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As we approach the end of 2023, payroll professionals across Canada face an important decision: is it time to switch payroll software providers? Transitioning to a new system can be a painstaking process, but doing it before the end of the year offers a tidy, organized shift that aligns with tax seasons and fiscal calendars.
The first step in the journey is knowing why you're embarking on it. Are the features of your current software outdated? Is customer support lacking? Or perhaps you’re looking for a more cost-effective solution? Identifying the reasons for change will help you pinpoint what you’re looking for in a new software.
Pre-Switch Preparations
1. Regulatory Compatibility
Ensuring that your new software is compliant with Canadian payroll regulations such as CPP, EI, and income tax deductions is paramount. The new system should be equipped to handle federal and provincial tax codes and comply with the Canada Revenue Agency's and Revenue Quebec’s guidelines.
2. Customization and Scalability
Every business is different, and your payroll software should accommodate that. Look for customizable features and reporting tools. Additionally, the software should be scalable to fit the size of your business as it grows or downsizes.
3. Integration with Existing Systems
Your new payroll software must play well with the other digital tools you're using. This can range from accounting software to human resources information systems (HRIS).
4. Budget and ROI
While more advanced software might be appealing, it also needs to make financial sense. Consider not only the upfront costs but also for long-term ROI.
Planning the Switch
5. Timeline
The end of the year is often an optimal time to make the change. This aligns with annual tax cycles, making it easier to reconcile records.
6. Contract Obligations with Current Provider
Review the contract with your current provider. Are there any exit fees or conditions that you should be aware of?
7. Data Migration Plan
Data migration can be a significant pain point in switching systems. Prepare a comprehensive plan detailing what data needs to be transferred and in what format.
8. Running a Parallel System
Before fully committing to the new system, it’s wise to run both your old and new payroll software side-by-side for at least one payroll cycle. This allows you to catch any discrepancies.
Execution
9. Staff Training
Once the software is selected, prepare your team with the required training. This should ideally be done during the parallel run phase so employees have a hands-on understanding of the new software.
10. Final Reconciliation and Reporting
At the end of the year, complete your final payroll reconciliation and tax reporting on the old system before transitioning completely to the new system. This ensures that all data is up-to-date, compliant, and aligned with the Canadian tax year.
11. ‘Go Live’ and Support
Once you go live with your new system, make sure to keep a direct line to your new provider's support team for any bumps along the way.
12. Post-Switch Evaluation
After you’ve run a few payroll cycles on the new software, evaluate the switch based on your original criteria for making the change. Are you experiencing the benefits you’d hoped for? Make adjustments as needed.
Switching payroll software providers is not merely a technological shift but a strategic business decision. For Canadian payroll professionals, the additional layer of federal and provincial regulations makes this all the more critical.
For more expert insights, watch this webinar where Mélanie Crépeault from Paie Guru shares great tips on how to smoothly and efficiently implement an HCM system aligning your payroll practices for a successful 2024.
If you ever switched payroll software providers, how much time the implantation took?
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8 Comments
Great outline. The more preparation, the better the outcome. Taking the appropriate time to implement will benefit the organization.
11 months agoExactly! Thanks, Denise.
11 months agoIn two of the implementations that I have been involved in, it was about a year each, and with the one we ran parallel systems. In the third most recent one, it was roughly a two year process. In all implementations, a clear end of year cutoff (timeline) and training definitely added to our successful implementations.
11 months agoThank you for sharing your experience, Martina 👌
11 months agoWe are nearing the end of a year long implementation. I joined the team for the final 6-months what a road this has been! Thanks for this helpful list, I will refer to it for the next implementation 😊
10 months agoAmazing! Thanks, Caitlin 😁
10 months agogreat ideas, would love to try it
10 months agoYay 😃
10 months ago