Closing out payroll year-end is always a necessary and challenging process. For small business owners in particular, it's usually stressful and involves many long hours. To make matters worse, there are tight deadlines and no room for errors.
To help you through this hectic time of year, I've outlined these four steps that will make the process easier and more manageable.
Payroll year-end can be overwhelming, especially if you don’t know where to start. To begin, prioritize each of your major payroll activities by risk factor (high, medium, or low). Be sure to mark a target completion date beside each item. This will not only give a high-level overview of all the tasks to be accomplished, but you’ll also get visibility into the approximate dates for higher risk tasks. Keep your calendar clear for these timeframes as much as you can.
Using the list of payroll activities from step one, make an itemized list of the detailed tasks that must be completed for each activity. As before, include the due date for every required task. Next, determine the time and resources needed for each task and then divide them into manageable parts.
If you have a team of more than one person to help with payroll year-end, label who's responsible for completing each task. If you're a payroll team of one, this list can help you identify tasks that other staff members may be able to assist you with.
"Planning ahead is key to success, and payroll year-end preparation should take place all year long."
Need help with creating your list? Download our guide which includes a list of payroll activities, tips, and tricks for a smoother year-end.
Check the master plan frequently to ensure that tasks remain on track for their target completion date. The key to staying on target is to accurately allow for the time required to complete each task. Be generous with the time you allot and seek assistance where you can. Remember that obstacles will come up along the way, so you may need to be flexible with some deadlines.
During the stage where T4s are processed, always check and confirm all Social Insurance Numbers (SIN), CPP, EI contributions or deficiencies, year-to-date amounts and manual updates. Also, ensure the code set-up, including earnings and deductions, are routing to the correct T4 box.
Your payroll year-end work is all done once you submit all paperwork and reports to the CRA and Revenu Quebec by the appropriate deadlines, as well as ensure all employees have their required tax forms. Time to put up your feet! And by that we mean, it’s back to your regular job that you’ve been juggling along the way.
Think about what worked well and identify opportunities for improvement next year. Save notes and file lessons learned so that the plan can be modified for the next payroll year-end.
"Build year-end auditing into your year-round plan to keep up-to-date and minimize risk."
You can also download our year-end payroll guide, which has more tips and tricks on completing year-end payroll, as well as a comprehensive list of the 2018-19 payroll legislative changes.
Using the right tool to process your payroll can have an impact on year-end. Cloud-based payroll software that uses automation and offers strategic tools will save you time and help you to better understand your cash flow.
Payroll applications also help to manage compliance. This can reduce risk and potential costly penalties, but also allows you to conduct year-round internal audits to ensure requirements are on track, helping you complete year-end with more confidence and ease.