Top 8 Considerations When Switching Your Payroll Software 

Top 8 Considerations When Switching Your Payroll Software

Getting the right payroll software is vital for the performance and satisfaction of your employees. Not to mention the timesaving benefits since you avoid hours of manual work. You should switch to a new provider if your payroll software is not up to scratch. 
Payroll is difficult for most businesses to manage. If your current payroll software doesn’t deliver the expected results or you are experiencing issues, the payroll process becomes tedious. When you have had a negative experience, you may be in a hurry to jump and get started on a new payroll software right away. However, it’s important to consider the following factors to make the switching process effortless:

Identify the Best Time to Switch

While you can switch payroll software anytime, it is important to wait until the end of a quarter or financial year to minimise the amount of data migration required. If you wait for the end of a financial year, it makes the switching process convenient. Usually, switching at the beginning of the year involves minimal data transfer. You only need to migrate the historical data useful for running the business. You can start using the new software with zero balances. Ideally, changing payroll software mid-year or at the end of a quarter is challenging. However, you can still switch to a new provider if you have a structure or contingency for smooth data migration. When you switch mid-year, ensure the information is transferred correctly to avoid errors in tax reporting. For instance, you must update the financial calendar and ensure employees’ earnings and deductions are up to date. 

Transferring the Data

Before you change your payroll software, confirm how data transfer will be done. Can you import the data electronically, or do you have to transfer the data manually? Some software providers require you to import the data, which is extremely time-consuming manually. However, some companies perform data migration for you and run tests to ensure the data transferred is correct. Before the data transfer, evaluate the areas of your business affected by the switch. You should also identify redundant processes that you no longer need related to the historical data. A reliable software provider should provide data migration support to facilitate an effortless transition.

Perform Parallel Payroll Runs 

Once you complete the data transfer process, ascertain the accuracy of the information by comparing old records with the transferred data. You can ascertain that everything is correct by running both payroll software side by side. A parallel payroll run helps you identify system mistakes and ensure everything transitions smoothly. 
During a parallel run, you use the old and new payroll systems and generate reports for comparison. You can cross-reference the information on the payroll history by checking the deductions and earnings of specific employees. Discrepancies are common, especially if the new payroll software uses the latest tax tables or has different pay groups. Inaccurate translation tables sometimes also affect the accuracy of the data.

What Resources Do You Need for the Transition?

Implementing a new payroll software requires resources. For instance, you need someone to complete the installation and confirm the data’s accuracy. Before committing to a new payroll provider, find out the resource you require to set up the new systems. Does your new provider offer installation or consultation services? If the payroll vendor provides setup support, it can minimise the challenges involved in installing the software. 
Even with the installation and setup support, you still need to assign the duties of overseeing the process to one of your employees. The process can be time-consuming, and you should reserve adequate workforce and resources to ensure a smooth transition.

Payroll Management Procedures

Every payroll software has a unique system for managing payroll services, like tax remittance and calculating deductions. It is important to consider the payroll tax management procedures of the new software before switching. Can the new payroll software meet your business needs? For instance, does the software accommodate the unique requirements for your industry, like benefits and statutory deductions? Some items to evaluate when choosing payroll software vendors are updating tax records and distributing tax updates. 
Find out the process involved in creating a tax table and updating the information. Some of the tax information in the tables include statutory deductions and taxes. Your payroll software should accommodate all employment taxes and allows the creation of additional tax tables. You should also update the tax tables with minimal disruptions to the payroll processing. 

Technology Requirements

When changing to new payroll software, ensure it meets the technical requirements that your business requires. Some of the technical considerations include: 
• Cloud or on-premises software: Does your software provider have cloud capabilities? Before switching, ensure the payroll software offers the technology options suitable for your business. Cloud-based software is popular due to its convenience, speed and security. However, if your business has a limited bandwidth, you can get on-premises payroll software. 
• Technological limitations: If you are changing to on-premises software, ensure you have suitable hardware and sufficient storage. Cloud-based software should be compatible with various software for easy access. 
• Integrations: If your business uses other applications that need to be integrated with the new payroll software, check for compatibility issues before adopting a new system. Most businesses use payroll software alongside point of sales systems, CRMs and HR software. Ensure the payroll software offers integrated reporting to minimise duplicated data entry and unnecessary paperwork. 

Vendor Track Record

Managing your payroll well provides many benefits to your business. Hence, choosing the best payroll vendor is important since there is no room for mistakes. Select a payroll software provider with a proven track record of offering the best payroll management services. If you had trouble with your previous payroll provider, ensure the payroll software you choose doesn’t have shortcomings. For instance, ensure the new payroll software delivers comprehensive tax tables and completes the payroll processing on time to avoid delays in paying employees. Delays in remitting taxes and statutory deductions to the relevant authorities can also cause penalties and fines. 
Ensure you check the history and experience of the payroll software provider. You can find reviews online if they have been in business for a few years. The number of clients using the software shows the vendor’s authenticity and stability. 

Ongoing Support

One of the major reasons for switching a payroll provider is a lack of support. Hence, you should evaluate the vendor’s quality of customer service before switching. Payroll software requires ongoing support due to the updates required and technical uncertainties that can cause lapses in the system. Find out the level of support provided, what the support package covers and the associated costs. It is also worth knowing the support employee you will be dealing with. Is it a technical or payroll support expert with the necessary certifications? Does the provider offer a range of support services like phone calls or self-service web-based support? High-quality support is essential for ensuring a successful relationship with the vendor.

To conclude : Switching to a new payroll software provider can be hectic if you don’t know what your business needs and what to look for in a reliable vendor. The above factors ensure you receive the best payroll services from a reliable vendor and a seamless transition process. The most important consideration when looking for a payroll software provider is choosing an experienced vendor with a good track record. When the vendor is reliable, they provide high-quality services and ongoing support. You also enjoy a smooth transition if the vendor offers support during installation, data migration and implementation of the new payroll software

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