EOY Checklists
Transcript of EOY Checklists
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T H E U LT I M AT E G U I D E :
GETTING YOUR BUSINESS READY FOR END OF YEAR
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TA B L E O F C O N T E N T S
Introduction
The Quick Checklist
Getting Your Employees Ready
The Checklist for Getting Your Employees Ready
Getting Your Accounting Ready
The Checklist for Getting Your Accounting Ready
Getting Your Taxes Ready
The Checklist for Getting Your Taxes Ready
How ZenPayroll Can Help
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INTRODUCTION
The end of year can be a very stressful
time for you and your business. Thats
why we wanted to help take some of the
anxiety out by providing you a helpful
guide on how to get your business ready
for the end of year.
Weve broken this guide into three
pertinent sections for your business:
employees, accounting, and taxes. Each
section includes detailed to-dos, best
practices, and common areas of concern.
We also provide a printable checklist in
each section so you can quickly stay on
top of things.
At ZenPayroll, we try to make payrolleasy and delightful. We believe many
of the anxieties for your companys end
of year preparation stems from legacy
processes and confusing information.
With this guide, we hope to help small
business owners like you navigate the
ins and outs of getting your business
ready for end of year.
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GETTING YOUR EMPLOYEES READY
VERIFY EMPLOYEE DATA
Verify Employee Name
Verify Employee Address
Verify Employee Social Security Number
File W-2
VERIFY EMPLOYEE BENEFIT INFORMATION
Confirm retirement plan eligibility
Confirm health benefits (and imputed wages)
Confirm fringe benefits
Review sick time
Review vacation time
Review deferred compensation
VERIFY CONTRACTOR INFORMATION
Verify Contractor Name
Verify Contractor Address
Verify Contractor Identification Number
File 1099
END OF YEAR EXTRAS
Grant year-end bonuses (if any)
Appreciate your team!
GETTING YOUR ACCOUNTING READY
PROFIT & LOSS REVIEW
Categorize your expenses
Look for anomalies
Review P&L again after adjustments
COLLECT W-9S
Collect W-9s from vendors and contractors
Issue 1099s for vendors (ZenPayroll will do this for
you) who youve spent $600 or more for services
GATHER AND ORGANIZE YOUR RECEIPTS
Gather receipts
Organize receipts by category
Copy down your thermal receipts
RECONCILE YOUR BANK ACCTS AND CREDIT CARDS
Check end-of year bank and credit statements match
your financial statements.
Match your accounting software ledger balance with
your accounts
ACCOUNTS RECEIVABLES AND INVOICES
Collect outstanding invoices before year-end
Check your Days Sales Outstanding to see if there
areas of concern
TAKE PHYSICAL INVENTORY
Match physical inventory with balance sheet
Appraise current value of inventory
GETTING YOUR TAXES READY
GO OVER YOUR BOOKS
See checklist on Accounting
Gather and Organize Your Receipts
See checklist on Accounting
Home Office Deduction
Check to see if you qualify
Calculate your deduction
Vehicle and Mileage Deduction
Calculate your deduction at $0.56 per mile
Deduct additional costs like parking fees and tolls
Payroll Taxes
See checklist on Employees
Travel Expenses
Collect your travel information including plane fare,
lodgings, meals, taxis, fees, tips
THE QUICK CHECKLIST
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GETTING
YOUR
EMPLOYEESREADY
The end of year is an important
time for every company, especially
for your employees. As a business
owner or employer, there are a
multitude of things you have to get
done to make sure your employees
are ready and compliant for the end
of year. Thats why we put together
this checklist to help you get your
employees ready for end of year.
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1. VERIFY EMPLOYEE DATA
Its important to review employee data for the end of
the year, particularly with employee names, addresses,
and social security numbers. Improperly filing this could
lead to penalties for each mis-filed W-2. Check with your
employee to make sure his or her employee information
is correct.
If youre still not certain about your employees social
security number or just want to get it verified, the IRS
provides employers with the Social Security Number
Verification Service (SSNVS) to minimize employee name
and SSN mismatches.
