With the close of the third quarter and the holiday season upon us, Cachet Banq, Inc. and Payroll Tax Management (PTM) are already in the thick of preparing for year end. As an ancillary service provider to the payroll service industry, we suggest that our Remarketers and end user clients maintain meticulous records year round; but it is also good practice to prepare for year end reconciliation and balancing by following the procedures below:
- Verify each client’s year to date totals against what was processed by PTM or your current payroll tax provider. Comparing your totals to your payroll tax processor’s records can help resolve a lot of the out of balance scenarios that may cause delays (and headaches) when preparing the payroll tax filings for your clients.
- Inform your payroll tax processor if you’ve processed any amendments throughout the quarter/year or if you have made any other changes to your totals that could affect the annual payroll tax filings.
- Ensure changes to tax agency filing information are up to date. This includes updated tax filing forms or electronic tax filing specifications that were released throughout the year. In many cases this information will be distributed by various agencies shortly before the end of the year. PTM’s Tax Compliance team monitors the release of this information and works with PTM IT to make the appropriate updates to our payroll tax processing system ensuring that there are no delays in processing for clients. Additionally, your payroll software provider should update their software to reflect the changes in the W-2 file format for the Social Security Administration (SSA) and the state/local agencies that require this information. These changes should all be made prior to sending W-2 information to your payroll tax processor in order for them to be processed accurately.
- Estimate supplies and order early. Estimate the amount of W2 and 1099 forms that you or your clients will need and order them early. This process can take a while, especially when everyone else is waiting until the last minute to order them, so save yourself the hassle and get this done early.
- Confirm benefits and other tax items have been updated and submitted. These other items may include; other compensation, third-party sick pay, expense reimbursements, insurance, and cafeteria programs that need to be added to the wage information.
- Prep early to prepare for new incoming clients. We all know that just because we are busy preparing for year end, our other responsibilities don’t just magically disappear. In order to create a healthy balance between different projects it is best to prepare for year end as early as possible. That way you are not bombarded with last minute changes when your focus should be on other tasks, like implementing new clients for Q1 2013.
- Consider year end bonuses. Payroll providers should remember to consider clients that give large bonuses to their employees. Since these payments can often represent significant dollar amounts, it is important to make sure to do your due diligence and ensure the client has enough funds available. If there is any concern, have the clients wire all or a portion the funds for their bonus payments.