
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.

How COVID-19 Is Impacting the Labor Market
As the demand for labor shifts and the unemployment rate rises, workers and employers adjust.
View the ImpactStay Up to Date
Sign up to receive our latest research and expert advice.
Check your inbox for an email confirming your subscription. Enjoy!
More to Discover

Webinar: Paycor's Virtual Payroll Platform Overview
Focus on what you do best. We’ll take care of the rest, behind the scenes.Over the years, Paycor has conducted hundreds of user groups, one-on-one interviews, and group discussions with HR leaders. One thing we discovered is that HR teams spend nearly 70% of their time on inefficient administrative tasks, some of which are still paper-based. To make a difference in your organization, your team needs to simplify and streamline HR, benefits administration and compliance so you can focus on what you do best.Watch as one of our solution experts walks through how Paycor’s Payroll solution can help you solve some of your biggest HR challenges.Speaker: John RedingJohn is the Senior Director of Deal Success and Pre-Sale Support for Paycor. A...
Payroll Card vs Direct Deposit
Choosing the Right Payment Method for Your Employees It doesn’t take much business experience to know that getting your compensation strategy right is crucial for recruiting and retaining top talent. But paying employees isn’t only about a question of how much. You also need to know how to pay them. What makes things more complicated is this: almost a quarter of American households are unbanked or underbanked. Either they don’t have a bank account or, if they do, still rely on non-traditional financial services like pay day loans or check-cashing services. This could be down to something as simple as lack of traditional banks close to home, looking to avoid high fees or just not having enough funds to meet minimum balance requirements....
How HR Software Can Boost Your Compensation Strategy
You can put in all the work you want developing a great company culture, but if you don’t get compensation strategy right, you’ll be fighting a losing battle to motivate and retain your employees, and you’ll miss out on attracting top talent.It’s never been more important: with the rise of remote work, intangible benefits like in-office culture or work location offer less of a pull factor. Meanwhile, the stats show employees are working harder than ever and it’s only natural they’ll expect to be rewarded. The tools you still have at your disposal, like merit increases and bonuses, have a big role to play keeping your workforce productive and engaged.Sixty-nine percent of organizations say that compensation trends are important or very...