Have you made your year-end list? Have you checked it twice?
For many in the US, Labor Day marks the beginning of the countdown for annual tax processing. Many payroll departments initiate their plans of gathering data, sending out notices to the employees reminding them to get their addresses correct, any annual tax form changes will be required and in some cases alerting employees of the new tax base and rate structures. For others, the process begins with the first payroll run of the year.
156 Million Hard Working Americans
Being able to balance the tax data and pertinent earnings and deductions and their relationship to taxes is an on-going payroll cycle event. Whether you begin to execute your plan in January or September the end result is a deadline all payroll professionals meet annually.
According to The American Payroll Association, there are 156 million hard working Americans who contribute, through the payroll withholding system, $1.7 trillion USD or 71.9% of the annual revenue of the U.S. Treasury. To achieve this, payroll professionals work all year calculating, processing, collecting, depositing, reporting, balancing, projecting, analyzing, and reviewing to get it right.
Are Spreadsheets Really Still in Use?
Tools have become more readily available so that payroll people can reconcile for their year-end tax processing all year long. Many reconcile every month, and more often it’s done every quarter. Payroll applications over time have made it possible for the payroll professional to extract the data at will without having IT help along the year. This puts the payroll professional in control of their own destiny.
Many savvy folks use the cycle payroll registers and compile a huge spreadsheet with entries after each payroll process; others build reports within their systems to gather the data based on certain specific parameters; with increasing number of tools available, these daunting tasks or reconciling are becoming more manageable. Still for the large employers, there are probably many different ways to view this data; there are plenty of manual tasks in gathering all the information necessary to ensure a smooth year-end process.
The Old String Tied Around Your Finger
Checklists – yes it’s sort of like tying a string around your finger but these days it can be extremely efficient and in some software applications configurable to accommodate all the details of year-end. In the past while managing payroll, I had a list that looked something like this….
- Check on Tax updates
- W-2 stock – whether with outsourcer or in house
- Test files – functionally and with IT resources
- Notification to employees regarding end of tax year and beginning of tax year requirements (i.e. address changes, when to expect year end forms, do they need to change their exemption status, consent for electronic W-2, etc)
- Postage and supplies for any mailings
- Re-establish year-end phone hotline, office hours and email account
- Contact any department or vendor who supplies information pertinent to year-end forms (i.e. Relocation Service, Accounts Payable for employee expenses, Benefit providers, etc.)
- Balancing tools
- Staff meetings (payroll, IT, mailroom, printing services, and external vendors) to determine responsibilities to year-end success and fulfilling the day-to-day operations etc.)
- Poll team for any holiday time off or scheduled downtime to ensure smooth coverage
- Review after action reports from previous year to avoid mistakes of the past
- Review service level agreements with vendors
How Can Organizations Manage the Year End Process More Efficiently?
Today with a fully integrated and efficient business application such as Oracle Fusion Payroll, you would have all these items entered in the payroll application, even the manual tasks, and can string them together in a payroll flow and utilize a systematic approach to managing the tasks. This is just one the ways Oracle Fusion Global Payroll can help manage the year-end process more efficiently.
There are many websites to get information on year-end processing in the United States. Here are a few and of course, you can always contact your vendors for specific application information.
For more information on Fusion Payroll, you can visit our website at www.oracle.com/hcm