Payroll Data Services Blog

Preparing for Your Best Year-End Starts Now

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There’s a funny thing about year-end. It seems to never really end. Between the preparations leading up to it and the final to-dos after, there’s a lot to take care of in the days and months before and after closing out the fiscal year. 

So even now — when the sun is shining and summer is in full swing — you need to start thinking about what you can do to improve this year-end and all the year-ends that follow. 

This continual improvement happens in many ways. Whether you adopt new tools and technologies, bring on talent to alleviate workload, or roll out more streamlined processes, there are many effective “optimizations” to pursue. However, before you invest time or money on these fixes, you need to understand where and what you need to improve. And that process starts now.

Improving your year-end process starts with questions

Now, before the madness of Q4 starts, you need to get a list of questions together that you can turn to after you complete your year-end duties. Part of improving your year-end process involves reflecting on how the previous year-end went, so you can improve moving forward. Taking advantage of the window of time right after you finish your year-end duties is critical, as all of the missteps, nuances, pain points, and opportunities from year-end are fresh in your mind. So as part of your post-year-end process, you’ll want to ask yourself questions to help identify what needs to be on your radar next year and what you need to solve before the next year-end hits. 

So get to work now creating your post-year-end questionnaire. Just remember, it is a living, breathing document. Summer is an ideal time to start or revisit your list of questions. And then, any time you find yourself thinking “I should remember this for next year-end,” pop your document open and adjust your list. Alrighty, let’s get started!

What to include on your post-year-end questionnaire

Year-end looks different for everyone, so logically the questions you prepare will also be unique to your organization. However, as most payroll professionals can attest, there are certain year-end pitfalls and considerations that are universal to any organization. While it’s impossible to provide an exhaustive list, below is a robust list of questions to consider adding to your customized post-year-end questionnaire.

Post-year-end questions specific to payroll

  • Did payrolls get delivered on time to employees? Were you behind schedule, or did an unexpected bank holiday cause delays? How can you avoid this next year? Perhaps you need additional help. Or, if you’re using a payroll provider, you never updated the holiday tables in the payroll system to ensure proper pay dates.
  • Did everything go according to plan with bonus payrolls? Did employees get paid when you intended? If not, do you need to schedule these payrolls sooner? If you rely on another person or department to approve payrolls before they are paid, can you accelerate this process? If the payroll department needs to be notified of bonuses sooner, how can you be invited to the conversation earlier? 
  • Did employees prematurely see bonus amounts on their regular paychecks when it should have been on a separate payroll? If so, how can you remember to schedule bonus payroll runs separately from regular payroll runs?
  • Were all year-end adjustments processed on or before your last payroll of the year? How can you prevent missed or late adjustments from coming through? 
  • Are there any new adjustments that you know will come up next year? If you use a payroll system, have you requested that the adjustment code be added to the system?
  • Are there any unique adjustments (e.g., group-term life insurance (GTL), employer portion of health insurance, gifts, awards, nonaccountable business expense reimbursements) that you made this year and may need to repeat? Documenting these items can help.
  • Are there regular taxable payments that are processed through accounts payable (e.g., tuition, reimbursements, health club dues)? While you will still want to confirm at year-end what was actually processed, it’s also a good idea to proactively ask your accounting or HR department if you should plan for any “regulars” in the upcoming year.
  • If you use a payroll provider, did you receive any late fees from them? If you didn’t submit your payrolls or year-end adjustment payrolls on time, you may have encountered a fee for expedited processing. How can you avoid this moving forward?  
  • Did you encounter any penalties from the IRS or state agencies? This could have been because you didn’t notify your payroll provider or a colleague about changes to your filing frequency or state unemployment rates. 
  • Do you remind employees to file a new Form W-4 if their filing status, exemption allowance or exempt status has changed since their last W-4 filing? How can you bake this into your process?
  • Is collecting W-4s painful? Is there an easier way, like online processing of W-4s? 
  • Have you reissued lost or incorrect checks? Do you have a process in place to ensure the original check is voided? 
  • Did you pull reports with your final accruals balance as of Dec. 31? You’ll want to print and save this for your records.
  • Was year-end processing delayed due to waiting on a third-party sick-pay administrator? If the information you're waiting on becomes available after you completed your year-end duties, did you remember to process everything yourself or ask your payroll company to? 
  • Are you confident that the first payroll of the new year will be accurate? Talk to your HR department to ensure you have the most recent benefit-plan rates, and ensure they’re updated in your records or payroll system. To give yourself adequate time to update benefit-plan rates for employees, schedule your open enrollment period months in advance of year-end. 
  • Were there any particularly stressful points or pitfalls with running your last payroll of the year? How can you improve the process? 

Post-year-end questions related to W-2s and 1099s

  • Do you have undelivered or returned W-2 and 1099 forms? How can you adjust your process or work with your HR department to ensure all current and terminated employee information (e.g., address and name changes) is up to date in your records or payroll system before you finalize your last payroll of the year?  
  • If former employees or contractors come looking for W-2s or 1099s that were sent to the wrong address and returned, do you know how to locate them? Is there a designated, accessible and secure location to store them? To ensure all documents, including W-2s are delivered promptly to the correct address — and stored correctly in your system — remind terminated employees in their exit interview to update their addresses should they move. Provide them with an email address so it’s easy for them to send this information. 
  • Do you routinely need to file a Corrected Wage and Tax Statement (Form W-2c) for employees? Why do you have incorrect W-2 information and how can you ensure this doesn’t happen each year? Is there a dedicated person in charge of updating employee information? 
  • Was any employee information compromised? Do you store employee information in a secure location and have a trusted employee or partner generating W2s and 1099s? 
  • Was the process hassle-free and convenient? If not, what caused the breakdown? Is it time to explore an alternative delivery method like electronic delivery?
  • Are you up to speed on minimums, maximums, and other regulations around social security, 401(K) plans, health savings accounts (HSAs), and flex spending accounts? If this information wasn’t released yet, make sure to look for updates.
  • Were there any communication gaps between you, employees or partners? For example, did employees know when they should expect bonuses? Did you share all required information with internal teams and partners?
  • Is there additional training you need from any of your partners or technology vendors to ensure next year is even better? Is there an associated cost for that training? Does your payroll provider offer additional training, such as webinars?
  • What inefficiencies existed and how can you improve them? Regroup with colleagues and partners to determine where the breakdown occurred. Is technology needed to automate time-consuming tasks or do you need a better internal process? If you do have technology, are you using it to the fullest potential?

Turning post-year-end learnings into solutions

The questions you include on your post-year-end questionnaire are intended to unlock or highlight an issue that needs solving or a nuance that you need to keep in mind for the following year-end. Last-minute projects, corrections, and ongoing inefficiencies can be costly to your organization. Knowing where your breakdowns are occurring will put you in a better position to improve, adjust processes, bring on the right tools and technologies to help, and ultimately find solutions that meet your exact needs. 

There are many ways to turn your post-year-end learnings into solutions. For example, establishing a year-end project team can help. Each year this team can evaluate the outcomes of your post-year-end questionnaire and agree on the best solutions. If technology and outside partnership are part of that solution, Payroll Data is on-call to help. Orbit Solutions, our full-suite human capital management (HCM) platform, and our team of experts have been making year-end faster and easier for organizations for nearly three decades. 

To learn more about how we can help, reach out to your existing client service representative (CSR) or contact our team of experts today.

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