If you’ve considered changing your payroll software or plan to in the future, you’ll need to plan the best time to switch to maximise productivity and minimise disruption. In this article, we discuss the advantages and disadvantages of migrating payroll solutions across different times of the year.
What options are available to me?
Put simply, there are two options to choose from when moving to a new provider: a new tax year migration or mid-year migration. Each one has distinct benefits and disadvantages, which we’ll cover below.
New tax year migration
When choosing to migrate to a new payroll provider, the simplest time to perform this is at the start of a new tax year (6th April). This method is as simple as it gets, as workers can be migrated over with zero balances and no year-to-date information that’s reliant on data from your previous system.
When considering the data export, a new tax year offers more flexibility around the data that has been exported and more time to import it into your new choice of software successfully.
While ideal, the option to migrate at the start of a tax year only gives you one opportunity each year to make the switch. This means the timing can be restrictive and perhaps not the most viable for your business, especially if you need to wait 6-12 months to change from software that’s causing a loss in productivity for your business.
It’s important to consider the opportunity cost of postponing your go-live for a simpler migration at the beginning of the new tax year, as opposed to the savings made that can be associated with migrating sooner.
Mid-year migration
As new tax year migrations are not viable for many businesses, a mid-year migration is the only or most convenient option for some to choose. Whether this is due to the constraints of a current system or its pricing model, or simply the need to improve processes, a successful mid-year migration is certainly achievable with a carefully planned implementation plan and a good line of communication between your previous and new software providers.
Further points to note when considering a mid-year migration:
- Do you have access to all the information from your previous payroll software such as RTI references, YTD figures, lower earnings limits (LELs), and upper earnings limits (UELs)?
- Have you given your new supplier enough time to handle your desired date? Have you asked them what their expected timescale for onboarding is so you can plan accordingly?
- Is your new provider ready to take over the actions of RTI, FPS, CIS returns from your previous system and has this action stopped in your previous system? It’s important to be aware that RTI submissions for workers cannot be conducted simultaneously as you will have duplicate postings to HMRC. This is important to consider, as other industry migrations may happen in tandem, whereas payroll software must be approached even more meticulously.
Other considerations when switching payroll software:
- How easy is it to get the information from current/previous system?
- Does your new provider offer a service to assist with data migration or is it your responsibility?
- Can you continue to run your pension scheme in the same way? Ask your new provider how this is conducted, e.g. whether it is an export process or if there is integration between their system and the pension provider.
- Have you allocated enough resource internally to liaise with your old and new providers in order to provide the information when it’s required and to ensure satisfaction with progress?
- Can you speak to existing clients or read case studies from your new provider to understand what has worked for other businesses and perhaps some factors which could help influence your decision?
For a more comprehensive guide to understanding the key parts of switching software, take a look at our eBook, A buyers guide to payroll software.
Summary
Considering the above, it’s clear to see that choosing the right time to switch solutions is crucial. The answer isn’t binary and there’s no simple one-size-fits-all answer. A trusted software partner will be able to help guide you through this process of deciding what’s best for your business.
We’re here to help businesses who are considering moving payroll software. Codapay’s commercial team are on hand to discuss the best way for your business to make the switch. For more information, get in touch and we’ll be happy to provide our industry knowledge and experience, without obligation.
