Payroll - Multiple checks

[sjameson]

In Powerchurch v 9 two manual checks were cut and posted through payroll and fund accounting (no taxes or other deductions taken out) for one salaried employee paid monthly. The sum of the two checks equals the employee's net pay for the month. We upgraded to Powerchurch v 11.5 and I need to make the correction of the two manual checks. First, I reversed both checks under Fund Accounting and posted the reversals. Now, I'm trying to run the payroll, but record both checks as they will be reflected on our bank statement at the end of the month. I didn't see an option to do a partial payment in payroll process to affect the net and be able to record both checks. Can you please provide assistance on how to properly record through payroll and reflect both check and amounts?

Check #8590 net amount $205.37
Check #8598 net amount $410.74

Thanks
Sandra

[JohnDMeyers]

I think I'm getting it, but maybe not. Here's what I would do. There are other ways to correct this, as well.

Here are your two check amounts:
Check #8590 net amount $205.37
Check #8598 net amount $410.74

I am assuming these are the original amounts, but it doesn't matter if you follow my example. Just know that I am making that assumption.

Let's say you wanted to subtract $5.00 from each check.

You already reversed these amounts in Fund Accounting, but not in payroll. I would suggest that you want to undo that by entering the reverse of your reverse entry.

So, now Fund Accounting agrees with payroll, again:
Check #8590 net amount $205.37
Check #8598 net amount $410.74

In Payroll, add a Pay Item called "Pay Correction"
DB (some account) $5.00
CR (some account) $5.00

Add this to the employee, turn it on, and process the payroll with only the $5.00 corrections turned on.

Post in Payroll and in Fund Accounting (I would use check# 8590CORR and 8598CORR, and use the same date as the original manual check).

In my example, Payroll and Fund Accounting will both have the following amounts:
Check #8590 net amount $205.37
Check #8590CORR net amount -$5.00
Check #8598 net amount $410.74
Check #8598CORR net amount -$5.00

Note: a "negative" check amount is the same as making a "deposit" in checking, which is where you will find it in the reconciliation window.

[sjameson]

I think I may have confused you. The employee was not paid through payroll as the normal process, but two manual checks (in payroll module v. 9) combined totaled the full amount of the employees net. I need to reverse the manual check as the taxes and other deductions were not captured during the manual check process (both entries Debited Cash (two different amounts) and credited the salary account (two different amounts) for this employee). I need to process it through payroll in order for the taxes to show for reporting purposes.

Based on your response, I thought this would solve my problem:

1. Setup a liability account such as payroll clearing (as a transactional holding account) and an after tax deduction item number for payroll clearing to add to the employees deduction for full net amount.

2. Undo the reversal of both checks in fund accounting, as you suggested, but change the account credit account from salary to payroll clearing - so the clearing account will zero out once the payroll has been processed.

3. Process payroll for this employee and add the new deduction item number (payroll clearing) with full net amount as deduction - so at the end of the transaction the net amount would be zero on the payroll side, but hit cash from both manual checks.

Do you think this would work?

[JohnDMeyers]

I think so, but I am not sure I'm understanding everything clearly.

A liability account is typically used for Federal and State withholding, so you're probably on the right track there.

I'm glad you were able to sift through my previous answer and pull out something useful!