03 Sep 2024 Streamline Your Year-End Payroll Process: Start Now and Save Time Later
Authored by RSM US LLP, September 03, 2024
As 2024 draws to a close, organizations face the crucial task of completing year-end payroll processes. Especially if various changes and challenges have occurred over the year—such as a merger, changes in third-party vendors, a switch to a new human capital management system or an increase in remote-work employees—starting early on year-end tasks can save your organization significant time and stress. With these tips from RSM’s payroll advisors, you can streamline your year-end checklist and avoid common pitfalls.
Why early preparation for year-end payroll is crucial
Beginning your year-end payroll tasks early allows you to identify and correct potential issues before they become major problems. Common issues, such as incorrectly calculated taxable benefits, can lead to wage and tax adjustments. Addressing these issues early can prevent the need to issue corrected W-2s, T4s, or RL-1s and amended returns. This proactive approach ensures that your employees’ tax forms are accurate and delivered on time.
Moreover, a well-managed year-end process demonstrates your organization’s commitment to your employees’ financial wellbeing. Accurate and timely pay and benefits not only boost employee morale but also safeguard your company’s reputation as an employer of choice.
Understanding the impact of organizational changes on year-end payroll
If your organization has experienced significant changes—such as an acquisition, merger, new remote work policies or a switch to a new HCM system—understanding how they may influence your year-end payroll process is crucial. These changes can affect data consolidation, tax compliance and payroll processing if not handled correctly. Early preparation helps maintain compliance, particularly with new payroll-related regulations.
By engaging with payroll advisors early, you can minimize errors and maintain compliance throughout the year-end process. This proactive approach ensures that all necessary adjustments are made well before the deadline, allowing for a smoother and more efficient year-end closing.
Ensuring data accuracy and compliance for year-end payroll
Accurate employee data is essential for compliant year-end payroll processing. Ensure that the first three quarters are reconciled and tax-balanced before tackling the fourth quarter. Encourage employees to review their pay stubs for accuracy. Double-check all employee information, including address changes and remote work locations, to prevent tax implications and ensure data accuracy.
Planning for the new year: Using year-end insights for future success
Year-end payroll processing is about not only closing out the current year but also setting the stage for the coming year. By starting early, you gain valuable insights into your organization’s financial performance, which can inform data-driven decisions and help set realistic goals for the future.
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Source: RSM US LLP.
Reprinted with permission from RSM US LLP.
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