You can access all this information on your ZenPayroll
dashboard for employers and employees. ZenPayroll will
automatically calculate and electronically file your W-2s,
but you can access it anytime. The deadline to furnish the
W-2 is on February 2.
Dont forget you have to verify employee data for both
active and terminated employees.
2. VERIFY EMPLOYEE BENEFITS
We often set and forget employee benefits. But the end
of the year is an important time to verify your employee
benefit information for your employees.
For most retirement benefit information, like your 401(k),
youll want to give advanced notice of benefit notices, like
enrollment features and withdrawal provisions to your
employees. If your company matches, your employees
may want to fully-fund their plan by the year-end. The
limit is $17,500 per employee and the catch-up for
employees over 50 is $5,500. For more information on
retirement plans for small businesses, check out the IRSs
page 401(k) for small businesses.
For health benefits, youll want to confirm your employees
have selected and contributed to their respective health
care plans year to date. For employees on a Flexible
Spending Account (FSA), make sure your employee has
spent the money in their FSA before the end of the year
(or the grace period), or else theyll lose any money in
their FSA. If your plan has a $500 carryover option, let
your employee know.
If youve offered fringe benefits to employees, youll
want to make sure youve withheld taxes for any taxable
benefits your employee has received throughout the
year that have not already had their taxes withheld. This
includes fringe benefits such as: personal use of company
car, employer provided parking, and employer provided
cell phones.
Some of these fringe benefits may be considered imputed
wages. An imputed wage is additional income typically
associated with a service. A popular form of imputed
wages that require an end of year adjustment is group
term taxable life insurance coverage over $50,000.
For more information on taxable fringe benefits, check out
IRS Publication 15-B.
For more benefit related content, check out SHRMs Year-
End Checklist for Retirement and Health Plan Sponsors.
Finally, be sure to confirm all sick and vacation time spent
by your employees. If your employee has sick pay, youll
want to make sure its been withheld properly. Generally,
sick pay is withheld like normal wages and you have to
withhold taxes for employee and employer social security,
Medicare, and Federal Unemployment Tax Act (FUTA).
There are some exceptions so check the IRS for the full
list. For some companies that have a rollover, youll want
to count what dates are available for next year.
Deferred compensation can also be tricky. Your
employees wages may be taxed this year if it does not
meet the requirements of Section 409A. Check the IRS
site for more information.
3. VERIFY CONTRACTOR INFO
Youll want to make sure all your contractor information
is in one place. Like with employees, youll want to verify
your contractors name, address, and identification
number. The ID number can be a contractors SSN, ITIN,
ATIN, or EIN. For information on how to fill out the 1099-
MISC, check out the IRS page.
As with your W-2s, ZenPayroll will electronically file all
1099-MISCs for you and send them to your contractors.
Youll have them available at all times on your dashboard
as well.
If youre switching payroll providers to ZenPayroll and
you run payroll before the end of the year, we can manage
your current years contractor 1099s. Of course, be careful
you dont double file your 1099s with another provider.
4. END OF YEAR EXTRAS
There are always a few loose strings at the end of the year
youll want to watch out for. In particular, the end of year
is a popular time to give bonuses.
With ZenPayroll, we recommend giving bonuses
throughout the year with our spot bonus feature. But if
you plan on giving them out at the end of year, be sure the
bonus has its taxes withheld.
Finally, theres no better time than the end of year to
appreciate your team. Of course wed hope youre doing
this throughout the year too, but nows the time to plan a
company holiday party or white elephant gift exchange.
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DIFFERENT BONUS TYPES!
1. Give something that isnt money: nice
leather goods or quality made athletic gear
will have a more lasting impression in their
day to day lives.
2. Gifts for their entire family: Sending
your employee monthly flowers or a gift
certifiacte for two at a nice restaurant will
help bring the good cheer to their home.
3. Let employees give back to the
community: Prosocial bonuses that inspire
employees to help others can increase
their happiness and job satisfaction
4. Give them something to experience:
Giving your employees a paid vacation will
help broaden their horizons and give themsomething to look forward to.
