Just how to fix common Payroll errors in QuickBooks
Payroll tax returns have been prepared and filed showing no balance due (and no notices into the contrary have now been received) Payroll, (and inventory discussed elsewhere), are two places where QuickBooks® is less forgiving and clients are more likely to make mistakes. Most frequently the errors are the result of incorrect or inconsistent procedures.
The most frequent error in this area is the fact that the Pay Payroll Liabilities feature had not been used; rather payroll tax payments were entered using Write Checks or Enter/Pay Bill functions. If Your Payroll Not Working In QuickBooks and you need any help then call our experts.
Common Error: Clients Write Checks (or use check register) to cover payroll tax liabilities.
Symptoms:
Payroll Liabilities are higher than expected
Payroll Tax Expense is more than expected
Bank account balance appears correct
Warnings Reduce Errors
QuickBooks does warn users in several times when the recommended procedures are not followed. If users heed the warnings, errors are often avoided. However, some users will click past these warnings and still process the payroll incorrectly perhaps for too little understanding as to how to accomplish otherwise.
A client must first contribute to one of Intuit’s payroll offerings for payroll to be established. Once payroll is installed, a Payroll Setup Tool walks your client through the method.
QuickBooks payroll works best when all payroll activity is conducted from within the payroll menus. This includes paying accrued payroll taxes into the respective taxing authorities. In the event that company has written checks or used the Enter/Pay Bills entered bills functionality to cover these liabilities, and the QuickBooks-created Payroll Liabilities account was assigned, the following warning message appears:
This message warns but does not prevent users about making use of the wrong sort of payment (in other words., Write Checks or Enter/Pay Bills) when wanting to make payroll liability payments. Once the user clicks the Pay Payroll Liabilities button within the warning message, the user is directed to your Select Date Range for Liabilities dialog. The message directs the consumer to utilize the Pay Payroll Liabilities feature to create a payroll liability check.
Find Incorrectly Paid Payroll Liabilities
In the Client Date Review, the Find Incorrectly Paid Payroll Liabilities tool, generates a report of all of the manual check transactions coded to a Payroll Tax vendor. The entries made outside of the Pay Scheduled Liabilities function into the Payroll Center are displayed.
Correcting Payroll Liability Payment Errors
Payroll tax liability payments may be corrected via two methods. First, if a check or bill payment was used to pay a payroll liability, see whether the check or bill payment check happens to be cleared in a bank reconciliation. If you don't, void the existing check or bill that is paying the payroll liabilities and recreate the check correctly by selecting Employees > Payroll Taxes & Liabilities, then Pay Scheduled Liabilities.
The second method ought to be used if the check or bill payment check was used and therefore check has been cleared in a bank reconciliation. In the event that check or bill payment check is voided, the financial institution reconciliation with be affected. Using a Journal Entry is not a preferred way to result in the correction, instead the Payroll Liability Adjustment option must certanly be used to make the correction.
Having the Red Out – Clearing Out Past Due Liabilities
The Pay Scheduled Liabilities section when you look at the Payroll Center might have red overdue amounts showing when none exist. The liabilities amounts appear into the section when a payroll is generated and are only reduced if the Pay Scheduled Liabilities method is employed to cover the taxes due. In the event that liabilities were recorded through any other method, such as for example a check being written and coded towards the Payroll Liabilities account, the liabilities shown as due will never be reduced.
1. First, verify that the liabilities have now been paid.
2. Select the appropriate item through the Pay Scheduled Liabilities window as shown below and then click the View/Pay button.
3. within the Liability Payment – Checking window, replace the check amount to zero.
4. Add additional lines in the expenses area for the same accounts already listed with a poor amount to offset the entry.
5. Include the check number actually used to pay for the liabilities when you look at the memo section as a reference.
6. The end result is supposed to be offsetting amounts to your liabilities accounts which will clear the Pay Scheduled Liabilities window, but not affect the general ledger accounts.
Additional Areas to Troubleshoot Payroll Errors
Significance of Payroll Item Account Mapping
Payroll items should be assigned an account so payroll transactions may be properly recorded within the general ledger. Errors in the set up of this payroll item mapping can be located through a Payroll Items Listing report. Select Reports > Lists > Payroll Item Listing report. This report shows the payroll earnings, deductions, and tax items along with the current tax table limits and rates. Make use of this report to ensure the desired General Ledger account is being used. Double-click on any item to make changes. Changes may be put on all transactions, future and prior, only prior transactions from a romantic date forward or no prior transactions.
Reconciling Payroll Transactions when you look at the Bank Reconciliation Process
The Intuit payroll subscription will determine whether all federal and state payroll tax forms for filing can be found within QuickBooks. In the event that you or perhaps the client is preparing the payroll, it is wise to first complete the financial institution reconciliation to find out any payroll liability payments that have not cleared and handle them accordingly.
Locating Non-Payroll Transactions
Users sometimes override error message and record transactions that will appear on payroll reports. Identifying these ahead of the payroll tax returns are prepared and filed can save the full time to amend or correct these payroll returns later on.
Through the Employees menu, choose Employee Center, then the Transactions tab. From this area, select the Non-Payroll Transactions and in the Date area, choose the period of time for which the payroll reports are being generated.
Shown when you look at the example below is a non-payroll check issued to Gregg. As the check can be recorded properly, this check can also be recorded improperly. This review will make that determination.
Creating Payroll Liability Checks Directly when you look at the Checkbook Register
To properly process payroll liability checks, select Employees > Employee Center > Payroll tab, then View/Pay Scheduled Liabilities. Payroll Liability checks should really be generated from this section. However, checks tend to be created directly through the register or via Write Checks. The Pay Scheduled Liabilities section into the Payroll Center will be incorrect. Start to see the having the Red Out—Clearing out Past Due Liabilities section earlier for detail by detail instructions on how best to correct these entries.
In the event that liabilities have to be adjusted together with banking account has been reconciled in QuickBooks, another way to improve the liability is by selecting Employees > Employee Center > Payroll tab and choose Related Payment Activities > Adjust Payroll Liabilities. The Liability Adjustment window appears and changes can be made either to or otherwise not to impact the General Ledger accounts depending on the way the checks to pay for the liabilities were originally written.
NOTE: Choose Do not affect accounts if the General Ledger is correct overall and may never be affected. This case would arise in the event that client paid the best quantity of the payroll liability and used the proper General Ledger coding regarding the checks written into the taxing authorities, but quite simply did not write the checks correctly utilizing the Pay Scheduled Liabilities area of QuickBooks.
Within the example shown above, we are choosing to impact the Liability and Expense Accounts. The following dialog box appears. The typical ledger are going to be update using the adjustment.