When is the best time to change payroll systems?

When is the best time to change payroll systems?
When is the best time to change payroll systems?When is the best time to change payroll systems?

Paying staff correctly and on-time is a business-critical function. A good payroll solution is something that should improve the function for the business as well as improve the overall employee experience. With the current cost of living crisis, it’s more essential than ever that staff aren’t negatively affected by errors in their payroll.

Payroll Software not only pays your employees but should help the business automate tasks, keep up to date with changes to employee data, ensure compliance with HMRC, provide detailed reporting for better business insight and simplify the process of filing tax for the business.

So, when is the best time to change systems? Most payroll providers can onboard new customers throughout the financial year. But in the run up to the new tax year on 6th April 2023, we thought we’d give you our take on why changing payroll at the start of the new tax year could be the best time for your business.


Why is the start of a tax year a good time to change payroll systems?

There are several benefits for changing over payroll solutions at the start of the tax year. These include:

- Reduced stress as you’re starting with a clean slate… the start of the tax year is when the government makes changes to both tax thresholds and personal tax codes. If you change over payroll solutions at the start of the tax year, these changes can be implemented quickly and efficiently

- Saving time and money as there’s no historical data to be carried over. The previous year’s payroll can be completed and all information submitted to HMRC and provided to staff using the old system, then it can all be closed off

- Better quality data – there’s always a chance of human error when transitioning systems mid-year. Changing payroll solutions at the start of the tax year eliminates the chance of human error through double entry in two systems


When should I start my search?

For SMEs, a good time to start assessing payroll solutions is 5-6 months before you want to make the change. For larger businesses, the process may take longer, so it might be worth starting a little earlier.

The time it takes to select a new payroll solution is dependent on the size of your organisation, the complexity of the selection process and how many people are involved in the decision-making. For larger businesses, there may be a formal tendering process that needs to happen, so potential suppliers need time to respond to an invitation to tender. Time for assessing responses also needs to be factored in to the process.


What do I need to think about?

You might be considering a change of payroll providers because your business has outgrown your existing solution or it doesn’t afford enough business or employee benefits. If this is the case, it’s worth documenting the pros and cons of your existing system. This should help you work out what’s missing from your current system and what you’d like to have in your new payroll solution. Here are some things for consideration:

- What problems do you experience with your existing payroll solution? By compiling a list of the problems from your current solution, this helps create a wish list for your new system. It also helps you identify the business-critical functionality that should be investigated more deeply to see that the new system will completely fit the bill.


- What are your ‘must haves?’ Think about what you want to get out of your new system. What are you trying to achieve?

Yes, you need accurate submissions to HMRC, the solution needs to be compliant, it needs to be easy to use – but think about deeper benefits. Do you want to improve your employee’s financial well-being? Do you want a payroll provider that’s innovative and future-proofing their solution? Do you want a partner or a service provider? Do you want to integrate your payroll with other solutions to save time and effort? All these things should be documented and you can compare and contrast service providers based on your wish list.


- How easy is it to transition to a new system and what support will you get? Will your business just be a faceless entity to the service provider or will they get to know you, your business and your team? How do they support you during the transition process?


- What do existing customers say about the service provider and their payroll solution? Ask prospective suppliers for some references and have a chat with those businesses to learn about their experiences, ease of transition and the support they received.


- What’s the culture in the service provider’s business? Does it align with yours?


- Is the service provider registered with the Financial Conduct Authority and an HMRC partner organisation? How do they protect data? Have they got the highest levels of security to protect you, your business and your employees’ data?


- Analyse the costs – are there any hidden fees? Get examples of costs from different payroll providers based on specific numbers of employees so you can compare annual costs.


- What’s the support structure if you – or your employees – have problems or questions they need answering? Will you just be transferred to a call centre where the operator doesn’t know you or your team? Or will you be speaking to a team member who’s involved on a day-to-day basis with your payroll and your business?