5. Give praise. One of the most neglected
but effective ways to show your gratitude
is praising your employees in front of their
peers. It is a great motivator and can really
bring a lot of satifaction. And a plaque
wouldnt hurt either!
CHECKLIST 1:GETTING YOUR EMPLOYEES READY FOR END OF YEAR
1. Verify Employee Data
Verify Employee Name
Verify Employee Address
Verify Employee Social Security #
File W-2
2. Verify Employee Benefit Info
Confirm retirement plan eligibility
Confirm health benefits
Confirm fringe benefits
Review sick time
Review vacation time
Review deferred compensation
3. Verify Contractor Info
Verify Contractor Name
Verify Contractor Address
Verify Contractor Identification Number
File 1099
4. End of Year Extras
Grant year-end bonuses (if any)
Appreciate your team!
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GETTING
YOURACCOUNTING
READY
One thing that is important to do
at the end of the year is to closeyour books. Thats why we put
together a check-list of the most
common accounting to-dos for the
end of year. Whether you work with
a CPA, bookkeeper, or just DIY,
this checklist should help get your
accounting ready for end of year.
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1. PROFIT & LOSS REVIEW
The first thing you should do before and after this
checklist is review your profit and loss statement. It s a
good reminder to see how youre spending your money
but also if your expenses are categorized.
Fortunately, if you use an online accounting provider
like Xero or Freshbook, they can sync directly with
your bank account or credit card statement and help
you categorize your expenses.
Return to your P&L again after you reconcile your
bank accounts, receipts, and other potential concerns.
2. COLLECT W-9S
Did you use vendors this year? If so, youll have to
collect W-9 forms for each of them. The W-9 form
can be used as a paper trail for the IRS to track your
expenses. Its also a way for the government to keep
track of vendors and their income.
For every vendor youve spent $600 or more for
services, youre required by law to issue and complete
a 1099 form. The 1099 must be filled out by January
31 and sent to the IRS by February 28 (or March 31 if
you file electronically. Fortunately, your accounting
software solution will likely have a line item for all
1099 vendors and contractors. In addition, ZenPayroll
will file the 1099s on your behalf.
3. GATHER AND ORGANIZE YOUR
RECEIPTS
Its important to gather and organize your receipts. A
shoebox of receipts is the last thing your CPA wants
to see. An easy way to organize your receipts is to use
a software solution, which syncs with your credit card
or bank account. That should help you account and
categorize many of your expenses, which helps you
reconcile your paper receipts. Be sure to copy down
your thermal receipts because they have a tendency to
fade too.
4. RECONCILE YOUR BANK
ACCOUNTS AND CREDIT CARDS
The end of year is important to make sure what you
have in your financial statements match up with
your bank and credit card accounts and your year-
end statements. If you are using online accounting
software, its important your l edger balance matches
as well.
5. CHECK PAYROLL
A payroll provider like ZenPayroll should have
withheld taxes for your employees throughout theyear. However, there are a few common areas to watch
out if youre worried about end of year accounting.
Weve covered this the prior section but they include
withholding taxes for fringe benefits, deferred
compensation, and end of year bonuses.
6. ACCOUNTS RECEI VABLES AND
INVOICES
Theres a tendency to forget to collect on your invoices
if you dont use invoicing software. Without a good
collection system, you may have checks lost in
the mail. Read our piece on How to Master Small
Business Accounting in One Week to learn more about
invoice collection throughout the year. For end of year,
manage your Days Sales Outstanding and follow-up
with your invoices more than a few weeks out. Of
course, collecting on your accounts receivable is good
practice year-round.
7. TAKE PHYSICAL INVENTORY
For some of you, theres no need to t ake physical
inventory. For others, getting an accurate account of
your inventory is important. Youll want to match it
with your end of year balance sheet and itll also be
helpful for your bookkeeper, especially how much
youve spent on it throughout the year and its currentvalue. To determine the value, you can use the gross
profit method or the retail method.
As always, always refer to your tax specialist, accoun-
tant, or bookkeeper for counsel. All information listed
here is for the 2014 tax year.
