The time is at hand for review and consideration of the payroll year end process for Great Plains. This year (as in 2008) the year end update involves a service pack installation. In other words, this year end update will change the Microsoft Dynamics version number and more importantly, it must be installed on the server (where it will update tables and stored procedures), then it must be installed on each workstation running Great Plains so each workstation “synchronizes” with the same version as the server. Depending upon the size of the database(s) and the number of workstations, this can take a few minutes, or several hours.
I am not overly found of how Microsoft deals with the Year End Update, especially since the timing for installation is always difficult at year end (re: holidays, scheduling, vacations, parties, etc, etc). Keep in mind the basic timing required for completing the year end processes successfully.
1. Make sure all 2009 pay runs are complete. This means all payroll checks and direct deposits with a date on or before December 31, 2009 have been run. Many companies will set a date after which no payroll checks are allowed to be prepared. Another way of saying this is don’t fire anyone after the cut-off date so you don’t have to provide a final check. Also, don’t wait till the last minute to issue bonus or holiday checks. Anyone still remember those?
2. Install the Year End Update. Remember, this is a Service Pack and can take time. It will probably involve the IT Department or your friendly neighborhood Great Plains consultant (all of which have holidays, vacations, parties and such on their schedules). It is also a good idea to have your Accounting Department verify all is well after the Year End Update install (accountants don’t generally have holidays, vacations and parties as they like to work all the time and don’t have many friends).
3. Create the Year End Wage File. This is the file that your W2s are dependent on. If this file is not created successfully your W2s will not be available for distribution. Not having W2s ready for distribution to employees can get really, really ugly, not to mention how the IRS feels about missing distribution deadlines (I have heard stories about them coming to get first born children after a deadline is missed, but I am pretty sure they are just stories).
4. Setup fiscal periods for 2010. This is pretty easy and has probably been done already, in fact it can be accomplished at any time. If you have rent checks due on January 1st, you have found out you cannot enter the invoice for payment without the 2010 fiscal year in place.
5. Install the 2010 Payroll Tax Update. This is not the same as the Year End Update. The Year End Update is nasty, this one is easy (at least for now it is, maybe Microsoft will change that next year). Once you install the 2010 Payroll Tax Update, you can run your first pay run for 2010. One thing to keep in mind is that the “Calculate Checks” function is when the new 2010 tax tables are accessed. You must install the 2010 Payroll Tax Update before pushing the button for Calculate Checks. If you run a 2010 pay run before creating the year end file, you are screwed (unless you have a backup and then all you have to do is restore the backup, reinstall the last 2009 payroll tax updates, create the year end wage file, reinstall the 2010 payroll tax update and then re-run your 2010 pay run). You really, really don’t want to do this, so make sure someone that can at least walk and chew gum at the same time is keeping track of things.
If you read the Payroll year-end checklists from Microsoft (and I highly recommend that you do so) you will find that they have 17 steps compared to my 5. Some of their stuff is optional (such as closing the 2009 fiscal year or deleting inactive employees). Other items are just plain not possible like “Step 12 Prepare and submit W-2 information in the federal EFW2 format, if required.” No one submits this stuff until it is nearly due and it has been reviewed, scrubbed and reviewed again, that is unless you are not fearful of discussing non reconciling items with the IRS, but then again maybe you don’t much like your first born child.
If you haven’t guessed by now, the payroll year end close can be somewhat intimidating if this is your first time. There are several backups listed in Microsoft’s checklists. Don’t try to save time by not doing the backups. If you have backups, your “you know what” can be saved. Without backups, I am not sure. Your boss just may shoot you.