- What’s the onboarding process? How long does it take? How much help will the potential service provider give you?

 - Is the supplier recognised by professional bodies within the payroll industry?

Payroll is such a business-critical function that the selection process involves extensive research into different suppliers. Find one that fits with your solution requirements and offers efficiencies to reduce time and labour cost. Not only that, but it’s important to find a like-minded ‘partner’ that offers great service and will support you - plus one that will listen, act and be accessible when you need them.


How does PayCaptain help?

PayCaptain is a multi-award-winning cloud-based payroll provider. Awarded the Chartered Institute of Payroll Professionals (‘CIPP’) Software Product of the Year in September 2022, PayCaptain is also the world’s first payroll company to be B-Corporation certified. PayCaptain is ISO27001 and Cyber Essentials certified, which means we have the most robust security in place to protect a businesses and employees’ data.

A close-knit team of payroll professionals, we have over 175 years of payroll experience within the business and we’re dedicated to improving the payroll experience for all.

A forward-thinking and innovative company, the PayCaptain solution was developed and launched with the aim of making payroll a breeze for employers, whilst improving the financial well-being of employees. The solution includes a host of innovative functionality that helps employees manage their money better and increase their financial resilience for the future.

PayCaptain partners with other industry innovators to offer integration for other business-critical software, saving businesses time and money, streamlining internal processes, improving communication and offering employees more benefits.

PayCaptain has a dedicated team to onboard new customers. We only take on a handful of new clients every other month so we can make sure that they get all the support they need and the process is easy and stress-free.

Initially, businesses work with Mike, who’s on hand to answer any questions, demonstrate the PayCaptain functionality and introduce the customer to the PayCaptain team. Mike delivers support through the business-change process as customers implement PayCaptain across their organisation.

Once customers decide to implement PayCaptain, they’re introduced to Sarah, our Head of Operations, and Stacey, our Head of Payroll, or one of our Payroll Managers  – though Mike always remains on hand to offer help, advice and support too!

Sarah and the new business team support clients through the whole onboarding process – customising the solution to perfectly fit their business’s needs. Their roles are to make the process of onboarding as easy as possible, taking a lot of the administrative burden away from customers.  

Sarah and the dedicated Payroll Manager help with communications to employees and they have regular project meetings and reviews. PayCaptain customers are onboarded with a huge amount of attention, to make the process as easy and effective as possible.


We implemented the solution quickly and easily and the PayCaptain Team made the process very easy.” Amy Aylwin-Fergus, Rotary

For employees, payroll information is delivered through the PayCaptain mobile app, which has a 97% usage rate. The PayCaptain app provides clear information to employees through graphical payslips which have adopted the Plain Numbers approach. This enables companies to support employees who struggle with numbers by improving the way they communicate, increasing comprehension. With increased understanding, employees can make more informed choices about their money and improve their financial well-being.

Support for employees is available through the app with helpful icons and explanations as to how tax and National Insurance is calculated. Support is also available for those who may be struggling with debt or controlling their money, with direct links from the app to confidential financial advice from MoneyHelper. If employees can’t access the support they need through the app, they can contact the PayCaptain team to have their questions answered. When an employee calls, their last payslip is automatically loaded onto the screen of the PayCaptain advisor who's dealing with the call – so they have the most up to date information in front of them.

PayCaptain is a payroll solution with an exciting roadmap for development. The team is dedicated to developing new and ever-more helpful functionality to improve the payroll process for both employees and employers. This gives employers confidence that their payroll solution is future-proofed and will continue to offer the latest and greatest technology, while scaling with their business.

In summary, switching payroll providers at the beginning of the tax year is cleaner and easier for businesses because there’s no historical data to transfer across to the new payroll solution.

If a change at the start of the tax year is not possible, a change at the beginning of the tax quarter is the next best step. Changing at any time of the year is not a problem for PayCaptain though, as we can offer companies a clean start at any time of the year!