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How to Switch Payroll Services Smoothly

April 6th, 2023 | 5 min. read

By Kacie Salsbury

While stationed in 29 Palms, California, my husband and I surprised our children with a short vacation to Palm Springs. We were excited, having booked reservations at a small resort hotel not far from there, in Desert Springs. The brochure displayed beautiful rock walls throughout the main entrance and dining areas and a large pool surrounded by cutely decorated rooms.

Upon arrival, it was my husband and me who were surprised most, as we discovered that the “rock” walls were made of plastic, the “large” pool could comfortably accommodate a small family, and our “cute” room had bars outside the windows.  And while our “unexpected adventure” has since become fuel for punchlines and funny memories, sometimes not knowing what to expect can keep us from venturing out at all.  

The good news is, transitioning to a new payroll service provider does not have to be a mysterious and scary journey.  Let’s discuss the key steps along the payroll path so you can move forward with confidence.  

Step One:  Bringing the correct documents to your Kick Off Call

Every journey begins with a single step. For us, that first step is the Kick Off Call. This short meeting is designed to gather the details needed for the proper set up of your company in our systems. Other providers sometimes call this a “discovery call.” Preparing for this meeting helps the conversion process begin promptly, as lack of information is generally the biggest hurdle to getting started.  The kinds of details you should bring with you are: 

  • Bank Account details – Be ready to confirm the accuracy of the bank account that will used for payroll funding. 
  • Payroll Tax Returns – In order to ensure all historical data is converted correctly, it will need to be verified against your previously filed payroll returns (Quarterly 941 and State Unemployment Returns, and annual 940 Return).  Most payroll providers have archived copies of these available, but if you are transitioning from a software system (such as QuickBooks Desktop) or a third-party payroll processor (such as a former accountant), then it may be necessary to locate copies of these returns yourself.  Typically, returns for the full previous year and any completed quarters of the current year will be required. 
  • PTO Policy – If you currently offer a Paid Time Off benefit, bring a copy of the written description as it is presented in your Employee Handbook.  Be sure to mention how you are currently tracking employees’ balances and requests, so that these can be included to run with your first live payroll. 
  • Current Payroll System Access – Not all new providers will request access to your current payroll system, but at Whirks, we want to remove the burden of having to find, print, send, and resend reports as we progress through the conversion process.  Providing the login credentials to your current payroll system allows all needed data to be pulled directly, which significantly expedites the process.  An important element to having direct access, however, is having the type of access needed.  Be sure the login account you provide includes “full administrative access,” with (ideally) the ability to create custom reports.  For QuickBooks software, you will either need to send a backup copy file (QB Desktop), or a user invitation (QB Online). 
  • Key Contacts – Knowing who to reach out to with questions and to schedule additional meetings is an essential part of getting started on the right foot.  Be sure to specify who is responsible for the various payroll processes, such as inputting payroll data, managing employee records, onboarding new employees, and approving PTO requests.  Identifying the best means of contact for each person is also incredibly helpful. 
  • Questions and Concerns – The Kick Off Call is meant to set both parties on the same foot moving forward, so be sure to bring up anything you find odd, unclear, or concerning about your current payroll processes or what lies ahead.  Ask any and all questions you have so that upon the conclusion of the meeting, you will have the confidence of knowing what is expected of you, what you can expect of your new provider, and how you can best communicate the upcoming changes to your employees. 

After your Kick-Off call, our team will start the process of migrating your payroll information over in our systems. Want to learn more about what implementation looks like with us? Check out this article.

Step Two:  Discontinuing services with your former provider

Of course, taking a new road means leaving the old one behind. Depending on the details of your current payroll contract, be sure to give notification of your desire to terminate services within the required time frame. Keep in mind that unexpected situations, such as out-of-town travel or lack of access to data, can sometimes require the initial projected “Go Live” date to be extended, so it is best to confirm the status of your conversion with your new payroll provider before notifying your current provider of your termination. When you do submit your termination request, be sure to verify the following details: 

  • Filing Current Quarter Payroll Returns  – The payroll provider that processes the final payroll (check date) for the quarter will be the one responsible for filing that quarter’s payroll taxes. 
  • Filing Year End Payroll Returns and Issuing W2’s (if applicable) – If you are transitioning payroll services close to the end of the year, it is particularly important to confirm who will be handling the filing of your 4th Quarter payroll taxes, as well as your annual 940 Federal Unemployment Taxes, and issuing your employees’ W2s.  Leaving this unclear can result in both companies filing on your behalf, which will result in notices from the IRS and the Social Security Administration. 
  • Refunding of Collected Tax Payments – Unemployment tax payments are made when returns are filed, but many payroll companies impound the amounts due with each payroll to ensure funds are available when needed.  These funds will need to be “transferred” to your new payroll provider which is done by your current provider refunding you all previously-collected payments, and your new provider collecting the “back tax payments” for all payrolls within the current quarter. 

Step Three:  New systems training 

The path is always hardest when it approaches the unknown. That’s why the most difficult part of the transition process comes just days prior to your first live payroll -- when the reality of leaving behind the familiar and learning a whole new system comes into view. At Whirks, our Payroll Training meeting provides a thorough demonstration of the isolved platform, along with step-by-step instructions on how to enter, review, and submit your payroll data for processing. Here are some tips to ensure this key step in your conversion process is successful: 

  • Schedule Wisely – There’s one thing every payroll has in common: a deadline.  And approaching deadlines can bring anxiety. Therefore, schedule your Training Meeting for a day and time that allows you the ability to learn the new system at an unhurried pace, as well as complete and review your payroll for accuracy before submitting for processing.  Een better, if you are able to bring your employees’ hours records with you to the Training Meeting, that data can be used during the demonstration, getting you one step closer to being done shortly afterward. 
  • Eliminate Distractions – The right environment is essential for gaining the full benefits of this Training time. To the best of your ability, join from a room that is away from free-flowing traffic and interruptions. Set temporary notification restrictions on any apps that may pop-up and grab your attention during that time. Most importantly, don’t participate from a mobile device where you will have difficulty seeing the shared content.   
  • Raise Your Hand – As with all new experiences, you are bound to have many questions. Take full advantage of your training time by asking boldly! At the beginning of the meeting, mention any questions or concerns you want to be sure are addressed. Don’t hesitate to say something if something appears missing or incorrect. Our goal at Whirks is to help bridge the gap between “new” and “known,” which is why we welcome any questions you may have. 

Hopefully, these pointers help eliminate some of the mystery (and concern) of changing payroll service providers.  Knowing what’s needed to get started, how and when to discontinue services, and what to expect as you learn the new processes can help make it a more pleasant journey. And while there’s no way to avoid all the bumps in the road, at least you can have the assurance there won’t be any cliffs! Or plastic rocks!  😉    

Looking to switch to Whirks for your payroll needs? Keep learning about us by checking out our demos , visiting our 2023 pricing guide, or reading about what’s included in our Payroll Agreement.  Ready to talk right now? So are we.

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