You probably already know that the end of the year is a good time to switch payroll providers, because you can start fresh with your taxes and payments in the new year. But what if you can’t wait until the end of the year to switch? Many businesses find themselves looking to switch payroll providers during the year, while still making the process as smooth as possible.
The good news? There’s an equally awesome time to switch payroll providers: the end of a quarter.
Simplify paperwork and clarify responsibilities
Switching at the end of a quarter gives you a clean break, which really goes a long way to making your life easier. Your previous payroll provider will send in your quarterly filing for the last quarter, and you’ll start fresh with your new payroll provider in the new quarter. No need to worry about multiple filings or partial information getting recorded.
Do less data entry
Your new payroll provider only needs quarterly totals rather than individual paycheck data. This can translate to a major time savings as you get set up with your new provider.
Switch on your schedule
No need to wait until the end of the year to switch. Pick the time that’s right for you and your business, so you can leave behind your old provider and get started with a new one.
#1: Find a payroll provider that’s right for your business and your budget
Do your research, and talk to them about their setup process to ensure that their setup process matches your needs and expectations. Ideally, they will pair you with an expert that does all of the heavy lifting. You’ll also want an accuracy check. And most importantly, you don’t want any set up fees. You’re giving them your business after all.
#2: Gather and enter payroll data
If you’re switching at the end of a quarter, you will only need payment and tax totals for each of the previous quarters. You don’t need to detail each and every payroll, and that’s what makes the EOQ such a great time to switch. You’ll also need all your employee and contractor info as well.
More of a do it yourself type? Some providers allow you to set up payroll yourself for total control. Other providers will move all of the data for you and simply let you know when it’s ready.
#3: Don’t break up with your previous provider until you’re ready to run payroll
Breakups can be tough. Some payroll providers will turn off access to your data once you leave them, while others offer lifetime access. Either way, you don’t want to get locked out before you gather your things.
For those less cordial past payroll relationships, make sure to download all the reports and payroll data you need for your long term records.
#4: When you’re ready, tell your previous provider your filing preferences
Typically, you will ask your old provider to finish filing for the last quarter you were with them, but tell them you DON’T want them to file any W-2s or 1099s at the end of the year. Your new provider has likely got that covered.
#5: Let your team know
Once you’re approved to run payroll in your new system, let employees know about any changes they will see. For example, does your new payroll provider offer an employee portal? What about payroll text notifications or emails? What communications should your team expect?
Ideally you will be consolidating tools and moving to a software your employees already know, but if not, check to make sure your new provider offers training materials for the team.
Your employees will receive one Form W-2 or 1099 from your new payroll provider at the end of the year. Let them know where and how they can expect to receive it when the time comes.
#6: Double-check your dates and run payroll with your new provider
Don’t let your hard work go to waste with mixed-up dates. Ensure that your last pay date with your old provider is in one quarter and your first pay date with your new provider is in a new quarter. Here are the dates of each quarter for quick reference:
Quarter 1 – January 1 to March 31
Quarter 2 – April 1 to June 30
Quarter 3 – July 1 to September 30
Quarter 4 – October 1 to December 31 (this is an end of the year switch!)
You don’t have to stay in a bad payroll relationship. Switching at the end of a quarter simplifies paperwork, reduces data entry, and saves you time. If you’re looking for a payroll provider that knows hourly work, check out Homebase Payroll.
Homebase Payroll enables you to consolidate tools, save time and money running payroll, and build a better experience for your team.
Homebase also offers a setup experience for every type of business owner.
Want to do it yourself? Check.
Want an expert to do it for you? Check.
Want someone to review the setup for accuracy? Check.
Want all of that for free? Check.
Check out Homebase Payroll today.