A person sitting at a desk with a laptop doing year-end payroll reporting

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 and bookkeepers 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 one of the highest costs of running a business, 67% of accounting firms offer the service to ease the burden and concern for their clients. After all, processing payroll is listed as one of the top services businesses outsource to their accountant.

Payroll is a sticky, in-demand service, especially this time of the year, but there is more to payroll than just offering the service. Your clients are looking to you for advisory services related to not only the payroll process, but in other areas as well, including benefits management, capacity, and more.

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 you are with your payroll clients throughout the year, the cleaner the books will be at the end. Service offerings include the following:

  • 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 for 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 new year—as you wrap up the 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 through January.

If the mad-dash scramble to pass information back and forth for year-end tax reporting is stressful, these kinds of 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.

In addition, think about your clients who experience their busiest season this time of the year: retailers, the travel industry, caterers, and other seasonal professions. 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 embrace remote work may have state income tax structures that need extra time and effort allocated to payroll. Take a look at these clients and note any extra steps needed for compliance.

Consider your payroll tech stack. If adjustments, additions, or changes can be made to your software or workflows, plan time to do this before the next year-end cycle. Change management can be an involved process. Taking the time to plan for how technology changes will impact your budget, clients, and 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 the entire year. If the end of the year is looking thorny for your payroll clients, identify which clients would benefit from more touch points 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 is often the largest expense for a small business. The goal is to improve end-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.

Resources for more information

Year-end checklist for QuickBooks Desktop Payroll

Year-end checklist for QuickBooks Desktop Payroll Assisted

Year-end checklist for QuickBooks Online Payroll

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