We get it.
Change can be stressful, especially for clinic owners. You’re already managing so much, and when it feels like you are constantly short on time, any kind of change can feel overwhelming.
Switching payroll providers is no exception.
It’s essential to get it right. Otherwise, you will have to deal with an inevitable administrative nightmare or worse - financial audits and more headaches.
That’s why we’re here to make it simple for you. We serve over 80 clinics across Canada and have worked with each to make their transition over to us as smooth as possible.
The below is a 5-step comprehensive list that will guide you through a smooth transition for when that time comes!
1. Notify Your Current Provider Give adequate notice. Most companies require a 30-day notice to read through the terms and conditions you agreed upon from the beginning of your engagement.
Note: If you are using a SaaS solution (cloud-based or online), you might be able to cancel your subscription right away.
2: ROEs for a Change in Provider There are several different reasons for requiring an employer to issue a Record of Employment (ROE) to an employee.
The most common one is usually an employee termination.
However, a scenario that is perhaps less known is when an employer switches payroll providers. Although the ROE won’t be issued out to employees, it will be handed over to the new provider for three key reasons.
If your current provider doesn't issue the ROE for each employee, your new provider won’t have the detailed per pay period breakdown of insurable earnings to prepare ROEs on your behalf. It is critical that you ensure that your current provider issues and submits ROEs to Service Canada after you process your last payroll with them.
If you have already signed an ROE Web Authorization with your existing provider, you’ll need to notify your new provider so that they can register as the new Primary Officer (PO) and electronically submit ROEs to Service Canada on your behalf going forward.
3. Require Copies of All Payroll Register Reports Up Until Your Last Payroll A payroll register report provides a comprehensive recap of each payroll, including a detailed breakdown of net wages, payroll taxes and more per employee, whether active or terminated.
Should you be switching providers mid-year, you’ll need this information from these payroll register reports to set up your active and/or terminated employees with your new provider. The key component is capturing the year-end data correctly.
Without accurate year-end data, your new provider will not be able to issue T4s/T4As for your employees (especially the ones that may have been terminated throughout the year.
As an employer, you are required to keep payroll records for six years from the end of the last tax year. Therefore, you will need to get access to all the payroll records before your relationship is terminated with your provider before transitioning over to the new one.
4. Pay stubs records: Including current staff, terminated employees and contractors With your new provider being brought onboard, they won’t have access to past pay stubs. You will need to coordinate with your current provider to give you electronic copies of all past pay stubs, for active and terminated staff.
This step is crucial, especially if your current staff will require access to previous pay stubs from the past for any reason after transitioning to a new payroll provider (you are legally obligated to do so!)
5. Ensure that your current provider is not filing Year-End Reports on your behalf Here’s the thing, payroll providers usually understand that the employer/new payroll company will be responsible for filing year-end reports once a switch-over is complete.
However, even though it may seem obvious, always ensure this is put in writing to avoid having the Canada Revenue Agency (CRA) receive two sets of year-end reports from two separate providers, which in turn may trigger an audit, Pensionable and Insurable Earnings Review (PIER) and, create a headache for overall business and staff.
Bonus You have the opportunity to start a brand new relationship with a clean state with your new provider.
Shift Accounting works with over 80 successful clinics across Canada. We go beyond basic book-keeping, providing a range of financial and administrative services, as well as consulting and CFO contracting. We are invested in your success. Contact us today for more information on how you can take the next step to grow your practice and build a more profitable business.