Year-end payroll processing can feel like a daunting task. Many software has been developed to make this task easier and more efficient, but it is still easy to be bogged down in all the logistics of this complicated process. This article will hopefully lay out the steps of the process clearly and provide you with resources to help you through it.

Oracle has put out a checklist of the steps of year-end payroll processing (make sure you log in to access the link). 

The steps they list are as follows:

1. Install the Year-End ESU
2. Verify Payroll History
3. Process the Year-End Rollover Programs
4. Verify Employee Setup
5. Verify Company Setup
6. Verify DBA Setup
7. Build the Year-End Work file
8. Review Information Online
9. Print Audit Reports
10. Print Forms
11. Government Filing
12. Print W-2Cs
13. Backup Year-End Information

Here’s a little more information on each of these steps and some resources to help you through them. 

Step 1: Install the Year-End ESU

Every year, some updates happen throughout Oracle’s JD Edwards One Software. Before trying to do your year-end payroll processing, be sure to update your software. The appropriate ESUs can be found in the Update Center.

These updates may be installed by your IT department, so you might not have to do this directly. If this is the case at your company, it may be helpful to reach out to IT to remind them that it needs doing. If you have trouble remembering to do this, set a yearly reminder on your calendar. For more information, access Doc ID 743162.1 at Oracle’s website. 

Need help installing your year-end ESUs? Contact us! 

Step 2: Verify Payroll History

First of all, make sure your history tables are accurate, specifically these tables: 

F06136	Tax History
F06145	Calendar Month Summary History
F06146	Employee Transaction History
F06148	Employee Transaction History Summary
F06136A	Tax Summary Additional Table (specific to Ohio and Pennsylvania)
F06136B	Tax Summary PA Act 32 Table

The year-end process uses these tables to populate the W-2 form, and they’re used for rollovers as well. If they’re not correct, they’ll throw off everything, so be sure to check them.

In order to verify your history, you’ll need to run some integrity reports. Payroll history integrities ensure that all information on your history tables is accurate before year-end processing. Missing or inaccurate information on your history tables will come out on the integrity reports. Recommended reports to run for integrity include:

R077011	Payroll History, which reads from the ECHO 6136 tax file (F06136)
R77021	PDBA History (F06146)
R77011A R77011B	Tax Reports for Ohio (F06136A/F06166A) and Pennsylvania (F06136B/F06166B)

It’s recommended to run these reports frequently to avoid error buildup when you do your year-end processing. Some people will run them quarterly or even every payroll to avoid an accumulation of inaccuracy. It’s recommended to first run these reports in proof mode, fix any errors, and then run them again in boost mode to be sure your changes were adopted. 

Not every error is actually an error you need to fix. The report might find someone who didn’t pay any federal taxes and flag them as an error when, in reality, that person had enough exemptions to avoid federal taxes. You can tell the report not to print a certain error if you know there are a lot of legitimate examples of such an error. A list of error codes is on Doc ID 1292962.1.

Have trouble verifying your payroll history? Contact us! 

Step 3: Process the Year-End Rollover Programs 

You have to run a year-end rollover program with both the calendar and the month method. The calendar method looks at the F06145 table based on workdays, and the month method looks at it based on the payroll month. This looks at the SSL6146 payroll based on the payment date. Employees who work at multiple companies during the tax year require you to use the Summarize Rollover Balances option. This specifies whether the system will combine like PDPs from the individual companies. This will carry over the total to the employee’s current company. 

Timing for the processing year and rollover can be tricky, so make sure you get the dates right. When you’re doing the payroll month rollover using the F6146, make sure you process the rollover AFTER the last payment date of the current year and BEFORE the first payment date of the new year for the payment month. The payroll month looks at check dates and payment dates, and the calendar month is just concerned with work dates.

Is processing those year-end rollover programs giving you a headache? Contact us! 

