January is almost here, which means it is time to focus on your business’s year-end payroll processing. Processing payroll is complex and detail-oriented. It requires tax calculations and compensation totals for each one of your employees.
This can be a dreadful time for many business owners, so we are sharing some of our expert tips to make year-end payroll processing run smoothly for you.
Update Employee Information
The IRS may penalize you for missing or incorrect employee information on their W2 forms. To avoid these penalties, audit employee information like social security numbers, addresses, and names. If you outsource your payroll or use a payroll service that employees can view online, encourage them to review and edit their information throughout the year.
Verify Employee Wages, Benefits, and Deductions
Double-check that each employee has the correct pay-rate on file. Review their benefits and deductions to make sure that everything is listed correctly. Many businesses give bonuses at the end of the year. If these bonuses withhold retirement deductions, do not exceed the annual limit.
Process All Checks
Sometimes you make payments outside of your regular payroll processing system. Be sure to keep track of those checks. Pay the tax liabilities for these checks on time. Report all voided checks as well.
Do not mark uncashed checks as voided checks. Report those checks to the unclaimed property office in your state. For Maryland, you can visit their unclaimed property website for more information.
Payroll Processing Software
A streamlined payroll process sets a good foundation for your business. Payroll software organizes all important documents and manages employee pay periods. Select which program best suits your business model by weighing out the pros and cons. This is one of the most important payroll management decisions that you will make.
The software will help you out immensely at the end of the year because of its structure and paperless system. If you don’t already use this software, consider acquiring it next year for a trouble-free process.
Even though you may have done your business’s year-end payroll last year, rules and regulations always change. Stay up-to-date with how your payroll system works. Continue learning about payroll best-practices and make note of important deadlines that you must meet.
Payroll Processing Help
If your business is growing and you find it hard to keep up with payroll processing on your own, consider sending it to an outside contractor. This gives you time to focus on what is more important in your business.
PL Consulting is here as your business’s go-to resource for bookkeeping and payroll processing. We focus on small and mid-size companies who desire substantial growth. Our payroll services include:
- Payment of State and Federal taxes
- Track vacation, leave, and sick time
- Issue paychecks on paper or via direct deposit
- The ability for employees to view up-to-date pay info online
- Generate W-2, W-3, 1099 & 1096 forms