Payroll and check register don't agree!

[DMRussell]

I've been trying to reconcile the checkbook since January. It's a little off every month and I think I've found the problem but not sure how to fix it.

I have one employee (the secretary) who gets mileage for errands. There is an item description in the payroll for mileage. It was coded wrong, as a deduction.

Here's example of her check:
Salary 368.25
FICA -22.83
MC -5.34
FIT -31.58
AZ IT -9.75
Mileage -20.25
Net check 278.50

Here's what Posting Report shows:
Bank -319.00
FICA -22.83
FICA EM -22.83
MC -5.34
MC EM -5.34
FIT -31.58
AZ IT -9.75
Auto exp 20.25
EM Liab FICA 22.83
EM Liab MC 5.34
Salary 368.25

The checkbook register shows this check as $319.00.

I was just going to write a check to her for the mileage by cr the bank and dr auto expense. However, I looked at the activity report for the auto expense account and it show there as a dr, which is correct. I cannot find where it messed up in PR.

Any insight on this will be greatly appreciated.

Dorothea

[Matt]

If I understand your situation correctly the secretary's checks have been written for $278.50, but should have been for $319.00. However, they have been posting for $319.00 in Powerchurch. If so, when you reconcile your bank statement in PowerChurch, how have you been correcting the $40.50 difference to get the reconciliation to balance? You would have needed to debit the bank and credit something for $40.50. Whatever account you have been crediting to get your bank reconciliation into balance for the $40.50, this should be the same account you debit when you go to write her the check for the mileage.

[DMRussell]

I have not finalized the bank reconciliation yet. That's because I can't figure out how to correct it I first thought about just issuing her a check for the error, which would credit the bank and debit the auto expense account. That's when I went looking at the posting register and it's posted correctly but didn't write the check correctly. I'm not sure where to go looking in PC to see where the $40.50 is.

Thanks for your help.

[tborgal]

Why is the mileage amount a minus figure in your example. If this were a plus as I believe it should be this would account for the $40.50. Not sure I understand the posting report however.

[Matt]

Dorothea,

Actually, it makes sense that you haven't finalized the bank recon yet, because you would have had to made an adjustment for the $40.50 somewhere in order to get it to balance. Now that I know that you haven't done that yet there's a couple ways you can fix this--a harder (but theorectically correct) way and an easier (but not quite theorectically correct) way. I'll give you the easier way. If you want the harder way let me know

Here's what you need to do.

1). For each check that was posted to the bank account in Fund Accounting for $319.00, but should have been posted for $278.50, enter the following adjustment in Fund Accounting:

Debit Bank $40.50
Credit Auto Expense $40.50

Use the original check number as the reference number. Once you have posted these adjustments you will be able to clear both the original check and the adjustment off your bank recon, since the net of the two Fund Accounting postings to the bank ($319.00 credit and $40.50 debit) will agree with the actual amount of the check.

2). Write new checks to the secretary for each time the $40.50 was underpaid. Post the checks as follows:

Debit Auto Expense $40.50
Credit Bank $40.50

Note that the posting in step 2 cancels the effects of the posting in step 1, so the total posted to the Auto Expense account will not change. Accordingly, doing both of these steps will allow you to pay the secretary for the unpaid mileage, enable you to reconcile your bank account, and keep the total posted to the Auto Expense account correct.

Matt

[DMRussell]

Matt, thanks for the info. Sorry it's taken so long to get back to you. On top of this reconcile problem, I've had a computer crash so am just now back up and running!

Your solution makes perfect sense - why didn't I think of it? ha ha
That's the great thing about the body of Christ - when one of us needs lifting up, there's someone around to help out.

I'll let you know how it turns out. I DID fix the mileage info on the PR module so this doesn't happen again. It would be interesting to find out, though, how PC posted all that. I'll leave that for another day!

Thanks again.

Dorothea

[Matt]

Dorothea,

You're welcome. Glad I was able to help. Have a great day!

Matt