In house Payroll - Clearing old time already paid to salaried employees off Salaries Payable sub ledger and GL
KB Article #:
81863
Summary:
In house Payroll - Clearing old time already paid to salaried employees off Salaries Payable sub ledger and GL
Description:

Using In house Payroll and need to clear old time already paid to salaried employees off Salaries Payable sub ledger and GL. 

Cause:

When using in house payroll, this is usually caused by salaried employees entering time after payroll is run, then not checking the Retrieve Previously Unpaid Hours checkbox on the following payroll.

Resolution:

Note: For multi-company, select each company, change payroll type to Payroll Service, and then complete the following instructions.
To address the issue:

1. Review the Salaries Payable Balance Report under Reports > Payroll to verify the employees that have old time that needs to be cleared, the dates of this time and the dollar amounts per employee.
2. Go to Setup > Employees and make sure the employees that have old Salaries Payable that needs to be cleared are checked to be Hourly employees on their Pay Information tabs.
  •  Do not change any dollar values as we want the average hourly rate to stay the same.
3. Go to Company > Preferences and on the Payroll tab change the Payroll Type to Payroll Service.
  •  Then make the provider Other and add a vendor.Deltek recommends creating your firm as a vendor and use that as opposed to falsely using one of your existing vendor records.
  •  Click Save and Close.
4.  Go to Manage > Payroll and save the file name and location however you would like, it does not come back into play later but will force you to populate this field.
5. For your pay date, use the accounting date you would like to clear this salaries payable as of on your General Ledger.
  • This will need to be at least the last time sheet date that is being cleared.
  • If the dates cross multiple accounting periods (year-end, quarters) then you can do this multiple times and clear different entries with different accounting dates.
6.  In the pay period, use the dates you saw on the Salaries Payable balance report for the given employee. For example, if the time was in the week of 8/11 to 8/17, then use the starting date of 8/11 and the ending date of 8/17.
  •  If the dates are spread over multiple pay periods, complete this multiple rounds instead of encompassing all dates at once.
  •  Otherwise, the system will pay time that was already paid in the in house payroll process.
  •  Be certain to isolate only the dates that need to be paid and cleared from Salaries Payable.
7. Once the dates have been entered,
  • Select the employee, and then click OK.
  • A vendor invoice with the invoice date of the pay date selected on the last screen is generated. Note :The vendor will be your firm.
  •  Find this invoice and edit it on the existing tab in Manage > Vendor Invoices.
8. Note the invoice amount created.
  • This should be the same dollar value of the old time sitting on your Salaries Payable balance for that employee.
  • If not, change the invoice amount to the amount from the Salaries Payable balance report and make a detail line adjustment to balance it out to your Payroll Variance cost expense account
9. Change the overall invoice amount to zero, then in the Detail section create an extra line where you enter a negative line to counterbalance the positive cost expense accounts that already exist.
  • The GL account used should be your Payroll Variance expense account.
  • Important: This is the GL account that was overstated in the first place as you paid a salaried employee would do not have their time in their time sheets beforehand. The system needs to record enough expense to qualify paying that full salary amount, so a debit to Payroll Variance is created. This negative line item on the vendor invoice is the credit to offset that amount.
10. Once the invoice balances to zero, click Save.
  • This is now a zero AP invoice and it does not need to be paid nor will it linger in your AP on your accrual basis financial's.
11. Repeat steps 4 through 10 for each employee where you need to clear their old Salaries Payable without paying it.
12. Return to the Salaries Payable Balance report and refresh it to verify that the old time was cleared.
  •  Print your session journals in Reports > Session Journals for your records.
13. Go to Company > Preferences on the Payroll tab and change the Payroll Type back to Process Payroll and save.
14. Go to each employee record that was altered and check their Salary checkboxes on the Payroll Information tab.

Note: To prevent this lingering Salaries Payable in the future, confirm that the Retrieve Previously Unpaid Hours box is checked in the Manage > Payroll screen prior to processing paychecks for regular (not supplemental) payrolls.


 
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