Year-end payroll simplified: Strategies for a smooth transition into the new year
As year-end approaches, payroll tasks can quickly add up. But with a smart plan, you can streamline the process and start the new year smoothly. Cathy Kruse, Furey Payroll manager, shares these top tips:
1. Start early
Get a head start well before December to avoid last-minute stress. Make sure all taxable earnings and wages are recorded by December 31 and entered into your system by the last workday. If your office will be closed or team members are taking holiday leave, adjust your timeline accordingly.
2. Set internal deadlines ahead of payroll cutoffs
Key data like holiday bonuses, commissions, and owner’s draws often require input from different teams with competing priorities. To prevent delays, set internal deadlines a few days before provider submission dates.
Example 1: Holiday bonuses
If a holiday bonus is due on December 23 and your provider requires two days to process, set a submission deadline of December 19 and an internal deadline of December 15. This gives you a three business day window to follow up with anyone who hasn't submitted information.
We can look at the same scenario but with a four day processing window. In this case, the pay file needs to be submitted by December 17. Set an internal deadline of December 12 to receive all bonus data. Again, give yourself that three business day window as a buffer.
Example 2: Timesheets
Holiday schedules can disrupt payroll timelines, so plan ahead. Have employees submit timesheets early and allow time for approvals.
Example 3: W-2 Reviews
Begin gathering information well in advance. If your draft W-2 deadline is December 20, give employees at least a week to review and update their personal details, such as names and social security numbers.
Now’s also the time to confirm off-cycle payments are accurately recorded, as draft W-2s capture only processed payroll activity. Final W-2s are typically wrapped up in the first week of January, so staying proactive ensures a smooth process.
3. Monitor provider updates
Keep an eye on your payroll provider’s year-end notices, which often include details like S-Corp shareholder benefits or stock option reporting. Use these as a guide but focus only on what applies to your business.
4. Create a checklist with due dates
Simplify the process by creating a clear checklist of essential tasks and deadlines. Align it with your service provider’s timeline to keep your team organized and on track.
5. Keep everyone informed
Set clear roles and expectations early on. Share an initial overview of responsibilities and send automated reminders for key dates. Calendar reminders can also help everyone stay focused on priority tasks during the holiday rush. Over-communicating is better than missing a deadline!
How Furey can help
Managing year-end payroll doesn’t have to be overwhelming. From handling bonuses to ensuring accurate W-2s, Furey’s Payroll team is here to support you. Learn more about how we can streamline your year-end process.
