How to Switch Payroll Software - and when

9 min read
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Paying your employees the right amount shouldn’t take all your time. If it is, you may want to think about switching payroll providers. The right payroll software can simplify the process and make tax compliance smooth every year. 

Read our guide on how to switch payroll companies - you can skip to the checklist, or find out information on the best time to switch providers, the process and what you need to bear in mind.

Table of contents:

The best time to switch payroll providers

The new tax year kicks off on 6 April each year, and runs until 5 April of the following year. Switching to a new payroll software around this time is a great idea.

1. You’ll have a few weeks between the end of the tax year and April’s month-end payroll to switch payroll providers. This should be enough time to let everyone know about the move, and to train the relevant members of your team about how the new software works.

2. You won’t have to carry over any historical data from the previous tax year into the next one. The business gets a clean break, and you don’t have to worry about compatibility issues (or human error) from information swapping between non-compatible platforms

3. It’s simple to incorporate changes to tax thresholds. Each year, the UK government announces a number of changes to tax thresholds, rates and codes. By swapping payroll companies at the start of the new tax year, you can easily incorporate any changes.

You might find our payroll year end checklist helpful if you’re looking at swapping your payroll company for the new tax year.

The start of the tax year is the most efficient time to change payroll providers.

Changing payroll providers mid-year

Changing payroll providers mid-year might not be as easy, but that doesn’t mean it should be daunting! Talk to your new payroll provider for support in the process, but there are a few things to look out for:

The first thing you’d need to check is whether there is cross-compatibility between the two providers, so you can import any historical data from the current tax year automatically. The last thing you want is to be entering all values manually. Even if you have a relatively small workforce, this increases the risk of errors with any data you input.

You will also want to carefully manage your timelines. Crossover between the two payroll companies could cost you extra as you’ll be paying for access to two sets of software at the same time. Managing the timeline well will also help prevent the production of duplicate filings.

Make sure that there is nothing in the small print that might incur additional costs to your bottom line (like a 30-day notice period from your old provider), or something that might disrupt the upcoming payment run in any way.

Luckily, most payroll companies do what they can to make switching mid-year as easy as possible, so chat with your new provider about what support they offer.

Switching payroll companies: checklist

If you’re planning on switching payroll companies at the start of the upcoming tax year, use this checklist to make the process as simple as possible:

1. Audit your current payroll software. 

This will help you understand what isn’t currently working, what you want to change and, therefore, what you want to see from your new payroll provider.

For example, you might want software that integrates fully with the rest of your accounting software.

2. Check the terms and conditions of your current software.

Check for information about cancellation terms so you understand any costs involved. Some software providers might be very flexible, while others might come with a fee for cancelling early that will impact when you want to make the switch. It can be simpler to switch at the end of a tax year, although it’s possible to switch providers mid year.

3. Research and find a new payroll software provider.

Look for a new payroll software that meets your current and potential future needs. It’s important to consider the functionality itself, the overall cost of the system, as well as the benefits you’ll receive.

Want to know more? Try our article on the benefits of a payroll system.

4. Test the new payroll software. 

This will help you to establish which system is most user-friendly and suits your business best. It also allows you to compare customer service. 

If you have a lot of employees or complexity in your payroll (like multiple statutory payments or court orders), it’s useful to run both systems side-by-side. That way, the testing will pick up any distinct differences in outcomes.

Talk to the members of the team who will be using the software the most before you make a final decision.

5. Ideally, close off the current tax year before switching.

If you can, do so right after payroll has been processed, so you will have plenty of time to finalise the move before the next payment cycle.

This process should include:

Send your final report of the year.

It’s generally best practice to do so on or before your employees’ last payday of the tax year. You will already have been making your full payment submissions (FPS) each pay run throughout the year, and this report should just be verifying the numbers. In some cases, you’ll need to send an employer payment summary (EPS) instead. In either case, your end-of-year submissions will need to be sent to HMRC before 20 April.

Read our payroll end of year checklist for more help.

Provide employees with their end-of-year forms

Through our advanced payroll software, you can provide employees with their P60. Employees’ P60 forms summarise their total pay and deductions for the year, and have to be provided by 31 May. You also need to report on any benefits in kind - such as private healthcare, company cars or interest-free loans - through a P11d, which needs to be submitted by 6 July each year.

6. Set up your new payroll software

You may have already taken a few of the steps to set up the new payroll software during the trial period. Wrap up the process by adding in any additional information, so you can start the new tax year off on the right foot.

Follow the instructions provided by your new payroll company. They will likely need:

  • Business information such as your employer PAYE reference number and number of employees

  • Employees’ details including their national insurance numbers, tax codes, start dates, student loan information and other details

  • Payroll records such as all salary and wages payments, staff leave and absences, copies of all PAYE coding notices (P9T) which have been received, BiK information, employee contributions etc.

7. Make the switch

When the agreed date comes, migrate all your data across. Utilise support available from your new provider to make the process as smooth as possible.

8. Notify your employees

While anyone involved directly with payroll will already know, it’s a good idea to send out a company-wide email or notice so the whole business is aware of the change.

It will help to prevent any confusion, such as payslips looking different, and ensure you’re being as transparent as possible with your team.

Switching to QuickBooks Payroll Software

If you’re on the lookout for a new payroll provider who can help you speed through every pay run, consider the QuickBooks Online Core Payroll system.

It offers a quick and painless setup process thanks to the FPS importer, which can automatically import all the important information about your business, including:

  • Company and employer details This includes your company name, address, employer PAYE reference number, pension information and other employer data. Try to make sure you have your pension reference information, all details of the employee and employer contributions, the taxation method used and whether you have used qualified earnings thresholds for the calculation of contributions on hand.

Employee details QuickBooks’ FPS importer tool will import the details of your employees automatically, including name, address, date of birth, national insurance number, tax code pay day and the payment method.

Pro tip: Check out a handy feature called pensionsync, which was designed to automatically pull updated pension information from supported providers back and forth between the systems.

  • Information related to changes in the new tax year With QuickBooks Online Core Payroll, the majority of the changes made by HMRC are automatically integrated into the software. These can range from changes to tax codes, student loans and statutory payment rates.

  • Final review of employee payroll records Once everything has been added to the system, a final review helps to double check everything before the first payment run of the new tax year.

How to switch to QuickBooks Payroll Software

We’ve made switching to QuickBooks as easy as possible. As well as interactive ‘get started’ guides, we also have support available. You can switch from any Payroll company to QuickBooks including Sage, Xero, BrightPay, KashFlow and HMRC Basic Tools.

1. Log in to QuickBooks Online

2. On the ‘Employees’ page, select ‘Let's go

3. When prompted, select ‘Yes, import my data

4. On the next page, select your previous payroll software and select ‘Next

5. Click on ‘Upload file’ on the next page and select your exported XML file

6. On the last page, select ‘Next’ to start the import and that's it

Now that you’re equipped with everything you need to make the switch, it’s time to choose your payroll software before the current tax year ends. Your business will be running more efficiently before you can say “Happy Bank Holiday” to your colleagues and clients at the start of May.

Feel you’re better informed about switching payroll software? The QuickBooks blog covers a wide range of business-related topics – it’s all part of our mission to help small businesses grow.

Payroll made easy Feel you’re better informed about switching payroll software? The QuickBooks blog covers a wide range of business-related topics – it’s all part of our mission to help small businesses grow.


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