Q How can I prepare for possible changes to my payroll when the new president takes office?
A Payroll is probably the biggest line item in your profit-and-loss statement, and you should expect
more changes to this part of your operation than any
other in 2017. If President-elect Donald Trump stays
true to his “pro-business” theme and his pledge to repeal
the Affordable Care Act (ACA), his policies could quickly
impact your business in many ways.
First, don’t go overboard on ACA compliance or worry
about developing a long-term compliance plan. Many
payroll processing and third-party providers use fear tactics to get you to overcommit to ACA rules that might
soon be repealed entirely. I recommend you comply for
now at the minimum level and make sure you understand
what you’ve committed to.
Meanwhile, make sure your payroll processing company will have your back during these uncertain times.
The first quarter of any new tax year is the best time to
look at your current processes, fees, measurement tools
and results. I just assisted a restaurateur who discovered
that his payroll reports did not list employee hours for
an entire day for all three locations, resulting in no pay
(regular or overtime) for nearly 50 workers for that day!
To make matters worse, the company that operates the
three restaurants was already undergoing a Department of
Labor audit. Fortunately, the operator had started match-
ing up the point-of-sale timekeeping system to the pay-
roll reports generated from an independent third party,
so someone spotted this discrepancy before the auditor
found it. Systems are now in place to double-check the
data generated between the two companies that contrib-
ute to this operator’s payroll processing system.
On a similar note, make sure your payroll system allows
you to manage crew labor as a percentage of sales and
provides you with fully loaded payroll costs, including
salaried employees and payroll taxes. Many third-party
systems do not allow for this measurement, invariably
leading to confusion and arguments over the previous
month’s labor cost percentage when you receive monthly
financial statements from your accountant. You and your
accountant need to agree on the exact payroll costs you
intend to measure from week to week, and your accoun-
tant should reconcile the difference prior to submitting
the reports. Then you can spend your time serving your
How to Better
Payroll in 2017
ACCOUNTING FOR YOUR MONEY
To prepare for new business policies from
Washington, it’s time to fill in the gaps and
fix any bugs in your payroll processing and
labor scheduling systems.
By Michael J. Rasmussen