Problem with Payroll

[athomas]

Hi Neil - wanted to get your take on this. The secretary processed payroll in power church accurately; however, when she made the direct deposit entry at the bank, she erroneously put it in another employee's account due to a mix up with the routing/account numbers. This resulted in one employee being paid too much and the other nothing. The money was repaid and deposited in the bank with the bank account debited and salary expense credited. I'm not sure of the best way to correct payroll. Is it as simple as voiding the direct deposit check for employee who didn't get paid and process another? Thanks for any help.

[NeilZ]

Hi Neil - wanted to get your take on this. The secretary processed payroll in power church accurately; however, when she made the direct deposit entry at the bank, she erroneously put it in another employee's account due to a mix up with the routing/account numbers. This resulted in one employee being paid too much and the other nothing. The money was repaid and deposited in the bank with the bank account debited and salary expense credited. I'm not sure of the best way to correct payroll. Is it as simple as voiding the direct deposit check for employee who didn't get paid and process another? Thanks for any help.

If both employees' paystubs are correct, and the only error is that there was a manual entry error that has nothing to do with Powerchurch, then there isn't anything to correct in Powerchurch. However, there may be some entries on the bank statement that may not be seen IN Powerchurch because of the corrections needed.

You may need to include a memo for record for your auditors about the mixup and the correction, but I can't see having to change anything in the program. Was there anything else that had to be done?

[athomas]

The problem is the reconciliation is off by the amount of the direct deposit that was paid to the employee in the second month. The reconciliation for the first month balanced as power church payroll and bank statement balanced.

[NeilZ]

The problem is the reconciliation is off by the amount of the direct deposit that was paid to the employee in the second month. The reconciliation for the first month balanced as power church payroll and bank statement balanced.

That's the part that was missing.

By .. 'off' are you saying that Powerchurch does not show the entry, or that the entry shows up but is not listed on the bank account. Not knowing how you're handling your bank entry (is it a total of all paychecks or individual checks) makes it hard to give any advice.

If Powerchurch shows more than the bank statement, I'd void that individual check for the employee. However, you said that the bank corrected the error, and the employee eventually was paid, so I can't see how the bank statement would not match Powerchurch.

The way I take care of this at the one location where I do direct deposit, it has only 2 employees, so setting up a full scale 'direct deposit' setup would not be a good use of funds. I basically set them up as 'vendors' at the bank, when I pay them, the entry on the bank statement is the total of both checks. I have to select both 'individual' check entries in Powerchurch to clear that one bank statement entry.

Its an obvious work around, but it works.

As I said above, not knowing how you do it makes it hard to give a good answer.

[athomas]

All direct deposits are handled individually with a template at the bank but the total amount paid out shows on bank account as one entry called payroll. We always check to insure the two figures agree, It did agree the month the error was made because both employees had pay deposited in their account. One employee did not get any however because the routing and account number for her belonged to another employee who got her own pay plus that of he employee whose account number was incorrect. Reconciliation was correct that month.

The error was not discovered until the next month. The direct deposit in power church was not voided but entered in the bank with correct account number so the employee got paid just not in the right month. Because there was no new payroll processed in power church, the bank total and power church reconciliation did not agree being off by the one check amount.

[NeilZ]

All direct deposits are handled individually with a template at the bank but the total amount paid out shows on bank account as one entry called payroll. We always check to insure the two figures agree, It did agree the month the error was made because both employees had pay deposited in their account. One employee did not get any however because the routing and account number for her belonged to another employee who got her own pay plus that of he employee whose account number was incorrect. Reconciliation was correct that month.

OK .. so the amount deducted from the bank account for direct deposit was correct, but the one employee did not realize he or she did not get paid?

The error was not discovered until the next month. The direct deposit in power church was not voided but entered in the bank with correct account number so the employee got paid just not in the right month. Because there was no new payroll processed in power church, the bank total and power church reconciliation did not agree being off by the one check amount.

So did the employee who did not get paid, did they finally get their paycheck, along with the paycheck for the next pay period? Was the employee who received double the amount, were the funds then withdrawn from their account to correct the error? How was this corrected?

Again, there's a lot of assumptions here I can make, but I'm not sure I'd be right?

[athomas]

The employee who was overpaid repaid the money. It was deposited in the bank and salary expense credited. The other employee was made whole but in another month. As i stated earlier, the reconciliation for the first month balanced because the bank thought she was paid although payment went into another employee account. The next month when the employee was made whole, no additional payroll was processed and the bank statement reflected the payment. Power Church was off the amount of the check. If another check is processed, it will make it appear she was paid twice unless the original is voided. How will this affect the previous reconciliation since it reconciled properly?

[NeilZ]

The employee who was overpaid repaid the money. It was deposited in the bank and salary expense credited. The other employee was made whole but in another month. As i stated earlier, the reconciliation for the first month balanced because the bank thought she was paid although payment went into another employee account. The next month when the employee was made whole, no additional payroll was processed and the bank statement reflected the payment. Power Church was off the amount of the check. If another check is processed, it will make it appear she was paid twice unless the original is voided. How will this affect the previous reconciliation since it reconciled properly?

OK .. so the other employee was 'made whole' the next month how? You didn't process payroll, so I'm going to assume that someone just transferred funds using the bank interface online?

Did anyone enter a transaction in Powerchurch to reflect that payment? I would have assumed that a manual check was written to show the transaction, since no additional payroll was run. That's what you're missing.

[athomas]

Is this a manual payroll check. If so,with or without taxes or an AP manual check. Thank you so much for your help.

[NeilZ]

Is this a manual payroll check. If so,with or without taxes or an AP manual check. Thank you so much for your help.

Again, I'm just assuming that the payment made to make the employee whole was the net amount as normally reflected as the check amount. There would be no need to deduct taxes as that was done in Payroll. You're just entering the transaction to reflect the 'out of Powerchurch' payment made via the bank online system.

If the Powerchurch total is off by the exact amount of the paycheck, that is the bank shows LESS than what Powerchurch does, then the AP manual check, or Fund Accounting transaction should correct that issue.

Do you see where I'm going?

[athomas]

yes, this worked. thanks again