Changing payroll service providers can seem daunting, but with careful planning and execution, the transition can be smooth and efficient. Here’s a breakdown of what to expect during the process:
**Timing:**
The ideal time to switch payroll providers is at the end of a calendar year. This eliminates any confusion regarding tax form responsibilities. The new provider assumes responsibility for all forms, deposits, and payments starting January 1st, simplifying reconciliation and ensuring accurate reporting. Changing at the end of a calendar quarter (March 31, June 30, September 30) is the next best option. However, you can technically switch providers at any point during the year if necessary.
**Forms:**
The new payroll service should supply a comprehensive set of forms, including:
* Bank authorization forms
* Employee data forms
* Direct deposit authorization forms
* Company information sheets
* Tax deposit frequency information
* Forms detailing earnings, deductions, benefits, and accruals
* Payroll submission information
* Powers of Attorney forms
These forms provide the necessary data to set up your payroll according to your specific needs. The Power of Attorney forms are crucial, allowing the payroll service’s CPA to communicate directly with the IRS and state tax agencies on your behalf, streamlining issue resolution.
Also, the forms packet should include the privacy policy for your payroll files. Look for a policy that ensures information is only released under a court order.
**Procedures:**
After you submit the completed forms, the new provider should clarify any information and provide additional forms if unique circumstances require them. They should also provide thorough training on how to input payroll data and any additional steps you need to take to maintain accurate records. This training should cover the payroll entry process and address any questions you or your staff may have. The provider should confirm the first entry date and payday, ensuring a clear understanding of the timeline.
After processing the first payroll, the provider should review the reports and output with you to ensure accuracy and address any remaining questions.
For related information, consider exploring these articles:
* Reasons to Change Payroll Providers
* What to Look for in a New Payroll Provider