The Payroll Blog

News, tips, and advice for small business owners

Your Complete Guide to Switching Payroll Services

Posted On
11/28/2022
By
Maggie Saemann

Whether you’ve been following a DIY approach for your small business payroll or working with an online payroll service, you may be wondering if it’s time to make a change. Our complete guide to switching payroll services can help.

best-time-to-switch-payroll-services

Although many small business owners opt to run payroll themselves in hopes of saving money, taking advantage of an automated payroll system could actually save businesses up to 80% in payroll processing costs.

Additionally, according to a recent SurePayroll survey, utilizing the right online payroll system could save companies up to 20 hours of manual work per month.

However, despite the benefits of using an online payroll system, many small business owners feel overwhelmed with questions when it comes to making the switch. Is online payroll worth it? What should you look for in a payroll system? When is the best time to switch payroll providers? And how do you ensure you make the right decision for your business?

SurePayroll covers all of those questions (and more), so check out our complete guide to switching payroll services below.

Is Payroll Software Worth It?

According to the IRS, 40% of small businesses end up paying almost $1,000 in IRS penalties due to payroll errors each year. Working with a trusted partner like SurePayroll can help minimize payroll errors, help you avoid fines and penalties, and:

  • Save time on mundane, manual processes (which allows you to do what you do best: focus on growing your business and caring for your employees)
  • Reduce or eliminate the need for an in-house payroll professional
  • Increase easy access to payroll records, reports, and analytics
  • Protect sensitive payroll data with encryption and firewalls
  • Offer your employees supplemental benefits like workers’ compensation, retirement plans, and health insurance
  • Provide employee self-service access and features
  • Support compliant business practices and remain tax-complaint

When is the Best Time to Switch Payroll Services?

When considering switching payroll services, it’s important to ask yourself one important question – Would making this change help improve my business in any way?

If the answer is “yes”, it’s automatically a “good” – or at least worthwhile – time to switch payroll services. You can technically start with a new payroll provider at any point during the year, so if you’re eager to make a change, don’t let waiting for the “perfect” time hold you back.

However, the end of the year is traditionally the best time to switch providers or transition from DIY to working with an online payroll provider. Not only does a year-end switch offer you a fresh start in the new year, but it also ensures employers won’t be required to enter any employee wages from the previous year – a significant time saver

Alternatively, if a year-end switch isn’t an option, consider a quarter-end switch. Although you’ll still have to transfer payroll data, you can stay organized and save time when you begin processing and filing quarterly taxes.

Questions to Ask Payroll Providers 

An online payroll system could be a game-changer for your small business – but only if you pick the right partner. To ensure that you select the best fit for you and your business, consider asking the following questions when comparing online payroll providers:

  • How long have you been in business? Choose a payroll provider built to last. It’s important to know your online payroll provider is established, stable, and will be there for you during the good times and bad – and that the team features knowledgeable and supportive payroll and tax experts. (Note: SurePayroll has been in business for 20+ years.)
  • Can you help a business of my size? The phrase “small business” can mean many different things. From restaurants with 30 employees to bookstores with three, every small business will have unique payroll priorities and needs. To ensure you select the best payroll service for you, ask providers about their target customer and how your business fits into that.
  • What are the customer service options? It’s important to have a customer care team that has your back if you run into a problem while running payroll, have a question about your account, or want to add services to help care for employees. When trying to select a payroll provider, ask about customer service hours, customer service contact options (such as talking with a representative on the phone, chatting with a team member online, or accessing DIY resources on the web), and take note if they have any notable customer service rewards. (Check out the customer support awards SurePayroll has received here.)
  • What do other customers say? The best way to get a genuine feel for a company is to consider what their current customers are saying. While you can certainly ask providers this question directly, you might find more authentic results when you search for online reviews yourself. (Just be sure you look at reputable websites such as G2 while you do your research.)
  • Will I get help if something is wrong with payroll and taxes? Mistakes happen every day, which is why it’s so important to select a payroll service that offers immediate help when things go south. Ask providers what they do to support customers when mistakes are made and if they have any official policies in place regarding guarantees or error-correction. (For example, SurePayroll has several different tax guarantees that promise to pay for all tax-related fines and penalties if they’re caused by our errors.)

Payroll Transition Checklist

Once you’re ready to officially make the switch to a new payroll provider, there are a handful of payroll and tax-related tasks you’ll need to complete first.

Business Identification Numbers 

  • Employer Identification Number (EIN) 
  • State withholding tax ID number 
  • State unemployment insurance account number 

Employee Forms 

Collect following forms from all employees: 

Worker Classification 

Classify workers as either:

  • A W-2 employee
  • A 1099 independent contractor 

Payment Method 

Determine how you will pay your employees:

  • Direct deposit
  • Paper check 

Running Payroll 

Regularly check accuracy on the following employee paycheck deductions: 

  • Federal income tax 
  • State tax 
  • Local tax 
  • Medicare and Social Security taxes 

Other deductions (such as those for retirement plans and insurance)

You should also regularly review the following employer taxes: 

With the help of your payroll company, you're also required to make the following federal and state tax deposits and filings: 

  • Form 8109 (Federal) 
  • Form 940 (Federal) 
  • Form 941 (Federal) 
  • Form 944 (Federal)
  • State forms (depending on your state) 

Lastly, here are some of the year-end documents that come into play: 

  • 1099 
  • 1096 
  • W-2 
  • W-3 

Switching Payroll Providers: The Bottom Line

If you’re looking for a new payroll service – whether you want to leave DIY behind or you’re unhappy with your current provider – year-end is the best time to make the switch. 

Allow SurePayroll to be your trusted partner for sure success: Make the switch to SurePayroll today and get up to six months free.

 

 

 

 

 

View Our Plans and Pricing

Small Business Is Our Business.

 

This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.