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August 31, 2017

How to switch payroll providers smoothly

How to switch payroll providers smoothly

Do you feel trapped in your payroll service and find yourself wondering how to switch payroll providers smoothly? 

Well, the old answer to that question used to be "you can't." 

Switching payroll providers used to mean having to manually track down and take all critical information--such as sensitive info belonging to your employees--before walking out the door. 

Thankfully, that's not the case anymore. 

Whether you use a PEO or a payroll firm, sometimes it can feel like your paying too much for too little.

So how do you go about saying goodbye to your old provider?

Thanks to the information revolution leaving your payroll provider has never been easier. 

Check out these tips on how to switch payroll providers smoothly. 

Know why you're leaving

The truth is it's hard to figure out how to switch payroll providers smoothly if you don't have a good idea about why you're leaving in the first place. 

Of course, there are a lot of valid reasons why you might want to leave.

That includes:

  •  better service
  • your current provider's system is outdated
  • your company is rapidly growing
  • You're being overcharged

A word to the wise however: 

Don't leave just because someone else has offered you a cheaper price. 

Saving money is a perk only up to certain extents. Yes, you should always look for a payroll provider that's willing to negotiate, but you don't want to give up quality for a cheaper price

Instead, make sure that the provider brings more to the table than just a tempting price. 

Do your research

Which brings me to my next point.

If you really want to know how to switch payroll providers smoothly, here's the key:

Compile as much information as possible about the company you plan on switching to.

Especially when it comes to payroll, reputation is everything.

Someone can offer you a great price, but if they have horrible reviews online, or sound too good to be true, you probably want to steer clear. 

And don't just depend on google reviews either. 

Confer with other business owners and find out what they think about that particular company. Look into the provider's clientele and even see if you can reach out to some of those customers to get their opinion on the service.

Also take a look at the provider's record on your local Corporation Commission's website.

Plan ahead

One of the biggest mistakes you can make when switching payroll providers is making the move too soon.

You wouldn't cancel your car insurance before you secured a plan with another company, right?

The same goes for payroll: one brash decision and you can find your company (and your employees) stranded without a back up plan. 

Although it might be tempting, don't tell your payroll provider "goodbye" just yet. Instead, make sure you have another plan with a different provider in place before you leave. 

This on its on its own is how to switch payroll providers smoothly. The reason is simple:

Neither you or your employees will notice a break in service. Additionally, this gives you the right amount of time to find the perfect service for you. 

Also, planning ahead will help you avoid any cancelation fees because you'll be able to determine when your contract ends (if you have one) and plan accordingly. 

Collect your employee data

Just like you trust your employees, they are also counting on you to keep their personal information safe. 

Additionally, having to give all of your employee information to a new provider all over again can be complicated and down-right inconvenient. 

Collecting that information from your old provider before you leave, however, takes all of the hassle out of the process. 

You won't have to worry about the security of your employees' information and you also won't have to worry about compiling that data again. 

By collecting it one place, you can simply turn over that information to your new provider when it comes time.  

Compare payrolls

When it comes to payroll, accuracy is the most important thing. 

The last thing you want is to end up paying for a payroll service only to end up also paying for costly mistakes. 

That's why it's really important to double check your new payroll against the old. 

One of the best ways to do this is to run a parallel payroll before leaving your old provider. 

That way you can catch any errors before they become big problems and discuss them with your new provider. 


At the end of the day, knowing how to switch payroll providers smoothly is all about having a strategic exit strategy.

Although it takes more work, it's definitely worth it. Finding payroll firm that's accurate and provides great service at a reasonable price all while having the peace of mind is never overrated. 

Don't overlook these tips. They can be the difference between spending hundreds of extra dollars on payroll and finding a system that fits your needs and your budget. 

Follow the above steps and you'll spend less time worrying about your payroll and more time getting it done. 

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Felix Mwania

I live in the intersection of technology and entrepreneurship. I am a technology enthusiast but my passion is helping small businesses succeed, including mine.

When I am not working, you will find me goofing with my wife and kids. When not with family and/or friends, you will find me doing some home improvement projects.

Felix Mwania


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