The year-end season is arguably the busiest time of year for anyone in the payroll field (can I get a witness?!). All of the past year’s figures need to be reconciled, W-2 forms need to be generated and distributed, and systems need to be updated for the new year. Of course, all this is on top of the payroll practitioner’s day job of making sure employees are being paid on time. Needless to say, this can be a very inconvenient time for any payroll errors to be found.
If an error is found, there isn’t much to be done besides making the appropriate adjustment to fix the item and move on. Unfortunately, sometimes the adjustments can be very involved and time-consuming, especially if items aren’t caught right away. If your team finds an issue from a previous quarter or year, this can result in days of work reprocessing, reporting, and filing amended documents to multiple agencies, not to mention the costly penalties and interest that might be involved. In order to avoid these situations, it’s a good idea to put some practices in place to avoid errors in the first place.
Use checklists and calendars
A checklist can be helpful in making sure a process is being followed by all members of the team and ensure that steps aren’t being skipped. Checklists can be especially beneficial for activities that might only be done a few times per year, so the team has something to use as a reference. A payroll calendar is a simple and useful tool that can help your team see special processing schedules, track when filings and deposits are due, and stay on top of deadlines.
Any payroll professional who has been in the industry for long enough can share horror stories of bonuses or special arrangements with employees that aren’t discussed until months after they have been paid out. With the abundance of companies allowing remote work, this can be difficult. Regular check-ins and cross-departmental communications are extremely important to ensure information is not missed. The above-mentioned calendar can also be used to manage time-off amongst the team, so there aren’t gaps in coverage during critical periods.
Perform periodic audits
The last thing your payroll system wants to see is an item that has been coded incorrectly in the payroll software after it has been in use for months. Or, there may be an employee whose annual salary was accidentally entered as their hourly wage, or vice-versa. Auditing can help identify inconsistencies in your systems or processes, and can be used as an effective tool to catch issues before they happen or get out of hand. Periodic audits of year-to-date payroll data can also reduce the workload for your team later in the year.
Hire an expert
Working with a company like Valor Payroll Solutions can help. Our dedicated payroll professionals have the experience and expertise to reduce and prevent payroll errors you may have encountered in the past. Contact us today and see how we can streamline your payroll process and ease your burden.