Tips to Prepare for Year-End 2017

Year-end is here, and for the most part, it is the most wonderful time of the year. Holiday sales are up, employees are being festive and morale is high, holiday parties are happening left and right, and then there’s those of us who work in payroll. Year-end is one of the most stressful times of the year for those who do payroll for a business. There are 3 main areas that are involved in year-end:

  • Preparing wage and personnel information for W-2 reporting so W-2s are accurate.
  • Preparing for payroll in the new year, which takes into consideration any changes within your payroll that need to occur.
  • Releasing W-2s to employees.

Year-end is a flow of tasks occurring between October, November, and December of one year, and then through the end of January in the new year. However, the most efficient process will include some tasks you complete with each quarter of the year so your year-end is a bit less chaotic. This is why now it is the time to prepare for year-end.

Last week we hosted a workshop where our clients were able to come to our office and receive tips and tricks to help them prepare and deal with the stress of year-end. Year-end is no joke. Ensuring that you are staying compliant, that all your reports are accurate, that all your employees have their tax forms, audits, adjustments, and so on, are all things that fall into the hands of those in charge of payroll. If you were here for our Annual Year-End Workshop, then you already have a good idea of how to prepare for year-end, and that’s awesome! If you did not get the chance to attend, no need to stress about it (there’s always next year!). The following are a few tips on how you can reduce stress and prepare for year-end.


During this time, it is easy to become overwhelmed and stressed. Not only do you have the stress of buying Christmas gifts for your entire family, but now you have the stress of getting everything set and ready for year-end for an entire business. The best way to make sure that your ducks are in a row is to relax, organize, and plan. Grab a pen and pencil if you are a visual person, or type up a list, whatever works best for you. In this list, you need to include everything you have to get done before the end of the year. This doesn’t have to be in any specific order (not yet at least). This will just help you “vent”, or get everything out. Once you have written down everything you have to do, take a deep breath. It may look like the longest list ever, but don’t freak out. Take your time to organize that list and prioritize each item in a way that fits your schedule (and deadlines) best. I suggest scheduling out tasks on a quarter-by-quarter basis so that it is digestible and easier to blend into your busy schedule.

Enter Adjustments Quarterly

Like I mentioned before, the best way to schedule tasks is on a quarter-by-quarter basis. Take the time to enter adjustments into payroll prior to running the last payroll of the quarter.

  • Adjustments should include:
  • 3rd party sick pay
  • Fringe benefits
  • Void checks
  • Other adjustments

Part of entering adjustments means communicating with those key parties involved in year-end processes to make sure you have all the information you need. Once you complete your adjustments and run your last payroll of the quarter you can complete your audits and compare your quarterly 941 reports to payroll reports.

Communicate With Your Provider

Your payroll provider should be available at all times of the year, but especially during year-end. We know how stressful this time can be, so we are here to help you out as much as we can. Your provider should have plenty of resources for you to read through, and their customer service team should be able to answer all your questions quickly and efficiently.

The beginning of the 4th quarter is a great time to reach out to your payroll provider to get some clarification on what is expected of you for year-end. Some things to clarify are:

  • Do they offer a checklist for guidance?
  • Who is printing W-2s?
  • Can employees receive electronic W-2s?

Once you know what to expect from your payroll provider you can begin reviewing other things. For example, 4th quarter is a great time to review the paid time off policy and add in paid holidays for the new year. Other things that can be done include employee information audits and entering in adjustments to payroll.


Stay Updated With Changes

We all know that IRS deadlines are constantly changing. Before the New Year begins, make sure you check the IRS website to see if there are changes being implemented into payroll. Things such as tax tables and benefit limits should be checked to make sure you have accurate information. You will also want to provide your payroll provider with the new state unemployment tax rate. Once this is done it is time to audit those W-2s.

There are a few things you can do to make sure your numbers are matching up. First, compare the fourth quarter 941 report to payroll reports. Add all 941s for the year and compare that amount on your W-2s. If these check out you are free to send out the W-2s to your employees. Please keep in mind there are many things you can do throughout the calendar year to alleviate year-end stress. Planning quarterly audits, entering adjustments, and inputting paid holidays into your payroll software will greatly lessen your workload come December.

Wrap it Up

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.