Step 4: Verify Employee Setup

Correct setup is crucial for processing W-2s in order to give your employees accurate information. To ensure this, you need to check your employee setup. Make sure the format of the employee name and address is correct and done according to the proper layout for statutory, retirement, third-party-sick-pay, Puerto Rican, multiple-state-residence employees, and contract and pension employees. The system draws much of this information from the Address book  (Need help setting up your address book? Contact us!). Be sure you’ve formatted all employees correctly before creating your year-end work file.

Is your employee setup stressing you out? Contact us! 

Step 5: Verify Company Setup

When you create the year-end workfile, the system pulls the companies’ names and addresses from the Address Book. The system will pull the name, the last two non-blank address fields, the city field, the state field, and the zip code field. Be sure all these are filled in properly.

Dealing with parent companies.

If there are several child companies that have the same tax ID as their parent company, you can report these child companies under the parent company. That means that, for employees who may have worked at more than one child company, they will still only have to fill out one W-2. Make sure the Federal A corporate tax ID doesn’t contain any punctuation or spacing. If there are dashes or anything like that, remove them. 

Is verifying your company setup driving you crazy? Contact us! 

Step 6: Verify DBA Setup

Verify DBA Setup  

DBA stands for deductions, benefits, and accruals. To verify the setup of such things, you will need to enter the correct IRS-defined codes in Box 12 on the W-2, enter accurate numbers and descriptions in Box 14 on the W-2, verify your state wage adjustments for specific states, select the appropriate options for the Repost DBAs to Tax Area Summary program, and you must run the Repost DBAs to Tax Area Summary program. 

Is your DBA setup making you pull your hair out? Contact us! 

Step 7: Build the Year-End Work file 

After you have verified all the information we’ve discussed so far, you’re ready to build your year-end work file. Before you build the work file, you need to create a year-end ID, define work file specifications, assign special handling code information, and enter extra information using the additional information function. You will need a unique year-end ID for each processing year. When you create this ID, you’ll have to define what employees are going to be processed in the work files generated from it. If you’re processing different groups of employees using that same year-end ID, you’ll replace the old group when you run the process for the new group. Once you’ve created this ID, you’ll need to specify which information you want to include in the work file build and which form you want to print. You can only print one form per work file. You’ll need to use the same process to create your separate W-2 build, 499R-2 build, and 1099 build. 

Once you’ve defined the type of form the work file will create for this ID, you won’t be able to alter it. You’ll have to create a new ID. Be sure you’ve specified it correctly when you create it.

You’ll need to define your work file ID to say whether or not to summarize employee tax records under a parent company, whether you’ll use an employee’s resident state or another state as the base state, whether or not W-2 information from multiple states will be printed on one form, whether or not federal wage information is included on all forms, what Social Security wage limits exist, what format should be used for employee names, and who third-party administrators are. 

You can also request processing by specific groups in case you don’t want to change the data selection, but you need to do your employees in smaller groups. You can request processing by company, tax ID, tax area, and address number (used for Changes Only processing only).

Is building your year-end work file a pain in the neck? Contact us!

Step 8: Review Information Online

Before you start printing, you need to go back and verify all that information. Go back and verify your employee, company, and DBA setups, your wage adjustment summaries, your wage adjustment details, your employee wage information, your W-2 counts, your employee form counts your employee form details, your employee form information, your 1099 and 499R-2 information, and your history reports. Make sure everything’s in ship shape before you print. 

Does reviewing your information online feel like a wrestling match? Contact us!

Step 9: Print Audit Reports

Make sure you don’t try to print audit reports before you’ve created your year-end work file build. Once you’ve done this and you’re ready to print some audit reports, go to the Report Setup form. Go to a blank line in the detail area and select Reports Model from the Form menu. From the Reports Model, click Select for the version you want to attach to your year-end ID. Keep doing this until you’ve selected all the reports and special forms you want to add to your year-end ID. Once you’re done, click OK. Go to Work With Year-End Workbench and on the Row menu select Reports. Go to Work With Reports/Special Forms and pick which versions you want to select for processing. Then go to the Form menu and select Submit Forms/Report. 

