When’s the Best Time to Switch Your Payroll Provider?

  

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If you’ve been thinking about calling it quits with your current payroll provider, you may be wondering: When’s the best time to switch and move on already?

You may be pondering that you should break it to them gently, with the holidays and all. But this break-up needn’t be painful: The start of a new year is also the best time to make a fresh start with a new payroll service provider. Why? By starting anew on January 1, you won’t need to enter data from any previous paychecks to get up-to-date. And you won't have to worry that your old payroll tax service will duplicate the efforts from your new payroll choice, causing needless confusion and more heartache.

If you put off your decision to change payroll providers until mid-year, the start of a new quarter should be your next-best choice for timing your departure. You may have to enter some historical payroll information to get up to speed, but it’s better than switching to a new payroll provider in the middle of a quarter, which can be a trickier transition.

Of course, whenever you break up with someone, it’s vitally important to get all your stuff back. Whether you make a clean break at year-end or change providers in the middle of a tax year, make sure you get your payroll records from your old payroll provider (before they forget that it's yours, like your favorite sweater you never got back).

Also, if you switch payroll processing companies midstream, clarify with them that you really are leaving (and you don’t want them to send you flowers or candy, or continue to file any forms with the government that your new payroll provider might duplicate, causing unnecessary confusion and more work on your end.) It’s really best to wrap up this relationship with a phone call to clarify all break-up details.