Year-End Relocation Expense Reconciliation: How You Should Prepare
Companies with relocation programs should prepare for their year-end relocation expense reconciliation. The relocation program may have several parts that flow into multiple departments and functions such as Accounting, Human Resources, Travel, and Tax. Therefore, thorough preparation is critical to capture all relevant information. Approaching this requirement with sufficient attention to detail will help ensure data accuracy and on-time reporting.
GMS recommends companies follow best practices for their annual reporting processes. There are five steps companies should take to ensure a positive result.
5 Steps to Prepare for a Year-End Relocation Expense Reconciliation
1. Create a Checklist for the Reconciliation
To start this process, begin writing a checklist. This checklist should include all of the information that accurate reporting requires. The checklist items should include several of the following data points:
- Compensation data
- Employees receiving tax filing services (those on the tax eligibility list)
- Imputed income
Dates that are important for the year-end relocation expense reconciliation should be noted, such as:
- Early cutoff dates
- Due dates to receive data
- Reporting deadline dates
- Tax filing deadline dates
2. Schedule a Year-End Relocation Expense Reconciliation Preparation Meeting
Be sure to include representatives from all departments that must provide data for the reconciliation. Vacation time and holidays may impact work schedules, especially in the month of December. As a result, schedule this meeting to allow plenty of time for employees to learn what their role in the process is, what is needed from them, and to let them prepare the necessary data for reporting.
This meeting provides an opportunity to communicate expectations, as well as to develop relationships with colleagues who can assist with future year-end relocation expense reconciliation processes.
3. Confirm Data Accuracy
Companies should confirm all of the data that is reported for the reconciliation is accurate. Accurate accounting systems and processes should be in place to confirm data that is shared for the review. This step is absolutely vital to the entire process, as incorrect data could result in errors and additional costs. Data that should be confirmed includes:
- Personal time (sick days)
- Social Security numbers
- Tax ID numbers
- Vacation time
4. Finalize the Data to Prepare for Reporting
This step is to ensure the data includes all final reports through the end of the reporting period. Templates and sheets for the year-end relocation expense reconciliation may include blank lines or empty cells with highlights to note future data entry. For example, final year-end payroll figures may not be known until late December. All of this data should be stored on a server that is secure and continually backed up for easy retrieval if necessary.
5. Submit Reports
Confirm the reporting deadlines for every country that requires a report. Different groups of assignees or transferees may need to be further segregated for specific reporting requirements by tax reporting organizations. Whenever possible, send data early and confirm receipt. Note the final tax payment due dates for the year, and arrange for the payments.
What Does This Mean?
Companies should follow best practices to ensure accurate and on-time reporting for their year-end relocation expense reconciliation. By following best practices to confirm data and important dates, companies can avoid costly errors, expensive rework, and rush projects.
What Should Employers do About Their Year-End Relocation Expense Reconciliation?
Employers planning for their year-end relocation expense reconciliation should work with a qualified and experienced Relocation Management Company (RMC). RMCs will have knowledge that can assist companies in understanding all of the important parts of a reconciliation. They can also share recommendations and guidelines to ensure data verification and timely reporting processes. Companies should request an audit of their year-end relocation expense reconciliation to ensure they have a robust process.
GMS’ team of corporate relocation experts has helped thousands of our clients with reviews of their reconciliation processes. Our team can help your company understand how to design a year-end relocation expense reconciliation that follows industry best practices to ensure data accuracy and on-time reporting.
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Contact our experts online to request an audit of your year-end relocation expense reconciliation, or give us a call at 800.617.1904 or 480.922.0700 today.