Bring the Temperature Down on Year-end Payroll Reporting

There is hardly an aspect of owning a small business that is more sensitive than ensuring employees are paid on time, and as the year closes, ensuring payroll records are sound is especially important. Accountants with payroll clients know year-end reporting is complex and personal.

Payroll is a foundational part of running a business and can account for 70% of operating expenses. With cash flow being the chief concern for business owners and payroll as one of the highest costs of running a business, 67% of accounting firms still offer the service to ease the burden and concern for their clients (processing payroll is listed as one of the top services businesses outsource to their accountant).

It is a sticky, in-demand service. This time of year especially.

For the next few months, accountants are fielding calls and emails with a tinge of desperation around payroll books that are a mess and reporting deadlines that seem impossible to meet. Payroll bookkeeping elements that the client could brush away for another day can no longer be. Now is the day.

Let’s bring some peace to this process.

Examples of Payroll Advisory

Changing the tenor of your engagements with payroll clients may ease the stress of year-end reporting. The more engaged accountants are with their payroll clients throughout the year, the cleaner the books will be at the end. Higher-level service offerings allow accountants more involvement in their client’s business to ensure the health of books throughout the year. Service offerings like:

  • Payroll to revenue ratio.
  • Turnover rate and competitive pay analysis.
  • Breakdown of payroll by cost: average pay, overtime, total payroll cost, and other variables.
  • Evaluation of retirement, health, and other benefits regarding tax incentives.
  • Investment strategies.
  • Compliance and accuracy with tax and labor laws.

Advisory services use a client's payroll data to craft a picture of the health of their business and then convert the data into actionable, understandable information. These longer-term services give the full picture for year-end reporting.

Audit the season

At the start of the year as you wrap up this year-end reporting cycle, block an hour specifically to audit the work of the past few months. Think about the tenor and tone of November - January.

If the mad-dash scramble to pass information back and forth for year-end tax reporting is stressful for both client and accountant, these high-stress clients could be good candidates for payroll advisory services. Reference the specific parameters of these engagements. Consider how many touchpoints there are with these clients and how much interaction exists with their books. A conversation about a more in-depth advisory relationship may be appropriate for these particular clients.

Also think about your clients who experience their busiest season this time of year - retailers, travel industry, caterers, etc. A longer engagement with prior planning throughout the year will ease the burden of the extra layer of financial considerations during the holidays.

Clients who have embraced remote work may have state income tax structures that need extra time and effort allocated to payroll. Take a look at the clients who have embraced remote work and take note of any extra steps needed for these clients.

Consider your payroll tech stack. If adjustments, additions, or changes can be made to your software or workflows, plan time to do this before next year-end. Change management can be an involved process. Taking the time to plan for how technology changes will impact your budget, your clients, and your workflows can buy you valuable time later.

Bring the temperature down

One of the primary roles of an accountant is to bring peace of mind to their clients from January through yes, even November and December. If this month and next are looking thorny for your payroll clients, identify what clients could benefit from more touchpoints throughout the year to bring the temperature down this season. Leverage the madness of this season for everyone’s good.

Establishing a recurring relationship throughout the year where clients and accountants can evaluate the health of often the largest expense for a small business can improve the end-of-year processes for everyone.

As you consider your next steps, Intuit QuickBooks consultants can help you with payroll technology questions. Reach out to see how our staff can best assist you.

Amanda Thompson works on the Intuit QuickBooks Accountant team, developing content relevant to the accounting industry. Before joining Intuit, Amanda worked in marketing at a Top-40 accounting firm where she developed and amplified the firm’s digital presence and thought leadership content.