Migrating Payroll Data-An Employer’s Guide To Switching Providers

Step to Migrating Payroll Data

Have you decided to change your third-party payroll provider and switch over to another in quest of better accuracy, increased efficiency and cloud capabilities? But have you wondered what would happen to your payroll data when you switch providers? 

Well, this bothers most users as they will need access to both historical and current data, quarterly returns, employee information, annual reports (W-2s) and so on. If this thought is bothering you too, you are at the right place. In this article, we will discuss what details you need to provide during such a switch, how to migrate your payroll data and how to preserve your payroll data while switching providers. 

Let’s proceed then!

What information do I Need to Provide while Switching Payroll Providers?

In general, you need to provide certain basic information which may include:

  • Your company’s information, such as its legal name, state and federal identification numbers, address, and corporate structure
  • Past forms filed and tax returns submitted
  • Banking information for writing live checks or making direct deposits
  • personal information related to your employees, direct deposit information and  W-4 details

You can always get in touch with your new provider in case you have any queries or need any assistance while providing this information. Usually, such providers offer a template to make you familiar with the data they need and when they need it.

What is the Procedure to Migrate Payroll Data?

After you have provided the basic details and initiated the process of switching to the new provider, ensure they get access to your entire payroll history and all the changes you make during the process. Typically, the following information will be needed:

  • data of all the present and terminated employees (those who require a W-2 Form) during the year 
  • Payroll reports including ID numbers, tax totals, tax rates and so on
  • Pay history and related details such as total working hours, taxes by type, deductions by type (retirement, medical etc), earnings by type (overtime, bonus, salary etc), and employer-paid items, if any.

As most providers use cloud-based and plug and play systems these days that are devoid of manual entry, migrating your payroll data is no longer slow and error-prone. All you need to do is to provide your new provider with permission to access your payroll data. They will ask for these details in a format that is easier to upload in their software. However, you need to make sure that the data is transferred to the provider in a secure manner. Do not email or fax such critical payroll data. Many providers make suitable arrangements to ensure the safe transfer of payroll data through secure folders, secure emails and file drop boxes. 

After you have transitioned your payroll data, it’s time to locate import errors, if any. you should also keep track of any changes made to your existing employees between the transfer of data and the time you have been trained on the new system.  This is to ensure that both the old and the new platforms mirror each other before you actually start operating on the new platform.

How much Time Does it take to Transition the Historical Payroll Data?

As most providers use cloud-based technology these days, the time needed to migrate the payroll data is much less than ever before. However, this time may differ depending on the platform you are using. Please note that data is not the only thing that is transferred when you switch to a new provider. Therefore, you would do well to consult with the new provider beforehand, plan for the switch over and agree on sufficient lead time so that you can be on top of your desired switch date.

For smaller organizations, the implementation process may get over in just a few days. However, it may require weeks or months for larger businesses to set up the payroll. Usually, the best time to switch is at the end of the year or the quarter. this is because businesses need to file tax forms with different agencies annual and quarterly. Transitioning during such times will help eradicate confusion and likely issues with filing and paying taxes.

What Data should I Move to My New Provider?

While migrating your payroll data to the new provider, you can make your own choices as regards to the data you need to move.

  • In case you switch at the start of a year, moving the payroll data of the previous year is your choice. However, the employee data you entered into the new system should still match that of your previous system. You may contact your previous provider for access or whenever you need to migrate data to any cloud-based storage for future reference. Some companies may ask for additional implementation fees to load the previous year’s data.
  • In case you switch providers mid- year; you can move the entire payroll history for the present calendar year by employee. Based on your needs, the data will be loaded as per check date or quarterly. In both cases, the year-to-date (YTD) totals for the employee should remain consistent across systems.

As an employer, it is extremely important for you to maintain records used to calculate employee payroll. These may include total wages per pay period, hours worked, date of payment, additions to / deductions from wages, payment basis and so on. You must keep such records for at least 3 years, as mandated by the Fair Labor Standards Act. Moreover, the IRS mandates all businesses to maintain payroll records related to employment taxes for a minimum of 4 years. Some states in the U.S. have more stringent requirements as well

How To Ensure Protection of The Payroll Data While Switching Providers

You will definitely want to ensure a smooth and secure transfer of your payroll data while switching payroll providers. To avoid future issues, please have a prior discussion with the new provider as to what steps are undertaken by them to ensure a secure payroll data transfer.

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💠FAQs💠

What do I Need to consider before Migrating Data in Sage 50?

By keeping in mind the following points, you can avoid possible issues related to data migration in Sage 50-
🔹 Make sure your data is error-free 
🔹 You must run your file on Sage.STO.ServerMigrator.exe. Do not run it on Sage.STO.ServerDataMigrator.exe. 
🔹 Take proper backup of your data
🔹 This tool works with accounting updates 6.3 and higher. Therefore, you must upgrade the software at least to version 6.3 before initiating the migration 
🔹 Before starting the migration process on a new server, check the administrative rights for the server. Also, do not forget to minimize the read permission in the old server.

How can I Migrate my Data with the Sage Migration Tool?

With this migration tool, you can easily move data to a new server. Here are the steps to follow-
🔹 Log on to the new server as an admin 
🔹 Install the Sage Timberline Office Accounting. On the new server, it will grant  you access to the Sage Migration Tool 
🔹 Next, browse to C:\Program Files (x86)\Timberline Office\Shared)
🔹 Now start the Sage migration tool 
🔹 Run the Sage.STO.ServerMigrator.exe program 
🔹 Click on the Browse tab
🔹 Next, go to the old server and locate the 9.5 folder 
🔹 Click on the Validate button to validate the old server location, log file path and new server location
🔹 Press the Migrate button to start the migration 
🔹 Once complete, click the Close button
🔹 Review the Server Migration Log. It is usually located in the path- \\[servername]\Timberline Office\9.5\Accounting\Migration\. It will let you check if the material got migrated properly.

How to Fix the Data Migration Error in Sage 50?

When you receive an error message related to a failed migration process in Sage 50, invariably you will receive a prompt as well. In all such cases, you should select Yes. This will convert all the companies before working with the company codes and modules. 
Next, perform the below-mentioned steps 
🔹 Type in your Company Code in the text box provided
🔹 Press Enter 
🔹 Go to the upper right corner and click on Convert 
🔹 Open the module named Convert Module Information Files
🔹 Here, checkmark the box named “Convert information for All Companies”, if you want to convert all the companies in one go. 
🔹 Click Proceed to initiate the conversion. 
🔹 Once completed, you will get a prompt saying “Data conversion is complete.” 
🔹 Click OK to continue
🔹 Click on the Accept button. This will close down the Company Maintenance window

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