Originally Published by Christian Valiulis in HR Professionals Magazine
Change can be a scary thing, no matter what the situation is. There are potential unknowns that come with something new, but the payoff can be substantial. If you’re concerned that switching payroll providers will result in missed pay periods or data errors, you are not alone.
However, there is more to be lost from using ineffective payroll solutions than in the conversion process itself. A successful payroll conversion process meets your company’s unique needs while minimizing the amount of work required to get started.
There are many reasons why businesses are reluctant to embrace a new payroll solution. However, there are ways to overcome apprehension from your top-level management, peers, and employees. Consider the following six factors and have an open dialogue in your company about choosing a new payroll provider.
Six things to consider in your search
An automated payroll system needs to help solve the challenges you’re currently facing. Remember, the solution is supposed to be a company asset, not an unnecessary expense. Once you’ve decided to change providers, consider these six factors when you are searching for an automated payroll solution:
1. Payroll Conversion Timing
For a mid-year conversion, anytime between April and August is a great time to start. Converting at the start of any quarter provides a seamless transition of data, decreasing the risk of missed or lost information. If you aren’t ready for a switch so soon, another option is to convert towards the end of the year.
The ideal time to begin a year-end conversion is October so it doesn’t conflict with year-end processing. A cloud-based implementation process will ensure a smooth transition, regardless of the time you switch.
2. Data Conversion
To assure your information will be correct, make sure the following tasks are performed:
Year-to-date history is entered into the new payroll solution.
A payroll compliance assessment is performed to reconcile data history.
Parallel, or side-by-side payrolls, are run prior to the first live payroll submission to confirm data and tax settings are correct.
3. Data Integration Capabilities
Many companies have existing systems in place, like accounting software, point-of-sale (POS) systems, and benefits administration software. Integrating your existing business investments with an online payroll system eliminates manual processes and saves you time rekeying data.
Consider providers who have an established portfolio of integrations with the most popular business applications and vendors. Providers who own and develop their own technology also have the flexibility to create data integrations for a tailored solution.
4. PAYROLL TAX COMPLIANCE MANAGEMENT
With payroll tax rules constantly changing, consider a provider with a compliance department that reduces your burden and risk. A tax compliance team can help you by:
Automatically updating federal and state tax tables
Handling tax filings and payments on your behalf
Assisting with year-end payroll processing
A dedicated team of tax compliance experts will review your existing data and check for any potential errors. Concerning payroll and tax compliance management, always ask these important questions:
- What is the provider’s most recent tax error rate? A low tax error rate shows consistency and accuracy in payroll processing, saving you from penalties.
- What does the provider offer for Affordable Care Act (ACA) compliance and reporting? Take a look at the features and benefits their solutions offer and how they will work with your ACA compliance strategy.
- What type of security protocols does the provider follow to protect client data? An experienced provider will have controls in place to protect your data, like SSL encryption and SOC reports.
5. Customer Support
Another equally important factor to consider during a payroll conversion is the level of customer support and training provided. Your trainer should create a training plan to meet any unique development needs. You want to feel confident that your support team is readily available and highly responsive to issue resolution for an excellent experience.
When determining the level of support offered by a payroll provider, some questions to ask include:
- What professional payroll certifications do the support staff hold?
- Will I receive a dedicated account manager and team?
- Is the support staff available via phone or email?
- What are the support staff’s response times?
- Are there specialists available to help with more complex questions related to benefits and ACA compliance?
6. Customer Reviews
When reviewing software review sites, consider the following:
Are You Getting the Support You Need?
Learn more about why APS support is top-rated for our focus on the customer experience.
How to Get Your Company On Board
While these six considerations are important, remember to communicate how the change will benefit both executives and employees. Executives will have access to real-time data reports for insight into accounting, general ledger, and labor costs.
Automated payroll systems reduce the burden many employees feel on a daily basis by eliminating manual tasks. Payroll technology is designed to help them perform their duties, not replace workers entirely. To reinforce this message, demonstrate how the implemented solution is an asset to the employee with instant access to:
- Pay stubs and tax forms
- PTO balances and time cards
- Benefits enrollment information
Select and Implement Your New Payroll Solution
When selecting and implementing new payroll software, there are several factors to consider for a successful conversion. You don’t want to invest money and time implementing a payroll solution that doesn’t solve your business challenges.
Make sure you choose a knowledgeable payroll and tax compliance provider. Check to see if they have a reputable track record for customer retention. Implementing a new payroll solution can be overwhelming, which is why it’s essential to do your due diligence.
Research different providers to determine the best fit for your company’s needs. Then, communicate with your employees about how they’ll benefit from the switch. Taking these steps will lay the foundation for major growth in your company’s future.
Let's Make Payroll and HR Easier
See why APS’ award-winning technology and services have earned us a 98% customer retention rate.
Check out more great articles from the APS Blog covering HR, payroll, and everything in between.
While some nonprofits are tax-exempt, they still have to pay payroll tax. But which payroll taxes are 501(c)(3) nonprofit organizations responsible for? Find out!
Organizations are looking for ways to gain a competitive advantage in the labor market. Learn how financial wellness programs can help!
APS has partnered with Immediate to offer earned wage access services to our customers and their employees. Learn more!
APS has been recognized as a top HR provider for support on G2. Learn more about how this achievement can help you today!
With more people working remotely, it’s important for employers to understand how payroll taxes for remote employees work. Learn how here!