When choosing a new payroll software provider, it’s always important to consider what is best for both your business and employees. However, if making a switch has been on your mind, there are some specific reasons why year’s end can make good business sense. But what are some of the most common reasons why businesses decide to make a change?
This could be as simple as your current vendor missing tax filings throughout the year. Or perhaps mistakes aren’t being made, but the customer service is subpar. On the other hand, you might want to start working with a company that proactively keeps you informed about state changes and guidelines, so that you can stay focused on growing your business.
In this primer, we discuss why many businesses use the end of the year to switch providers, things to look for, and some questions to ask when shopping around.
Start with a clean slate
A lot of business owners take advantage of year’s end to review operations across the board. For example, it can be a good time to:
- Review and plan budgets
- Evaluate employee performance
- Determine if all the services that you are paying for are worth the investment
It’s natural to evaluate what’s moving the needle forward toward your business’s goals. For many companies, this includes the payroll software they use. On one hand, it can make financial sense, and at the risk of using a well-worn cliche, it truly can be a fresh start. One of the reasons we see businesses moving to a new provider at year’s end is that they don’t have to worry about migrating prior wages.
Here’s why: When a business transfers to a new payroll system at the end of the year, it means that you’ll start running payroll with them at the beginning of the new year. By doing this, you won’t need to enter employee wages from the previous year.
It adds up to tons of time-savings and should make it easier to track all of your financial records. Because you will be starting payroll with the new vendor on January 1, the company will have everything you need to file both your quarterly and year-end tax forms.
Does your provider make you feel confident about compliance?
Does your current provider proactively share updates on changes in legislation or guidance on legal requirements? What about keeping you up to date on compliance with workers’ compensation requirements and the increasing number of state-mandated retirement plans?
Moving to a new provider that stays in the know — and shares information in a timely manner — can help you avoid fines and penalties. In addition, there can be a lot of things your business is responsible for that your payroll provider doesn’t offer as a service but can provide guidance on when you need a hand. For example, keeping you apprised of annual state and federal updates so that you don’t miss deadlines. Or sharing information on state tax reciprocity when employees are traveling from neighboring states to work for you.
The takeaway is that there’s a lot to keep up with, so make sure that your business is not just another cell in the software provider’s spreadsheet. As your company scales, the payroll company needs to do more than just crunch the numbers.
Providers are usually running promotions
Just as most businesses are looking to close the year’s business on a high note and may run special offers to achieve their goals, some payroll software providers also advertise promotions. If you have ever thought about switching providers, some companies offer risk-free trials that allow you to see if there is software to better suit your business needs.
Some reward referrals throughout the year
Establishing a new relationship with a payroll software provider may create additional revenue opportunities for your business. For example, OnPay occasionally offers referral programs in which business owners who recommend our software can earn cash when a company signs up. Do you know business owners who use their network to get recommendations for products and services and often find yourself suggesting vendors that you do business with? It could make sense to look for a provider that rewards referrals.
Do they have the integrations you need?
Though many providers offer different integrations, is there one that you need that your current payroll software lacks? Many modern solutions are plug-and-play, allowing for easy integration with existing software systems, such as Xero and QuickBooks. In addition, it can be overwhelming to keep tabs on everything your business is responsible for.
Can you count on your provider to have partner relationships to make running your business easier? For example, ensuring that you can easily order compliance posters for your workplace — pretty much a must-have for any business. Or partner integrations that save time by instantly registering with state agencies for your withholding/income and unemployment tax IDs.
In addition, as the calendar year ends, it can be the right time to take stock and see how much it actually costs your organization to run year-long payroll. For example, some providers charge extra fees to pay employees in multiple locations. Or you may be in growth mode, and as you scale, your current payroll system could be changing in ways that impact your investment. Or you may even be stuck with a feature set that you’re not using as much as you’d like, or one that no longer fits your needs.
The takeaway is that by reviewing budgets and doing some research at year’s end, you may discover that you’ve been coming out of pocket for services more than you had planned. With many payroll software providers on the market, like OnPay, that could be more cost-effective, shopping around could add up to savings in the new year.
Questions to ask
If you’ve decided that the time is right to find a new payroll provider, here are some tough questions to ask that can make the decision process go more smoothly:
- Does pricing include year-end filings, W-2s, and 1099s?
- Do you automate federal, state, and local tax filings and payments?
- Does the price include running payroll in every state?
- Will it be easy to add my accountant to the new system?
In this free payroll shopping checklist, we have organized the questions above plus others to ensure that you are covering all of the bases.
Customer service you can count on
The cost savings made switching to OnPay an easy decision for me and my business. Plus, the OnPay website is simple to use and the customer service is outstanding.
— Jason Taylor, Surety Home Care, LLC
Use year end to explore a switch
Switching to a new payroll provider at year’s end can make a lot of business sense. With so many companies using this period to plan budgets for the new year, it can also be a good time to look for ways to more efficiently run operations. So, if you are looking for an integration that your current provider does not offer or want to see if switching provides more value, we invite you to look at OnPay’s limited-time offer.