The Payroll Blog

News, tips, and advice for small business owners

5 Ways to Prepare for Year-End

Posted On
10/7/2020
By
Stephanie Davis

There is always a lot of activity during the final months of the year.

Loading 2021 - preparing for year-end.

As a small business owner, there are many things that you are responsible for during this time business-wise, on top of everything that happens in your personal life. To make preparing for year-end a little easier, we have some things that you should start thinking about to ensure you can successfully wrap up the year and cross everything off of your year-end to-do list.

Plan for End of Year Payrolls

Because there are so many holidays at the end of the year, your payroll schedule may need some adjusting. Bank holidays are days when financial institutions are closed, meaning if you pay employees via direct deposit, they will not get paid on those days. Knowing about bank holidays in advance will give you time to adjust payroll accordingly and pay employees a day earlier. Additionally, many employers offer end of year bonuses. While this tradition can be great to boost employee engagement, it’s important to remember that a bonus needs to be treated like any other paycheck. Bonuses and holiday pay need to have the appropriate payroll taxes withheld.

Take a Look at Your Finances

According to our survey, cash flow is the second most common worry among small business owners. There are many financial items at the end of the year and it’s important to spend some time looking over your finances, even if it may feel a bit daunting. If you have some extra cash, year-end is a great time to contribute more to your 401(k), donate to charities, or boost 529 contributions. Additionally, if you have an FSA or HSA account, you don’t want those funds to go to waste.

Start Looking for Payroll and Tax Help

While you can start using a payroll provider at any time throughout the year, did you know the end of the year is the best time to switch to a new online payroll service? When you go into a new year with a new payroll provider, you don’t have to deal with the complications of entering prior-year employee wages. If you’ve been wanting to get help from an accountant or bookkeeper, starting at the end of the year can be beneficial. If your main concern is getting help for tax season, you’ll want to start planning early and ensure that your new accountant or bookkeeper will have time for you.

Get Ready for Small Business Saturday

Small Business Saturday is the Saturday after Thanksgiving, falling in between Black Friday and Cyber Monday. This is a big day for small business owners to participate in the busy holiday shopping season. While Small Business Saturday may look different depending on the business you have, there are plenty of ways you can get involved. We put together some tips to see success on Small Business Saturday.

Focus on Your Employees

There are many employee-related tasks you’ll want to keep in mind as the end of the year approaches. Some of the most common are:

  • Improve end of year performance review process. Annual performance reviews commonly occur at the end of the year. While there have been debates about whether this performance review is the most effective, it’s still a common practice for many small business owners. If you follow this approach, make sure you set aside plenty of time to prepare what you’d like to discuss, and ensure there is enough time to talk instead of rushing through the process.
  • Review Form W-4. Because you’ll use Form W-4 to help with the creation of W-2’s, you’ll want employees to review to ensure information is accurate. They will need to account for any address or name changes that occurred throughout the year.
  • Boost employee engagement. Since this is a busy time of year, it’s important to check in on your employees and understand how they are doing. If it’s busy at your business, plus they are busy tackling their to-do lists in their personal lives, burnout can creep in. Try to plan some activities to increase employee engagement at year-end. You don’t need to go over the top, or break your own budget on gifts or a fancy party, but something to show your employees that their work has mattered and is appreciated.

Bottom Line

While it may feel like there is plenty of time before the end of the year, the time is going to fly and we’ll be rolling into the new year before you know it. To make your prep a little easier, consider choosing one year-end task a week to focus on. A simple checklist can keep you on track, but also make your prep work more manageable and less overwhelming to get through.

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This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.