Switching payroll providers? Set yourself up for success by avoiding common mistakes.

Payroll is a mission-critical part of your operational responsibilities, making it essential that the tools and services you use really meet your needs. Those needs can evolve over time, however, maybe due to growth, unique payroll considerations, budgetary constraints… Whatever the reason, you’re now facing the deeply nuanced payroll conversion process. It’d be nice if we could reduce it to a simple checklist, but there’s a lot more to it than that, requiring a holistic understanding of both your payroll needs and related guidelines and laws. 

No matter how you slice it, you’re vulnerable to potential compliance errors and IRS penalties without the right guidance. 

To help set you on the right track, here are four key considerations.

Choose the best time for payroll conversion.

It may be cliche, but timing really is everything. 

Our recommendation is to kick off the process at the end of a calendar year. Or, if you can’t wait that long, at the end of a quarter.
The goal is to have a clean slate and not lose track of any data or balances you may owe. If you choose to begin at the end of a quarter, just remember that you’ll need to enter historical data: earnings, deductions, and taxes based on the time of year.
This approach requires a bit more work on your end, leading to a longer conversion process and greater risk of errors. 

Keep track of the data transfer and verification process during your payroll conversion

This process requires the careful transfer of a huge amount of data. If you have an HR managed services provider in your corner, like DES, this transfer is pretty straightforward. If you’re doing it on your own, you’ll need to carefully verify and review every detail yourself, ensuring that the information is correct. Your payroll provider should give you a checklist to help outline the process and ensure that no pertinent information is missing. 

Plan ahead for payroll tax

Handling payroll tax is a key part of payroll management. Errors here can be very stressful and costly. 

Before your payroll conversion takes place, ask yourself these questions: how do you update your tax information? And, what options do you have for information sharing?

These aren’t considerations you want to tackle mid-stream. Knowing this information ahead of time, and even allowing your new payroll entity to shoulder some of the responsibilities will simplify the conversion process and save you time and energy.

Make sure your payroll provider can support your needs before you make the switch

A payroll provider isn’t just a service, but a partner, and it’s essential that you can trust and rely on them. They have to be in your corner and able to leverage their specialized knowledge to make your life easier. 

Here are a few good questions to ask:

  • Do you provide a checklist or timeline for the conversion process?
  • Do you provide a breakdown of who handles which tasks?
  • During which hours is your customer support available for questions and guidance?
  • Will you inform me of any updates to payroll regulations?
  • How will my employees be able to obtain copies and information of their payroll documents?

If your questions aren’t being answered, consider that a major red flag. A clear-cut, error-free payroll conversion process relies on effective communication. 

What are the advantages of payroll management through DES?

As we mentioned above, your payroll provider needs to be a real ally, supporting your needs and answering questions that naturally arise along the way. They need to be proactive too, helping you avoid problems, not just reactively dealing with problems. 

At DES, you aren’t just another faceless client. You’ll work with a team of experts that’s dedicated to you and your business, offering white-glove HR support and services. And yes, that includes a smooth, seamless payroll conversion whenever you should need it. We do what we do so that you can focus on your operational tasks and objectives. 

Would you like more information? Contact DES today to talk to one of our experts.