Here’s part 2 of my 3-part series on the top 3 Calendar Year-End Financial Processes. [See Part 1 here]

Let’s dive right on in and take a look about a very important Year-End Process – PAYROLL

The goal is to make sure the Payroll System is accurate and complete with ALL compensation and withholding’s to produce accurate and timely w-2’s and filings to Federal and State Governments.

 

PAYROLL

 

Correcting mistakes after W-2’s and filings have been done is a huge headache, so it pays to get it right the first time. So, regardless if you do your own payroll or outsource it, perform the following :

Update the system for any Compensation Gross-ups:

Love Offerings to an Employee
Benevolence given to Paid Staff Members
Trips given to paid staff
Moving Reimbursements for non-qualified expenses
Bonuses
Gifts in the form of gift cards or cash

This is not an all inclusive list – just some of the more common ones.

Update the system for taxable portion of Life Insurance (for the amount over $50,000 face value)

Review Housing Designations and Retirement Contributions – update if needed

Make sure these items were coded/handled correctly:

STD payments or Sick Pay from 3rd Parties
Employee business reimbursements via payroll

Finally, reconcile your general ledger payroll accounts to the Form 941’s. Reconcile the 941’s to the w-2’s.

 

That’s it.

After the above have been worked thru, the w-2’s can be printed and distributed. Don’t forget the filings required with the SSA, the IRS and your State.

For the New Year

Obtain updated housing allowance forms and W-4’s as needed and update the new year accordingly.

Use what you learn during this year’s close process to improve your payroll systems and procedures.

Consider outsourcing the payroll.