You may still be thinking about your summer vacation – or may even be on it! but before you know it, year-end will be upon us again.
While you can’t jump into your prep with both feet just yet, dipping a collective toe in can ensure you’re well-positioned when the time comes.
And you can do it in just about every Finance department: Payroll, A/P and Benefits.
By completing just one task in each group you can be confident this year-end will be the smoothest yet. Here’s what they are.
In Payroll: Check those fringe benefits
More than any other finance function, Payroll appreciates how important it is to start early on year-end.
And the folks at the American Payroll Association have offered direction on just how to do that at its recent annual conference in Minneapolis.
Their advice: Along with your regular payroll reconciliation process, make sure Payroll staffers are double-checking any fringe benefits your company offers employees to ensure you’ve accounted for all taxable income.
Specifics to watch for:
- group term life insurance
- vehicle usage
- employee financial awards (including gift cards)
- education assistance
- moving expenses
- international assignments (if your company is paying for the employee’s meals and lodging), and
- travel expenses for an employee’s spouse on business trips.
In A/P: Corral those W-9s
A trip to the filing cabinet can help Accounts Payable feel confident it will be ready when 1099 time rolls around.
The last thing anyone wants to do is to have to start tracking key info down from vendors at year-end. But a few minutes now can prevent that 11th hour scramble.
Two-thirds of the way through the year is the perfect time to back and review files for any vendors your company added during that block of time.
That way you’ll know A/P has everything it needs from all its new vendors well before you need it.
And if you don’t, now’s the time to nail that down, whether it means requesting a new W-9 or just verifying info you have on the one on file.
You might also suggest that while staffers are reviewing their files that they mark each vendor that needs to receive a 1099 in your accounting system.
That way, when year-end arrives, you can sort by that field and immediately see who needs a 1099 and who doesn’t. Huge timesaver!
In Benefits: Offer up HSA info
There’s plenty of uncertainly for employers and employees alike with key portions of the Affordable Care Act kicking in for 2015.
Why not do all you can to clear any confusion you can regarding employees’ health benefits?
Health savings accounts are a great place to start.
And there’s no shortage of confusion afoot: In a recent survey, 69% of people incorrectly thought they’d lose unspent HSA money at year-end.
Sounds like some education could be used STAT. And you have a few options:
- The most common method benefits pros use to educate employees about HSAs is a “yearly planner” model. This is where employees use their HSA like a checking account for tax-free payments of medical expenses. Of course, this method assumes employees have a good grasp on what they spend on medical in a year – and only about a third actually do.
- Another type of education to consider: as-needed usage. Let folks know when a medical expense comes up, they can add money to an HSA and reimburse themselves, garnering a retroactive discount of 25% to 30% in tax savings.
You can also give employees a heads-up on just how much they can put away in an HSA according to the Taxman.
IRS released 2015’s contribution limits back in April. Next year, the HSA contribution limit – employee and employer – will be $3,350 for individuals and $6,650 for families. And HSA
catch-up contributions for employees 55 and over will remain at $1,000. (Info: Revenue Procedure 2014-30, www.irs.gov)
The sooner you share this info, the sooner employees can start preparing to make their decisions that are due at year-end.
None of these will take your departments longer than a few hours now, and they could save many more hours come December and January.
