How to Accelerate W-2 Processing with an ECM System

2 min read
  • Human Resources
  • Process Automation

It’s tax season—a time of year filled with headaches for payroll departments nationwide.

Most organizations are familiar with the grueling months of distributing, reprinting and revising employee W-2s, but the process doesn’t need to be so painful. Here are three ways enterprise content management (ECM) software can help you prepare for the annual onslaught of W-2s.

1. Ensure Complete W-4 Information

With stiff IRS penalties for filing incomplete tax forms, it’s crucial to collect all legally required information from employees on their first day of work. When an employee submits a W-4 form, payroll departments can make life easier by:

  • Scanning and storing the W-4 form in an ECM repository
  • Filling out metadata fields for the important information in the form, such as address and marital status
  • Setting up the ECM system to automatically verify that the metadata includes all legally required information

Taking these steps ensures that the information on file satisfies IRS requirements for collecting employee tax information. Once the data is verified, the ECM system can send the payroll department automatic email notifications that the information on file is either sufficient or incomplete.

2. Automate W-2 Distribution

Payroll clerks are no strangers to the tedious task of distributing W-2 forms. The process is time- and paper-intensive—especially for organizations with hundreds of employees. With ECM, there’s a better way:

  • Email an electronic delivery consent authorization form to all employees.
  • Automatically email W-2s to employees who click, “I agree.”
  • Archive the email as proof that the form was sent to the employee.

By digitizing and emailing W-2s, organizations can reduce the workload of distributing and verifying timely delivery of sensitive tax information.

3. Automate W-2 Changes

The pains of W-2 submissions span beyond distributing documents and verifying information. Organizations must also manage the barrage of W-2 information changes employees submit during tax season, such as corrections of addresses, withholdings or dependent information.

To easily manage W-2 change requests:

  • Include a “Revisions” link in the initial W-2 email, which employees can use to submit change requests using an electronic form.
  • After you approve or reject employee change requests, the system will automatically:
    • Update the tax information on file.
    • Notify employees of the change request status via email.
    • Save the approved change in the appropriate folder of the repository.

By following these steps, you and your staff will no longer need to pull an employee’s physical file upon each change request. In addition, once the finalized W-2 is stored in the repository, it can be easily routed to other locations for IRS reporting or future audits.

For more tips on streamlining employee management tasks, download The Ultimate Guide to HR Automation.

Photo credits:

W representing by frankieleon via Flickr. CC 2.0.

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