With the end of the year fast approaching, companies are racing to get their HR and administrative concerns for 2014 ironed out. One of the larger areas of focus in this regard is payroll. Preparing payroll documents for the upcoming tax season can seem daunting. However, with a bit of knowledge and some help from a PEO company, your year-end payroll preparations don't have to be stressful. Here are a few things to keep in mind as the end of the year approaches.
Properly itemize expenses
Going through the books to ensure that every company expenditure is logged and classified correctly is important for a number of reasons. Not only is it essential for ensuring that you have an accurate picture of expenses versus revenue for the year, but, as Business News Daily noted, different classes of expenses are treated differently for tax purposes. This can be especially tricky for expenses that appear to be similar but are actually classed differently – for example, taxable expenses are frequently reported toward the end of the year. However, incidental amounts, which can include employee gifts, are better taxed as soon as they are received.
Go over changes to the employee roster
Even if your payroll is automated, hirings, firings and other turnover can throw a wrench in the works come year-end, and you should endeavor to stay aware of these incidents. Specifically, a report from The HR Specialist noted that employees who have left the company in the period between the final pay period of the current year and the first paycheck of the next year should be paid special attention to, and HR services should send checks manually if necessary.
Make sure all departments are on the same page
Since multiple departments work closely with payroll, it's important to make sure everyone is on the same page regarding things like company processes and important dates. Executives must communicate with HR, accounting and other relevant departments – together if possible – so everyone is aware of the final payroll date for the year, and can plan accordingly their respective tasks and prepare for the new year seamlessly.
Check and double-check legislation changes
In the past few years, the Patient Protection and Affordable Care Act has had an effect on how companies must allot for health care spending and taxation. Business News Daily noted that with reporting rules being more complex, it's highly recommended that small businesses seek the help of HR outsourcing companies to help ensure proper procedure is being followed.