Goodbye, 2020: End-of-Year Responsibilities to Keep Businesses in Compliance
Preparing your business for the new year may rarely be this difficult — or this important.
Each time the calendar reaches a new year, it brings a time of both reflection and anticipation. It’s no different in business.
Owners and employers in businesses of all sizes can use this time to weigh the good and bad of the past 12 months; while setting goals for the next year and visualizing any changes they want to see in the makeup of their companies.
That anticipation may never be more welcome than at the close of 2020.
After a year of uncertainty and adversity, however, there has rarely been more work needed to wrap up the year, particularly regarding regulatory issues. Certain tasks must be completed to ensure your business stays compliant before giving in to the natural tendency of looking ahead.
Entering 2021, compliance-related consistency will be as important as ever — from addressing safety and health concerns going forward to accounting for any credits the business took advantage of in the past year.
Let’s dive into the most important end-of-year responsibilities and break down the tasks which need to be marked off your to-do list.
Safety and Health Going Forward
No matter the circumstances, though particularly important after 2020, the health and safety of all employees is critical. When turning the page to a new year, it is the responsibility of an employer to make sure the workplace provides the best possible environment going forward.
Not only will the end of the year bring a chance to hear the concerns of your workforce, it also provides an opportunity to ensure the business is operating within the compliance standards of state and federal laws.
Those mandates may be fluid during the current health crisis due to the COVID-19 pandemic, and it is important that business owners stay flexible, keeping a close watch on necessary changes for the start of 2021.
Communication is Key
Towards the end of each year, it can be a good time to re-assess the benefits package offered to employees. Which healthcare options work the best for both the business and its employees? Which investment and retirement options are still available to your workers?
Regardless of any changes, it is necessary to clearly communicate those benefits to allow employees to make their decisions. It is also essential to clarify any deadlines or enrollment periods as they approach in the coming months.
Getting ahead of these decisions and announcements will not only simplify the process but will put the entire business and its workforce on the best path towards successful transition into the new year.
Renew Licenses and Permits
States have specific guidelines for keeping any licenses or permits up to date, as well as for reporting any significant business changes if necessary. Taking care of these legal compliance requirements should be near the top of any business’s to-do list at the end of the year.
These needs could include the renewal of any licenses or permits to offer the services your business provides so that you can continue to legally operate. They also could depend on any changes expected in the structure of the business, whether that is simply changing the business address or completing any “doing business as” registrations.
Through the difficulties of 2020, many businesses have had to rethink the way they get the job done. Maybe those changes include the size of the staff, or whether that staff will now work from home. If that is the case, your state may have different compliance notices you are required to present to employees — again placing the emphasis on communication and organization.
Regardless of those changes, every business owner must ensure they complete the requisite forms to avoid being out of compliance or dealing with any regulatory issues. Be sure to check on which of these need to be taken care of.
Make The Next Tax Season Bearable
Of course, the new year also means business owners are in for plenty of work in the coming months. Tax season begins toward the beginning of the year, so having paperwork done, organized, and ready at year-end will make for fewer headaches as tax season approaches.
As we all know, 2020 introduced an abundance of credits, payroll loans, and other new legislative changes due to the pandemic. Many small and mid-sized business owners utilized at least some of those relief efforts, meaning they will have to be accounted for in the spring tax season.
The end of the year brings with it a deadline for some of those relief programs, meaning paperwork and any necessary applications must be in order; to allow a business to take part as intended. If a business hasn’t kept the correct documentation for these loans or credits, the end of the year provides a target to get organized before it’s too late.
As is the case every year, the anticipation of what is to come will only be made sweeter if a business has done the necessary work to set the stage. Whether doing the work yourself or outsourcing to other services, there has rarely been a year when tying those loose ends has been so important.
You can find out more about Payroll Vault and its services at www.payrollvault.com
Sean Manning, CPA, CFE, is partner and CEO of Payroll Vault brands, whose divisions include Payroll Vault Franchising LLC, the payroll service franchise business system, and Payroll Vault – Littleton, the corporate location and independent payroll service company. He is the former owner of Insperience Business Services, an accounting, tax, and business advisory firm located in Littleton, Colorado, that he sold in August of 2018, subsequent to three firm acquisitions from 1998 through 2004.