It’s human nature to pay more attention when things go wrong than when they’re running smoothly. This is particularly true when it comes to payroll. Come payday, an employee checks her bank account, sees her paycheck has been deposited and that the amount is what she expected. Check. She moves on to pay her bills or transfer some money to savings.
But if the check does not appear on her statement or the amount is not what she expected, suddenly alarm bells go off in her head. What happened? Did her company make a mistake? Are they intentionally cheating her? Are they in trouble financially? You get the picture.
How can businesses avoid embarrassing blunders like this, the kind that can put your employee engagement and reputation at risk?
Paying attention to payroll
Many employers only start paying attention to payroll when W-2 season begins at the end of the year. Then they scramble to make sure their employees’ data is correct, that their deductions are what they should be, etc. Questions invariably come up and at such a late date it becomes incredibly stressful. Once their employees receive their W-4s, more questions arise and the stress exponentially increases.
Common payroll changes that happen between October and January include:
- Requests for 401K deduction increases that will max out an employee’s yearly contribution
- Holiday bonus payouts
- First-of-the-year pay increases
- Requests for changes in W-4 withholdings
- Changes in employment status
Of course, many of these changes happen throughout the year, but they tend to increase at the end of the year when tax time is fast approaching.
“Our clients are very active at year end, and it’s not only around their regular payroll, but they’re also doing Christmas and year-end bonuses, as well as rate increases at the beginning of the year. A lot of those changes can be very stressful for our clients,” said HR&P Payroll Specialist Victor Gomez.
A payroll checklist for a new year
Waiting until the end of the year to look at your employees’ payroll data is a guarantee for sleepless nights and worry.
HR&P Payroll Specialist Tamara Desmond observed, “My first piece of advice to clients is to ask their employees to look at their first pay stub in January. Is their social right? Is their address correct? Do they know what they’re claiming on their W-4? That way they avoid finding out too late that they’ve been taxing the employee incorrectly all year.”
One way to position yourself for an uneventful end-of-year next year is by keeping a payroll checklist for yourself and your employees starting now.
Your payroll checklist would include questions like:
- What statutory and voluntary deductions are being claimed and are they showing up correctly?
- Has there been a pay increase and is it showing up accurately?
- Have regular and overtime hours been entered and coded correctly?
- Who are my new hires and are they set up correctly?
- Has anyone been terminated? Does their paycheck reflect unused vacation days, severance pay, etc?
- If your business has multiple locations, are your allocations for job costing correct?
You can read more about payroll checklists here.
Partners in payroll
For many businesses, getting some outside help brings peace of mind come payday.
Tamara Desmond said, “We bend over backwards to eliminate stress from the payroll process. Let’s say someone wants to give a hundred dollar raise to an employee, but they make a mistake that could result in giving that person a thousand dollar raise! We’re the second set of eyes on our clients’ payroll processing to keep costly errors like that from happening.”
That second set of eyes looking at your numbers from January 1 through the end of the year helps guarantee your employees’ paydays will be consistent and accurate. A knowledgeable partner is aware of changes in regulations that could affect your payroll and can notify you of those changes.
When looking for the right payroll partner, look for a firm that offers a dedicated representative who will be assigned to your business. There’s nothing worse than paying for a service and then ending up in a queue of callers helped by random representatives who aren’t familiar with your account. Having a dedicated representative that sees your payroll week in and week out and who will be quick to notice any discrepancies in your paperwork means you won’t have to worry about missing something important. This also helps you avoid costly budgeting mistakes.
“When we bring on new clients, we ask them what kind of reporting has worked for them in the past. If they’ve worked with a payroll partner in the past, we also talk about what didn’t work and how we can provide something different and better that will meet their needs,” said Victor Gomez.
At HR&P we can tailor a reporting solution that fits your specific needs. We offer customized reports that give you a snapshot of everything that’s set up in our system so reviewing your information is simple and painless.
At the end of the year, you want to kick back and reflect on the past year’s successes and what you want to tackle in the New Year. You don’t want to spend that time stressing about payroll changes and your W-2s. Hiring a partner in payroll makes good business sense — and eliminates the worry that you’ll have new payroll problems in the future.
Have questions about payroll or want assistance with other HR compliance and administration issues? HR&P can help. Please contact us.