Year-end can be stressful for businesses big and small. A lot of time and preparation goes into the year-end process; if you work in payroll you know exactly what I mean. Keeping up with IRS regulations and ensuring you are recording accurate wage information can be daunting. Did you know you can get a head start on year-end and avoid costly errors?
How to properly prepare for year-end
Organizing your processes into a timeline is the best way to get a handle on what needs to be taken care of and at what time it should be done. We suggest scheduling out tasks on a quarter-by-quarter basis so it is digestible and easier to blend into an already busy schedule. Make sure to include all departments that help out in the year-end process. This communication can be recorded on a spreadsheet so there is transparency as to who is handling what.
Make adjustments as you go
Before running the last payroll of the quarter, enter adjustments into payroll for wages that were corrected outside of payroll. These adjustments can include voided checks, 3rd party sick pay, fringe benefits, and so on. This ensures your information stays accurate as you go through the year and it helps alleviate some of the last minute tasks at year-end.
Plan audits throughout the year
Scheduling audits keeps your information accurate which will make for a smoother, less stressful year-end. We recommend running three types of audits in order to stay ahead:
• compare quarterly 941 report to payroll reports (quarterly)
• add all 941s for the year and compare totals to w2s (annually)
• verify accuracy of employee names, social security numbers, and addresses prior to the last payroll of the year
Wrapping up your year-end
Before you process that first payroll of the new year, reach out to your payroll provider with your new state unemployment tax rate along with any other tax notices you may have. Also, it is smart to make sure they have their tax tables updated according to any IRS changes, as well as limit changes for retirement plans.
For more tips on how you can streamline your year-end processes please download our year-end checklist.