  • Is it capable of robust reporting with multiple delivery options?

Explore demos and thoroughly conduct hands-on comparisons. Take plenty of notes and ask a lot of questions. Once you have your top choices, ask them for references from clients that are similar to your organization.

The second part is all about getting to know your prospects better.

The people behind the company

It is not all software. Be sure that the people who will be handling your organization’s payroll and HR data truly understand you, and are in tune with your needs/goals and are prepared to provide you with easily accessible expert support.

The cost

Beware of extra charges. Ask about them before you make your decision over a great base price. Cost savings is not just about the immediate cost. When comparing prices, consider whether a higher price tag gives you a better value and bigger savings down the line.

Making the switch

In the United States, organizations who switch payroll providers generally do so in the following order once they have a new provider waiting:

Informing the current provider about the switch

Tell them of your decision, but do not cancel yet. Find out the requirements for service termination, including how much notice is needed, whether it needs to be in writing, whether there is a termination fee, etc.

Hashing out the transition details with the new provider

Decide on a start date and be sure it gives you ample transition time, so payrolls are not interrupted. Your new provider should give you an accurate transition time frame for a smooth transition.

After these two steps, you should have a clear timeline from both of your providers.

Getting the transition underway

Provide your new payroll service with all the information necessary for your account to go live. Work with a detailed list to avoid any oversight. (Both your old and new providers can help you with this.)

Ready to make the switch? Make it count.

Contact Payroll Systems to see how you can leverage our easily scalable solutions—from paperless new employee onboarding, paperless benefit enrollment, timekeeping systems with companion mobile app, physical clocks, customized job costing, and labor distribution reporting.

We pair human skills and empathy with the latest technology to take on our clients’ HR and payroll processes.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.