How do I close the year in Payroll?

• Before you close the year in payroll, print all the necessary month-to date, quarter-to-date, and year-to-date reports associated with the year you are closing (date range 01/01/20YY through 12/31/20YY). You can print 4th quarter and W-2 forms before or after closing the year. Prior quarter totals are stored as far back as one quarter only, and prior year totals are stored as far back as one year only.
• If the last pay period extends beyond the calendar year-end date of 12/31/20YY, you may want to create Billing, Equipment Cost, General Ledger, and Job Cost accrual entries for the earnings expense portion of the time entered to get a clearer picture of year-end costs. Select Tasks, Generate Accrual Entries. These accrued entries may be a part of your reconciliation process at year-end, but they do not affect your W-2 employee totals. In accordance with IRS guidelines, Payroll files are updated by check date rather than period-end date. For more information, refer to “Generating Accrual Entries” in Payroll Help.
• Review all pay, deduction, and fringe setup to verify that the Retain YTD totals at close year check box is selected for the correct pays, deductions, and fringes. See How do I Retain YTD totals for my pays, deductions and fringes when closing the year? for additional information.
• You should close the Payroll Year after posting all checks and correction checks for the year that is ending, and before processing your first payroll of the new year.

To close year in Payroll, follow the steps below:

1. Back up your data. Sage recommends that you back up your entire database before closing the year. This backup can be used to restore data or for reporting purposes. See How do I use File Tools to back up data files? for steps to back up the company data folder.
2. From the Payroll Tasks menu, select Close year.
3. Click Start, and then Yes.
4. Review the Close Year report.
5. Go to File, Company Settings, PR Settings.
6. Verify that the Current Month is January and the Year-end date is correct.

Note: The Close year task does the following:

• Reminds you to back up your Payroll master file.
• Clears MTD, QTD, and YTD totals in the Payroll master file.
• Moves employee totals to the prior period fields.
• Changes the Current Month to January and the year-end date to 12/31/20YY in the Payroll Settings window.