Year End Tips

At the end of each year, you should be aware of common updates within the system.  I wanted to provide you all with tips that you will need to perform to prepare for the upcoming year and correctly close out the current year (these are in no particular order):

  • Resolve any outstanding payroll related issues
  • Make sure the system is up-to-date with current support stacks, transports, yearend notes, and BSI tub updates
  • Ensure that W-2 boxes are correctly set up before sending out W-2s (If this is outsourced to ADP, then it is not really an issue)
  • Use the Payroll Reconciliation report to tie out with other reports to, for example, FICO documents, third party remittances, and payment mediums.  (This is recommended to do after every payroll period or at the least at the end of every month.)  When the report is run, it is ideal to only look for the /401-/406 wagetypes along with the /701-/706 wagetypes
  • When running the payroll recon report, it is very critical that you run the other reports you are comparing it to with all of the same variances and characteristics.  If you see discrepancies, it is advisable to go back and run each month and compare them to see exactly where the discrepancy is happening
  • Key calculations to look for are: /703 and /705 when multiplied with their appropriate rates are equal to the /403 and /405 wagetypes.

For example:

/703 x .062 = /403 for social security

/705 x .0145 = /405 for Medicare

/710 x applicable rate = /410

/741 x applicable rate = /741

  • Some usual issues  that cause discrepancies are: wagetype mapping to GL Accounts, changing symbolic accounts retroactively, payroll results that have not been posted, posting of technical wagetypes, infotype 0221 (non authorized manual checks), deleted results, third party process, retroactive gross ups can cause tax issues
  • At the end of every year, claims that have been created that have not been cleared need to be maintained.  They either need to be cleared or you need to figure out a way to manage the claims the system created.  (To avoid headaches, many companies simply clear the claims at the end of the year.  The best way to handle claims is to run a report after every payroll period to see what has been created and investigate why the claim was created)
  • Along with claims are the /I** wagetypes.  They are created when the pre-tax deductions exceed the taxable earnings for an employee.  They should clear in subsequent periods when the taxable earnings are sufficient, but if an employee is fired or has quit that will not be possible.  Another reason that the system does not reduce it automatically is because the system wants to catch it up automatically.  Since these wagetypes do not cross years, it is necessary to do an adjustment to taxable earnings.  This needs to be included to in the yearend activities.

The yearend brings about changes and updates that you need to complete to make sure that your system is ready for the new year.  Such things include new unemployment insurance rates that need to be entered, other tax rate changes that need to be manually updated, pay periods that need to be generated and reviewed, posting dates and month end accrual dates that need to be reviewed.

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