‘Tis the season – the busy season, that is. December undoubtedly is the most harried time of year for payroll service bureaus and their clients. But it need not be a stressful time if you take a deliberate, disciplined approach to year-end processes. Four top tips for ensuring that your payroll firm and your clientele experience a smooth close out of 2017: Prepare, communicate, validate and protect.
Prepare: There’s no getting around it – planning is critical and must be done in a way that’s tailored to your service bureau’s processes and controls. First, make sure that staff members are adequately trained on all year-end topics that may affect your clients, including third-party sick pay and fringe benefits reporting of items such as company cars and life insurance. These items typically don’t come up in the prior 11 months of the year, so staff, particularly newer employees, may not be up to speed on all the particulars. Even long-time employees may benefit from a brushing up. Create a calendar of tasks and activities and assign each item to specific staff members. Be sure to quantify the expected workload for each task and the cumulative work assigned to each employee so that all are effectively contributing without being overwhelmed. Use a checklist to document progress all the way to completion and insist upon daily communication with staff. It’s easy to assume all is going well until last minute realizations – That’s where chaos and stress occur.
Communicate: As previously mentioned, boosting communication with staff during this time of year is important. But proactive and regular communication with clients is equally critical. Share the process and plans early, assuring that both staff and clients are clear on just what will happen in the coming weeks. Be sure to discuss any applicable new legislation or special issues. A prime example is California’s FUTA (Federal Unemployment Tax Act) Credit Reduction for California employers. This is an additional expense that can be significant – up to $147.00 per employee paid during 2017 – that clients may not be prepared for. Discussing fees is a priority to avoid sticker shock or other surprises, and it’s recommended that you impose and enforce late fees for missed deadlines. This motivates compliance and avoids last minute rushes.
Validate: Leave nothing to chance – Check, double check and triple check all data throughout the entire process. Don’t wait until the end, as it may be too late to address any mistakes. Common mishaps include missing or invalid social security and Tax ID numbers, and negative wage or tax amounts that may cause filing errors. Use AccuWage, a free online application of the Social Security Administration, to check W-2 and W-2c wage reports. And run data integrity logs within Apex weekly to quickly identify and address issues. But don’t rely solely on such programs – have multiple employees go over every detail personally. It’s critical that all data is clean prior to December 31.
Protect: Though your primary aim is to successfully serve your clients, it’s also imperative that you protect yourself and your firm in the process. The year’s end may trigger unusually large payroll runs due to bonus payouts, commissions, etc. This can mean an increased ACH risk. Set and clearly communicate a threshold level and dollar amount, and let clients know that exceeding those levels will require special arrangements and proof of funds.
December need not be a chaotic time for your payroll business. Start early, strategize and stick to your plan.
This Apex blog post guest authored by Jackson Platt, owner of Tribute Payroll in Cumming, GA.