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Check out our weekly blog posts and see the latest news and discussions happening in the HR world of business.

When is it Time to Upgrade Your Payroll System?

When you first started your business, you probably ran your own payroll, until one too many mistakes or simply a lack of time forced you to explore the wonderful world of payroll systems; And what an upgrade it was! You felt supported by the company that you purchased the platform from and after ironing out a few kinks, everything seemed to be humming along nicely… until it wasn’t. Now your customer service rep has all but ghosted you and you find that the task of preparing payroll is becoming more cumbersome with every pay period that passes. 

So, is it time for an upgrade? Below, we outline a few of the red flags that could signal it is time to move on, as well as how can you be sure you are getting a system that will really work for your business. 

Inaccurate or late paychecks: 
Running payroll should be straightforward, you tally up your workers hours and you cut them a check for the hours that they work. However, we all know that it is never quite that simple. Between withholdings and various other deductions workers have, it can prove very tricky to get it right every single time. However, if you do mess up, it’s not just an inconvenience to your workers that live paycheck to paycheck  but it can also land you in some significant legal trouble. This can end up being extremely costly to your company (and frustrating to your employees), even if it is purely unintentional. What it boils down to is either a system that isn’t capturing the appropriate data and automating the process to remove as much opportunity for human error as possible, or a system that is glitchy and encounters multiple problems that can delay your ability to cut your workers’ paychecks in a timely fashion.

Spotty (customer) service: 
As we touched on briefly in our intro, one of the most common problems with a payroll system provided by a sub-par provider is that they tend to let the relationship fizzle! When you announce you’re in the market for a new system, they are there every minute of every day, courting you and telling you how they will always be just a phone call away. In the beginning, that may just be true. From walking you through the install to providing training on all the bells and whistles of your new system, they could not have been more hands on and should a question arise, in those early weeks, it was so easy to get an answer! However, in the ensuing months, maybe even years, the honeymoon period drew to a close and all you were left with is a system that works some of the time, that you can’t get to do half of the things that they promised they could. if you think this “ghosting” is a figment of your imagination, take head in the study data, which finds that 84% of companies have experienced customer service issues related to their payroll service provider and as a result, suggest that a strong customer service platform will prove more important than the system itself when it comes to selecting a new provider. 

Failure to thrive: 
When you first signed on with your current payroll purveyor, we are confident that they promised you the world. And, maybe they delivered on everything that they promised, until a new need popped up for your business, and suddenly, they just didn’t have the capacity to adapt to this new intricacy. Perhaps it’s being able to access the system without being physically in the office which has proven especially important in today’s post-pandemic environment. Either way, the current system is no longer living up to what was promised and it’s time for you, as a business owner, to look critically at the current system and determine whether it is meeting your needs and whether it will be able to adapt with you as your business organically evolves. 

High cost fear factor: 
There’s an old saying that “sometimes the devil you know is better than the devil you don’t.” Turns out, many business owners believe this to be true when considering a new payroll system. Folks are not only scared about having to learn a whole new system from scratch, but are also nervous about the upfront costs of implementing a new system, which not only includes the technology and software, but also has those “hidden costs” of training and ramping up. However, if you continue to insist on working with a system that isn’t working for you, is it really that useful? Are you or members of your payroll department spending hours manually mining data that another system could pull for you in just a few clicks of a button? Or, as we touched on earlier, is your current system so unreliable that it is making egregious errors in your payroll that could land you on the receiving end of a lawsuit, making it not only ineffectual but an actual financial liability? 

What should you look for in your new provider and what can you do to prepare for making the leap? 

The first thing you need to do is some serious homework! Sure, you’ll want to do research to identify some potential payroll providers in your area or industry, but you’ll also want to carve out some time to really speak with someone who can give you the lowdown on how their company operates and what they can do for your business. For example, if you’ve identified a need that couldn’t be met in the past, ask them whether this is something that they can accommodate and what that process would look. At this point, you can also ask that they come and demo the system in your office so that you and perhaps some other trusted stakeholders can see the platform in action and understand what sets it apart from others in the field. 

In addition, because processing payroll can prove to be a breeding ground for errors, you’ll want to get a handle on what their system can do to prevent errors from occurring and what stop-gap measures they have to alert you if something is awry. For example, some companies, Abel HR included, have their payroll certified by an accountant to ensure that no errors slip through the cracks, which comes on top of a system that flags anything and everything that looks even a tiny bit unusual for further review.

Now, of course you want to avoid the same pitfalls that got you into this pickle in the first place, so you should certainly look for a payroll provider that puts customer service front and center. Specifically, you will want to understand the process for contacting them about a problem, how many representatives are available to address concerns, and what is their average turnaround time from query to resolution. In addition, you will want to back up these claims with some reviews and recommendations! In fact, ask if it would be possible for you to call one or two of their current clients to really get a handle on how they perform in the real-world setting. This area, in particular, is one in which a PEO can really shine because we are so much more than just a payroll software system. We’re an integrated part of your business and thus a better understanding of how you operate so that we can anticipate your needs and tackle any issues head-on before they become true problems.

And finally, from a logistical standpoint, you need to understand how much this new system is going to cost you and how long implementation typically takes. In addition, you’ll want to check the contract that you signed with your current payroll company to ensure that there aren’t any restrictions that would prevent you from making the leap, such as a non-compete, or merely a contractual obligation to finish out a pre-determined period. If you are not sure what your contract means, you can reach out to the company directly for clarification as they can best answer your specific question.

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