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GETTING
YOUR TAXESREADY
Doing your own corporate taxes can
be challenging. There are a number
of deductions and rules youll want
to consider so you can minimize
your tax burden. Dont wait until
April to get your company taxes
in order. We selected a few of the
most common areas of concerns
for small business owners and put
them in this helpful checklist.
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1. GO OVER YOUR BOOKS
Theres no better time to go over your books than
now to check your P&L statement to see any red
flags, particularly if you work with a bookkeeper or
accountant. While you can always make adjustments
in the future, take time at the end of year while some
of the context is still fresh. See the prior section for
more accounting concerns.
2. GATHER AND ORGANIZE YOUR
RECEIPTS
As we mentioned previously, expense reporting can
be a real challenge in April i f youre opening a shoebox
of receipts. The IRS may audit your filing for up to
six years, so its recommended you keep a record of
your receipts for at least that long. Most accounting
software providers can even help you categorize
your expenses automatically. See here for some
recommended vendors ZenPayroll integrates with.
3. HOME OFFICE DEDUCTION
One of the most popular deductions for small
business owners (and yet not taken) is the home
office deduction. The IRS provides two methods for
calculating your home office deduction, simplified
and regular. Since most entrepreneurs will use thesimplified option, well cover that here.
First, youll have to qualify for the deduction. If you
meet the two main criteria 1) Regular and Exclusive
Use and 2)Principal Place of Your Business, then
your business is eligible. Check th e IRS site for more
information.
The simplified option uses a standard $5 per square
foot (rather than actual expenses determined by
records) to determine the deduction. To calculate your
deduction, you simply multiply the portion of home
dedicated to home office use (capped at 300 square
feet) by $5 to get your deduction, which is capped at
$1,500 (300 x $5).
Check the IRS site for updated information.
4. VEHICLE AND MILEAGE
DEDUCTION
For some small business owners, operating a vehicle is
part of their daily work. The IRS allows you to deduct
your mileage based on two methods, actual cost or
standard mileage rate.
The actual cost method requires you to keep detailed
records of your business-related expenses, which is
prohibitively difficult for many of us. If you choose to
take standard mileage method, the standard rate is 56cents per mile for business miles driven in 2014.
In addition to mileage, you may deduct additional
costs like parking fees and tolls. See here for more
information on transportation related deductions.
5. PAYROLL TAXES
The end of year is a great time to gross up any fringe
benefits tax withholding purposes if they were not
filed throughout the year. Fortunately, ZenPayroll canhelp you do this within our service. Check out our
earlier section on how to get your employees ready for
the end of year for more information.
6. TRAVEL EXPENSES
Do you travel frequently for work? If so, you may be
eligible to deduct the cost of the trip, including plane
fare, lodging, meals and incidental expenses such as
taxis, fees and tips. For more information on travel
expense deductions, check out the IRS site.
There are even more tax savings you may be eligible
for. Check out the IRS site for more information
on credits and deductions and Publication 463,
information on Travel, Entertainment, Gift, and Car
Expenses.
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HOW
ZENPAYROLL
CAN HELPThe end of year can be stressful. With ZenPayroll,
running payroll doesnt have to be. We make sure
your the end of payroll is easy. Thats why we
calculate, pay, and file your payroll tax filings for
you. We built our software with small business
owners in mind, because we know youre already
busy growing your business.
For more information on how ZenPayroll can help
you, check out the following resources:
ZenPayroll Blog: This is our ongoing corporate blog
that covers the latest small business best practices,
updated multiple times a week.
ZenPayroll Resources: Here are some of resources
to help businesses like yours with funding,
productivity, compliance, accounting, and more.
ZenPayroll Customers: See what other ZenPayroll
customers are doing to grow their business.
JOIN ZENPAYROLL TODAY
AND GET YOUR FIRST TWO MONTHS FREE
ZenPayroll has been a lifesaver. I dont have to
worry anymore and all my back office loads are
fixed with a push of a button thats special.
Tristan Walker, Bevel
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www.zenpayroll.com (800) 936-0383
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