Changing Payroll Provider Mid-Year: 3 Benefits and Setbacks
Updated December 23, 2022.
There's a huge misconception among corporate organizations that the beginning of the year is the ideal time to change payroll providers. This is most likely because people often associate the start of a new year with new beginnings of all kinds, but this article will show how this shouldn't apply to changing payroll.
Many companies struggle with properly managing the aspects of payroll on a regular basis, from tax compliance to employee satisfaction. It can be difficult for companies to find the right payroll provider that meets both their needs and budget, which often leads to changing payroll providers mid-year. Contrary to popular belief, this can actually be a great time to make such a change—below, we'll discuss why that is.
» Is in-house payroll a good choice for your business? Find out here
3 Benefits of Mid-Year Payroll Provider Transition
Changing the payroll provider mid-year payroll provider offers several benefits to an organization. It reduces the workload with a new provider transition at the beginning of a year and helps avoid any potential issues that may arise from not being familiar with a new provider's processes and procedures. In addition, it ensures business owners are taking advantage of the most up-to-date technology and services in the payroll industry.
What's more, choosing the right payroll provider can help you achieve:
The best payroll providers will be at your disposal any time you require their assistance. If they care about customer service, they'll be available for any questions and concerns you may have about the service. Additionally, look for a provider that will offer regular communication updates on their services, process changes, as well as other pertinent information.
You know you're dealing with a great payroll provider when all your employees are getting paid on time and no one is overpaid or underpaid. Good payroll providers issue precise and consistent payments of employee compensation while taking into consideration any changes in your business. Additionally, data maintenance is crucial for organizations that handle sensitive employee information, so the right payroll provider should be able to guarantee all data will remain secure and confidential at all times.
No Future Problems
As a business owner, you should always remember that the main reason you're hiring a payroll provider is to save money and time in the long run. To achieve this, you should look for a provider that can guarantee future success with no additional issues. In short, they should provide quality service and customer support, be up to date on the latest local legislation compliance, and have no hidden fees.
» Eliminate future issues: see the internal controls to avoid payroll fraud
3 Potential Challenges to Keep in Mind
Despite the clear benefits of changing payroll providers mid-year, there are still some potential challenges to be aware of. These can include the following:
Before changing your payroll provider, remember you have to give your new provider a clean slate. This means you'll need to handle all the issues & data errors related to payroll management and payments before changing providers. This will help the new payroll provider hit the ground running and get your employees paid without any issues while keeping you headache-free.
Multiple Pay Frequencies
Flexibility is a crucial quality when it comes to choosing the right payroll provider, so make sure the provider you choose can accommodate multiple pay frequencies. It's recommended you find a service that won't be limited to monthly payments and can handle weekly, bi-weekly, semi-monthly, and monthly frequencies to ensure everyone gets paid on time. While most employees & contractors prefer being paid on a monthly basis, having this flexibility will keep you open to more options and allow you to handle issues like paying overtime more easily.
» Are you properly calculating overtime? See how to do it automatically
Complex Payroll Taxes
In organizations with more complex payroll taxes, it's important to find a payroll provider that can manage this complexity with ease. The right payroll provider should be able to handle issues like complex tax processes while taking care of employee documentation, year-end processing, and other relevant tasks. Nevertheless, hiring a tax expert can be an alternative solution if hiring such high-end payroll providers is out of your budget.
Changing Your Payroll Provider Mid-Year: The Verdict
Although changing your payroll provider mid-year has its benefits, what to keep in mind when choosing a new provider ultimately matters more than when you'll make the transition. As long as you find a provider that will offer good communication, reliable service, and an assurance of no future problems, you're good to go, whether it's mid-year or the start of a new year.
As a final thought, consider using the right payroll software to handle the tedious business processes, as the right solution will help with quick calculations and compliance with relevant laws. Adopting reliable automated payroll software will help you get on track and maintain an efficient payroll process, ensuring satisfaction on both sides.
» Looking to ensure a smooth payroll process? Read TBR's payroll software reviews to find a solution that will help you achieve your goals.