Skip to content

Workforce Management

Small Business Guide to Switching Payroll Providers

Small businesses are often afraid of switching payroll companies, but are they right to be? Sure, it can be stressful. Setting up payroll is complicated enough, so is a change really necessary? The reality is, getting payroll right is so important—even small errors can lead to big fines, angry employees and wasted hours putting things right—that sticking with a payroll provider that doesn’t work well for you just isn’t an option.

Is Your Current Payroll Provider Offering Enough?

It’s easy to be tempted to stick with what you know, regardless of the problems with your current payroll provider. Choosing to switch providers certain isn’t an easy decision—but ask yourself:

  • Is time being wasted on repetitive admin tasks?
  • Does payroll need to be completed in multiple batches—causing unnecessary stress?
  • Do we struggle to find support when we need it?
  • Does our current process produce errors?
  • Are we getting the compliance expertise we need?
  • Do we miss out on the benefits of a complete HCM solution?

If the answers to any of these question are yes, then you should at least be considering alternatives. If things are bad, they probably aren’t going to get better any time soon. It’s not just payroll that’s at stake—it’s the future success of your whole business.

When Is the Best Time to Switch Payroll Providers?

Businesses may be worried that it’s only possible to switch payroll providers at end-of-year. Sure, foregoing the hassle of transferring payroll data mid-year does make things simpler, but the reality is that it’s possible to switch at any time of the year. Choosing to move at end-of-year or at the end of the quarter might reduce admin, but this shouldn’t hold you back—a good provider will offer a dedicated implementation consultant to make sure all data is transferred quickly and smoothly.

Choosing the Right Payroll Provider

When picking the right payroll provider for you, it pays to do research. You’ll want to consult third-party reviews and find a product with a stellar reputation. Ultimately though, you need to find a payroll provider who offers all the services you need. Hint: it’s not just technology.

Your first step is to decide what you you’re after. Is it just payroll, or also integrated time software so you can collect timesheets you trust and avoid manual data entry? Are you looking for HR software to store employee data? You might also make your life easier—and your company more efficient—if you have access to software for staff scheduling, onboarding, learning & development, and more.

Next, you want to make sure the product is actually usable, with intuitive design—for both you and employees. If it can be accessed on mobile, that helps too. Before committing to any provider, request a demo, and beware: if they are skipping over any important steps, that’s a bad sign.

While the right software is crucial, the real differentiator when choosing a new payroll solution is what else you’re getting. Things like compliance expertise, so you won’t be getting caught out by legislative updates, a robust support service to help out if things ever do go wrong and—most importantly of all—an implementation team to get you off to a flying start.

How to Switch Payroll Providers

Breaking up is never easy but, once you’ve made your choice, you’ll need to let your old provider know. Then, it’s time to make things official with your new payroll provider. Usually, you’ll have to gather and provide important information, including:

  • The legal details of your business (including tax local, state and federal tax ID numbers)
  • Your chosen payroll schedule
  • Salary and hourly wage figures
  • Bank account details and
  • Employee details

If you’re choosing Paycor, an implementation consultant will guide you through every step. Together, you’ll set expectations and draft a timeline for transition—this can take longer if your payroll set up is more complicated, with multiple locations, tax IDs or pay structures. When you’re ready to make the switch officially, you’ll also need to make sure your employees are fully informed.


payroll software