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Step 10: Print Forms

Go ahead and print everything you need! Forms used to print can be found in this table, which is posted on Oracle’s website. 

Form Name	Form ID	Navigation	Usage
Work With Year-End Workbench	W07810A	U.S. Year-End Workbench menu (G07BTAXUS), U.S. Year-End Workbench	Select a year-end ID.
Work With W-2 Inquiry	W078302A	From the Work With Year-End Workbench form, select a year-end ID, and then select EE Form Inquiries from the Row menu.	Review selected forms and select the record you want to print.
W-2 Review	W078302B	From the Work With W-2 Inquiry form, select a record, and select W-2 Review from the Row menu.	Access a W-2 form to print.
Form Print Control	W07WP2A	From any of the single form review forms, select Print {form type} from the Form menu.	Enter the print date and print single year-end forms.
Work With 1099-Misc	W078309A	From the Work With Year-End Workbench form, select the year-end ID you want to print, select EE Form Inquiries from the Row menu, and then select 1099-Misc Inquiry.	Select a form to print.
Review 1099-Misc	W078309B	From the Work With 1099-Misc form, select the record that you want to review, select Review 1099-Misc from the Row menu, and then select Print 1099-M from the Form menu.	Print the form.
Work With 1099-R Inquiry	W078310A	From the Work With Year-End Workbench form, select the year-end ID you want to print, select EE Form Inquiries from the Row menu, and then select 1099-R Inquiry.	Select a form to print.
1099-R Review	W078310B	From the Work With 1099-R Inquiry form, select the record that you want to print, select Review 1099-R Review from the Row menu, and then select Print 1099-R from the Form menu.	Print the form.
Work With 499R-2 Inquiry	W078321A	From the Work With Year-End Workbench form, select the year-end ID you want to print, select EE Form Inquiries from the Row menu, and then select 499R-2 Inquiry.	Select a form to print.
499R-2 Review	W078321B	From the Work With 499R-2 Inquiry form, select the record that you want to print, select 499R-2 Review from the Row menu, and then select Print 499R-2 from the Form menu.	Print the form.

Is printing your forms a major and frustrating undertaking? Contact us!

Step 11: Government Filing

Once you’ve printed your W-2 and all the other forms you need for your employees, you need to submit your information to the government. You’ll need to submit to the federal government and to the state government. Make sure you start with the federal government because submitting it to the state government won’t work until you’ve submitted it to the federal government. You’ll build a W-2 EFW2 to do this, and this will be submitted to the government electronically. To build this file, select Mag Media Setup from the Row menu. Fill in the fields appropriately. Once you’ve built the file, to send it to the government, contact your system administrator for information about how to do this. Then, to generate the state W-2 EFW2, select the MMREF for State from the Row Menu. Fill in the fields appropriately. Contact your system administrator to submit this file once you’ve created it.

Are you clueless about your government filing? Contact us!

Step 12: Print W-2Cs

Once you’ve printed your W-2s, you may need to make corrections. To do this, you’ll need to print W-2C forms. Make sure to send the W-3C form to the SSA when you print W-2Cs. Once you’ve corrected the errors, you create W-2Cs in nearly the same way that you create W-2s. Just make sure to leave the print date out on the W-2Cs. To print W-2Cs and W-3Cs, go to the Work with Reports/Special Forms form. Pick the programs you want to process, and then on the Form menu click Submit Forms/Report. 

Is printing your W-2Cs making you sweat? Contact us! 

Step 13: Backup Year-End Information 

Once you’ve done all this, you’ll need to back up all your year-end tables and keep a copy of the year-end work file to submit to the SSA. 

Is backing up your year-end information making you insane? Contact us!

Even with all these instructions, this process can still be very confusing! For help in navigating your year-end payroll processing, contact Allari. They’ll provide you with the tools and resources you need to create a year-end payroll processing system that’ll simplify your life and increase your productivity! Go to this link to schedule a time to meet with an Allari team member for assistance.

Most of this information was gained from Oracle’s Year-End Payroll Processing Guide.