How exactly to fix common Payroll errors in QuickBooks Payroll tax returns have been prepared and filed showing no balance due (and no notices to 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 will be the result of incorrect or inconsistent procedures. The most frequent error in this region is 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 you want to learn how to Adjust QuickBooks Payroll Liabilities 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 more than expected Payroll Tax Expense is higher than expected Banking 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 tend to be avoided. However, some users will click past these warnings and still process the payroll incorrectly perhaps for a lack of understanding as to how to do otherwise. A customer must first sign up for certainly one of Intuit’s payroll offerings for payroll to be established. Once payroll is installed, a Payroll Setup Tool walks the client through the method. QuickBooks payroll is best suited when all payroll activity is conducted from in the payroll menus. This includes paying accrued payroll taxes to the respective taxing authorities. If the company has written checks or used the Enter/Pay Bills entered bills functionality to fund these liabilities, together with QuickBooks-created Payroll Liabilities account was assigned, the following warning message appears: This message warns but does not prevent users about utilizing the wrong form of payment (for example., Write Checks or Enter/Pay Bills) when attempting to make payroll liability payments. If the user clicks the Pay Payroll Liabilities button within the warning message, the consumer is directed into the Select Date Range for Liabilities dialog. The message directs the consumer to make use of the Pay Payroll Liabilities feature to create a payroll liability check. Find Incorrectly Paid Payroll Liabilities Into the Client Date Review, the Find Incorrectly Paid Payroll Liabilities tool, generates a report of the many 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 not, void the prevailing 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 2nd method should always be used if the check or bill payment check was used and that check has been cleared in a bank reconciliation. If the check or bill payment check is voided, the lender reconciliation with be affected. Using a Journal Entry is never a preferred solution to result in the correction, instead the Payroll Liability Adjustment option must be used to really make the correction. Having the Red Out – Clearing Out Past Due Liabilities The Pay Scheduled Liabilities section into 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 pay the taxes due. If the liabilities were recorded through any other method, such as for example a check being written and coded to the Payroll Liabilities account, the liabilities shown as due will never be reduced. 1. First, verify that the liabilities have already been paid. 2. Select the appropriate item through the Pay Scheduled Liabilities window as shown below and click the View/Pay button. 3. In the Liability Payment – Checking window, replace the check amount to zero. 4. Add additional lines in the expenses area for similar accounts already listed with a bad add up to counterbalance the entry. 5. Include the check number actually used to pay the liabilities within the memo section as a reference. 6. The result will be offsetting amounts to your liabilities accounts which will clear the Pay Scheduled Liabilities window, although not affect the general ledger accounts. Additional Areas to Troubleshoot Payroll Errors Importance of Payroll Item Account Mapping Payroll items must be assigned a merchant account so payroll transactions can be properly recorded within the general ledger. Errors when you look at the set up of the payroll item mapping may 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. Use this report to guarantee the desired General Ledger account will be used. Double-click on almost everything to produce changes. Changes may be put on all transactions, future and prior, only prior transactions from a date forward or no prior transactions. Reconciling Payroll Transactions in the Bank Reconciliation Process The Intuit payroll subscription will determine whether all federal and state payroll tax forms for filing are available within QuickBooks. If you or perhaps the client is preparing the payroll, it is wise to first complete the lender reconciliation to find out any payroll liability payments which may have not cleared and handle them accordingly. Locating Non-Payroll Transactions Users sometimes override error message and record transactions that should appear on payroll reports. Identifying these before the payroll taxation statements are prepared and filed can save the full time to amend or correct these payroll returns later on. From the Employees menu, choose Employee Center, then your Transactions tab. Out of this area, select the Non-Payroll Transactions plus in the Date area, choose the time frame for which the payroll reports are being generated. Shown within the example below is a non-payroll check issued to Gregg. While the check could be recorded properly, this check can also be recorded improperly. This review is likely to 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 must certanly be generated using this section. However, checks in many cases are created directly through the register or via Write Checks. The Pay Scheduled Liabilities section in the Payroll Center will be incorrect. Begin to see the Getting the Red Out—Clearing out Past Due Liabilities section earlier for step by step instructions on how to correct these entries. In the event that liabilities must be adjusted additionally the 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 not to affect the General Ledger accounts dependent on the way the checks to cover the liabilities were originally written.
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