10 Most Common Payroll Pitfalls Presented by: Tracie Piller, CPP Date: October 13, 2017

Speaker Tracie Piller, CPP Ultimate Software Solution Consultant – Strategy Ultimate Software

Agenda Introduction Mistakes Happen Common Blunders Minimizing Errors Let's get started…

Reversals and adjustments Voids and Reversals Voided Checks Impact Quarter/year-end GL and bank accounts Reversals and adjustments

Process voids promptly Track and compare Supplemental payrolls Recommendations Process voids promptly Track and compare Supplemental payrolls Posting transactions Validate NO NEGATIVE WAGES

Deductions & Earnings Incorrect taxation Impacts Deductions Earnings Employee/Organization Deductions Earnings Taxable Fringe Benefits Examples

Research proper taxation The Fix Research proper taxation FIT/SIT/FUTA www.IRS.gov W-2 vs. 1099 Publications 15 and 15-B Verify set-up on system Test, test, test Process Promptly Save Your Company Money by Doing it Right the First Time

Reciprocal agreements Correct reporting/deadlines/rates Costs State/Local Taxes Employees who move Did they forget to tell you? Reciprocal agreements Correct reporting/deadlines/rates Costs Audits, amendments, penalties

Ensure SUI Rates are updated Research local taxes What to do Employees who move Timing/Checklist Quarterly reminders Reciprocal agreements Ensure SUI Rates are updated Research local taxes Validate with reports

Understand/Know deadlines and rules More to Consider Verify correct set-up APA’s Guide to State Payroll Laws BNA, CCH, State sites Understand/Know deadlines and rules Deposits Filings

Timekeeping – It Matters Challenges Managing the work week Building in rules for OT Start, Stop and Break Time Source document for earnings

Recommendations Recommendations Why? Be involved in configuration Understand rules (by state), holidays, union Periodically test/audit Why? Can lead to issues with union or DOL Builds trust with employees Excellent tool for labor tracking

Intercompany Transfers/Acquisitions Multiple companies Acquisitions/Successor When do taxes start over? Tracking/verifying YTD Costs W-2cs, amended returns, audits and penalties

Understand wages and taxes Things to Remember Understand wages and taxes SS/SUI/FUTA – start over Tax details YTD Deductions

New Technology ESS/MSS Workflow – what is it? Change management Dos and don’ts

Steps to Take Recommendations Example What do you do today? Does it make sense? Process maps Example ESS/MSS and Workflow

Process Map – Address Change

Successful Implementation Key to Success Have a plan Communication Change management/training Manager/employee training Gaining user acceptance

General Ledger Challenges Costs New earnings, deductions and taxes Structural changes Acquisitions Costs Time, corrections, labor allocations

GL Recommendations Get involved Understand basic requirements Relationship with finance Subject matter expert Be proactive Checklist?

Common misconceptions Does it really make a difference? FLSA Overtime Common misconceptions Does it really make a difference? Have to pay OT on other earnings For some employees makes no difference But for others it does!

All earnings to be included Regular Rate of Pay Regular Rate of Pay All earnings to be included Regular, regular overtime, commission, non- discretionary bonuses, premiums Add all earnings and divide by total hours worked

Overtime Example Reg. Rate = $10/hour/OT Rate = $15 Hours = 40 regular, 10 overtime, other earnings = $500 (40 * 10 = $400) + (10 * 15 = $150) + $500 = $1050 Right?

FLSA OT – The Right Way Rate = $10, 40 regular, 10 overtime, $500 other earnings 50 * 10 = $500 + $500 = $1000 = regular pay $1000/50 hours = $20/hour (reg. rate) * .5 = $10/hour (OT rate); $10 * 10 = $100 $500 + $500 + $100 = $1100

Year-end Preparation Waiting too long No checklist Compliance Compounds issues No checklist Compliance Lack of testing No reconciliation W2 totals <> 941 totals

Create a plan/checklist Create a team Where you can find help The Master Plan Start early Create a plan/checklist Create a team Where you can find help APA’s Year-end course Vendors/local chapters

Reconciliation – The Key Create a spreadsheet Taxable wages Taxes that can be manually calculated Collect data each payroll/month Early detection Pay attention to warning signs

Wrapping It Up Rolling the dice Pay Now or Pay Later Questions?

Thank You!