Blog Post

Year-End Preparation Tips for Payroll Service Bureaus | Apex HCM


A new year is fast upon us. If you haven’t yet begun your year-end preparations, “You’re behind the 8-ball,” say Greg Javins and Brian Perkins of Apex HCM.

Planning, planning, planning,” is top priority says Javins, Apex’s Vice President of Operations. “Having a good game plan in going into year-end as to how you’re going to tackle bonus payrolls; how you’re going to print and distribute all of your W2s; ACA and distribution of your 1095s and 1094s – That’s the key it’s all about planning.”

To that end, Apex has released a comprehensive year-end manual outlining all that a payroll service bureau needs to do in order to assure a smooth transition into 2020. Here are five basic, but critical highlights:

  1. Make sure your payroll firm is registered with the Social Security Administration and has a valid PIN and password. Think you’re already registered? Double check. The password on the SSA’s Business Services Online website must be changed at least once every 90 days to keep it from expiring.
  2. Order extras of all necessary tax forms. Apex recommends ordering 25 to 50 percent more than you think you’ll need to assure you’ll have plenty on hand in the event of mistakes, printer jams, etc. Keep in mind that re-ordering on weekends or at the last minute can mean significant delays and may cause you to miss state and federally-mandated deadlines for delivering W2 and other forms to employees and for filing.
  3. Speaking of delivery and filing deadlines – Know them and don’t just meet them, beat them. “Not meeting those deadlines can cause penalties or fines or angry clients and employees,” Javins says. This is where making sure that your payroll is properly reconciled proves critical – the earlier, the better. “Prioritize reconciling along the way. Don’t wait until year-end or quarter-end just to find out you had a problem six weeks ago,” urges Perkins, Apex’s Director of Training & Support. “You’ll end up finding problems that you’ll spend hours and days trying to figure out. No one has that kind of time at year-end.”
  4. Remember that the only constant in life is change. Such is the case with federal, state and local tax regulations. Among the top changes for the new year are a boost in the Social Security Wage base to $137,700 and increases in various retirement caps. The 401(k) contribution limitfor 2020 has been set at $19,500. (This is up from the 2019 401(k) contribution limit of $19,000.) Contribution limits for 403(b) and 457 plans have also been raised from $19,000 to $19,500.
  5. Make sure you verify changes by early January and validate new rates using test companies before processing the first payroll for 2020. Also keep in mind employee-driven changes. For instance, employees who marry or divorce, lose or gain dependents, or change their employment status from salaried to independent contractor all prompt necessary changes in deductions, etc.
  6. Be mindful of holidays and short weeks that can prompt requests from employers to change regular payroll processing dates. Because the first and fifteenth day of the month are popular paydays, you’ll invariably get requests from clients who want the normal January 1 payday to be switched to December 31 instead. Be prepared for crunch time to grant those requests and make sure that your client understands that the switch means that liabilities for that particular payroll change to 2019 rather than 2020. Apex highly recommends that you have clients sign a release form that protects your payroll firm from any resulting penalties or interest.


If you’re an Apex HCM client, visit the company’s online peer-to-peer community for tips, tricks and best practices from other payroll software and service bureaus the same size as yours; watch posted year-end webinars; and know that Apex will offer support hours every Saturday throughout January to help assure a smooth closing out of 2019 and transition into 2020 payroll.

Not an Apex client yet? Our proprietary tax engine and payroll software can help assure your payroll service firm and your clients remain fully compliant with all federal and state tax requirements. Features include the ability to electronically pay and file taxes in most jurisdictions; automate quarter-end and year-end tax processing; and accurately reconcile bank accounts. Plus, we offer high level payroll tax expertise and assistance not just at tax time but throughout the year. Call 877-750-2739 or request a demo online.