Using the Summer Lull to Ensure a Smooth Year-End

July 10, 2024
Jim Kohl

Head of Payroll Operations

Jim Kohl

With longer days and brighter sun, it might seem like the perfect time for businesses to switch to autopilot. Everyone's on vacation, right? As a payroll professional, however, I suggest using this quiet period to ensure a seamless year-end. When things are calm, it’s the ideal moment to get ahead of the year-end frenzy and address potential issues that could cause problems later.

We’re currently in the middle of the tax year: W-2s have been filed, Q2 is transitioning into Q3, and the end of the year feels distant. However, summer offers the perfect opportunity to take proactive steps for a smoother year-end process in payroll. Here are some practical tips to help you avoid future headaches:

Review Last Year’s Challenges

Thinking back on the year-end rush might be the last thing you want to do, but now is the perfect time. Reflect on the difficulties you faced during the last year-end. How did you distribute W-2s? Were disability notices confusing? Were there missing contractors or incomplete employee information? Start by identifying and documenting the issues that caused the most trouble last year. Use these insights to begin making improvements now.

Consider holding a meeting with your team to discuss these challenges in detail. Encourage open communication to ensure that all perspectives are considered. This collaborative approach can reveal hidden issues that you might not have noticed on your own. Create a list of actionable items based on this discussion and set deadlines to address each one before the year-end rush begins.

Track Non-Payroll Payments

Monitor payments made outside of regular payroll, such as stock payments, moving expenses, contractor payments, and other imputed income. These payments need to be recorded to prevent inaccurate returns. A mid-year review can help confirm that all records are up-to-date.

Implement a system for logging these payments as they occur. This might involve creating a dedicated spreadsheet or utilizing features within your payroll software. Regularly updating this log will ensure that all payments are captured and correctly reported. Additionally, review past payments to ensure nothing has been overlooked and address any discrepancies immediately.

Verify Employee Information

Avoid the hassle of filing W-2Cs (corrected W-2s) by verifying employee information now. Send a memo asking your team to review their names, addresses, and social security numbers in your HRIS or payroll system. This may include removing terminated employees. Accurate records are essential for many reasons, including employees' unemployment claims, and impact quarterly unemployment and disability filings.

Remind employees of the importance of accurate data and how it affects their tax filings. Regularly auditing this information will prevent issues from snowballing and ensure that your records are always current and correct. No one wants to see the wrong information on their W-2, so reviewing key information now can prevent future tears. 

Review Workplace Tax Setups

Examine your workplace tax setups. Identify active and inactive locations. Check if any employees have relocated during the year. Encourage employees to review their tax withholdings to correct any discrepancies now. Addressing these issues early ensures a clean quarter and year-end, preventing costly amendments later.

Create a checklist of all your work locations and verify their status. Contact employees who have recently moved or changed their work locations to confirm their tax withholdings are accurate. This proactive approach will help you catch errors early and make necessary adjustments before they become bigger problems.

Leverage Payroll Features

Maximize the use of your payroll software’s features to streamline processes and reduce errors. Many payroll systems offer automated reminders, customizable reports, effective dating and integration capabilities that can simplify your workflow. Take advantage of these tools to stay organized and efficient.

Utilize reporting features to monitor key metrics and identify any discrepancies early. By leveraging these tools, you can ensure a smoother and more efficient year-end process.

Before you sit back and relax on a white sand beach, take a moment to review your payroll processes. By addressing these key areas now, you can enjoy your break with peace of mind, knowing that you've set the stage for a stress-free year-end. Proactive planning during the summer lull will ensure a smoother, more efficient close to the year, allowing you to truly relax and enjoy the fruits of your labor.

Check empowers all of our partners to offer timely and accurate payroll during the summer lull and the busyness of Year End. Get in touch now to add payroll to your platform. 

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