If you’re thinking of switching your payroll from one provider to another, PAUSE! Don’t make any sudden moves.
Before you cancel your current payroll service, find out how long your next provider needs to get started – and be aware that many services over-promise.
You don’t want to be left hanging. Let’s talk about why some services say they can deliver “instant” payroll but fall flat on their faces.
At CSI Accounting & Payroll, we’ve provided financial services to small businesses for nearly 60 years. That means we’ve talked to hundreds of businesses whose payroll has gone wrong due to rushed setups from other providers. They’ve asked us:
- What is the typical turnaround for running payroll with a new provider? Can it be rushed?
- What errors can occur when a new provider runs payroll too quickly? How can they be fixed?
- Why does it take CSI about two weeks to run a new client’s first payroll?
Average Turnaround for Payroll With New Providers
When switching payroll providers, you need to know how much notice to give so you’re not left in limbo (with neither provider available at the time to help you).
So, let’s talk industry averages and rushing payroll.
Average Payroll Onboarding Time
Some business owners are shocked that we say it will generally take two weeks. It makes them wonder, “Is two weeks normal? How long does it take for every other payroll provider?”
Whether you’re looking at the big-name providers or other small providers like CSI, you’re typically going to be told it will take two weeks at a minimum.
Rushing Payroll Onboarding
What if you need it faster? Can’t wait to get onboarded with a new payroll provider? There are three options to speed up your first payroll with a new provider, which are to:
- Find a provider with an onboarding team. If a big-name provider has enough staff that they can exclusively dedicate to onboarding, the timeline might speed up.
- Handle your own setup work (if you know what you’re doing). If you think you can speed it up even more, the big guys may let you do this. (But most small providers won’t. This is to avoid errors that would slow you down. We’ll talk about them in the next section!)
- Request a rush and see if it can be negotiated. Some rules have exceptions. Your payroll setup may be faster if you have fewer employees or if you just bought a business and got a new EIN, for example.
What about rushing with CSI? Well, we’re known for fairness. We treat all of our clients the same, regardless of their size, revenue, or their investment with us. That includes onboarding times.
We want to make sure that our onboarding is treated on a “first in, first out” basis, prioritizing those who get us the information needed to start the payroll services first. Not to mention, we still need to run regular payrolls for all of our other clients, too!
While we could potentially increase the speed of your onboarding, we want to make sure we treat the rest of our clients fairly, and we want to avoid potential issues that could occur if we rush your onboarding too much.
Rushed Onboarding Problems & Solutions
How can running payroll too quickly “mess it up”? Let’s talk about the problems that can stem from switching and rushing payroll, plus the ways to fix these problems.
Problems
Problems with rushing payroll with a new provider can include:
- At least one employee not getting paid or being paid incorrectly. This can also include the hours worked being incorrect.
- Missed pre-tax or post-tax deductions.
- Incorrect tax payments. This can also include missed tax limits, resulting in overpaid taxes.
- Payroll not being processed or run on time.
Don’t forget to watch out for these red flags that your payroll is wrong!
Solutions
Luckily, many payroll mistakes can be fixed. Here are some examples of how CSI has fixed payroll problems in the past:
- Free, single-use calculators. For emergency individual payroll runs (instead of long-term issues), we’ve recommended using Paycheck City to help calculate individual paychecks.
- Payroll advances. We’ve done this for new clients when payroll is not ready to be run but their employees expect a paycheck.
- Fill the payroll gaps from other providers. We’ve had many clients give notice of their last payroll with us, but their new provider takes too long with onboarding. In these instances, we’ve continued running their payroll until the new provider is ready.
Ultimately, we’re going to do what it takes (within reason, of course) to get your employees paid accurately and on time.
Why It Takes CSI at Least Two Weeks
So, why two weeks or more? There’s a lot of heavy lifting before your first payroll can be run with a new provider!
First off, we need to understand what’s involved with your payroll. What add-on features do you want, and what complexities do you have? We form a checklist with this information.
Next, we access your current payroll system so we can put your employees’ data into our system. That information includes things like:
- Addresses and Social Security numbers.
- W-4 settings. This can include their filing status, allowances, and additional withholdings.
- Deduction and pay items. They may include benefits, garnishments, and bonuses, for example.
- Direct Deposit bank details.
We’ll also collect your business’s payroll data. It can include your:
- Federal Employer Identification Number (FEIN).
- Business address and entity type. This can be Sole Proprietorship, Partnership, S-Corp, C-Corp, and even LLC.
- State tax IDs and unemployment account numbers.
- Payroll tax deposit schedules.
- Bank details.
- Payroll schedules and frequencies. It can be weekly, biweekly, semi-monthly, or monthly.
- Workers' compensation policy details.
Finally, we need to look at year-to-date (YTD) data from your prior payroll runs. This is because certain taxes have limits, so payroll will not be the same all year long, even if wages and hours stay the same. Payroll cannot be run accurately with a new provider until this is accounted for. That means we need to make a spreadsheet of current-year things like:
- Hours worked YTD.
- Wages paid YTD. This includes the categories of wages, such as overtime, commissions, and bonuses.
- YTD deductions. Examples include medical insurance, 401(k) contributions, dependent care FSA, and other pre-tax or post-tax items.
- YTD withholdings for taxes. This includes federal, state, and local taxes.
We believe that other payroll providers (especially “instant” ones) run into delays because they don't get all those things imported into their system in time to run your first payroll with them. Not only that, but they don’t factor in processing time. You need payroll to be processed several days before payday.
Fortunately, CSI remembers to factor in our processing time when we give our setup time estimate. This allows us to handle the onboarding work that is required before running accurate payroll for a new client.
Get Accurate Payroll Setup in 2 Weeks!
Now that you know that two weeks or longer is a standard payroll onboarding period, how rushing can cause errors (but also how they can be fixed), and what goes into running a client’s first payroll that makes it take two weeks or more, are you ready to check out payroll services with CSI Accounting & Payroll?
To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about how and when to switch payroll providers.
