Pays processed incorrectly, incorrect payments made to employee - how to reconcile or fix discrepanc

Hi

I have a matter in which the hours worked in 5 x pay weeks have been incorrectly entered into Reckon Hosted. This has resulted in the employee being underpaid in 2 instances and overpaid by 3 instances. There is only 1 employee.

I have altered the paycheque details in each of these 5 pay weeks so that they show the correct hours worked...and correct super, PAYG etc.

My problem is how to reconcile the amended paycheque details against the amounts actually paid to the employee out of the bank account.

Many thanks, Lee

Comments

glendaveale

I do an entry from bank to say sundry exp for the difference which I can use to reconcile bank and then when you make the adjusting payment from the bank it goes to sundry exps. Hope this makes sense.

glendaveale

The entry is per pay for the difference in that pay. Sorry when I read it back was not clear.

Kris_Williams

Pay the employee but don’t enter anything in Reckon. There are a number of ways to deal with it, but I would manually adjust the statement bank balance by deducting this amount for the purpose of the reconciliation, and when you reconcile to the date that the extra payment comes out all will be well with no adjustment necessary

Acctd4

Hi Lee

I would recommend using a Clearing account. This is a dummy “Bank” account that you can utilise for transferring/clearing multiple amounts as single payment(s).

You would edit the applicable Paycheques to be paid out of this Clearing account, leaving it with a negative balance.

You would then enter the (incorrect) wages as “Write Cheques” (or transfer(s) if you really must L ) - as per your actual bank account – as payments out of the main bank account posting directly back to the Clearing account (This clears the Clearing Account balance back to $ 0.00).

Using a Clearing account is also a very useful method for bulk payroll &/or Supplier payments

For the Chq Name, I usually create a relevant generic “Other Name” for this (eg “Wages Clearing”, “Bill Clearing” etc)

This ensures your data is accurate AND makes your bank reconciliation easier & faster!

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com

Lee_8688889

Hi Shaz,

I would just like to thank you for your suggested solution. I attempted the other suggested solutions but couldn't get the full transparency showing in the system, as there were 5 weeks in which some were overpaid and some underpaid.

Many thanks, Lee

Lynne_8946547

So in total for the 5 weeks was the employee over or underpaid?

Lee_8688889

the net effect was overpayment

Lynne_8946547

Have you sorted this yet?

What I would do is, process the next pay as normal in Reckon, but when you actually pay the employee, reduce the actual payment to his bank account by the overpayment. At this date the bank should then reconcile.

If this has gone over a month end (which it probably has), then you might have to do a reversing journal into the bank account and a suspense account, so that you can do the bank reconciliation.

Acctd4

Hi Lee

No journals are necessary – the Pays should be amended to what should have been paid so that STP figures are correct.

My previous advice regarding the use of a Clearing account still applies – Any overpayment/underpayment excess can be paid from/deposited back between the 2 accounts - the main bank account (as per your bank rec) & the clearing account.

Eg when you process the employee’s next pay, process it in RAH as normal (not short) & “pay” it out of the Clearing account again. The Clearing account’s remaining balance after, will be the net (short-payment) amount to be actually paid to the employee.

In RAH, you can then simply “Write Chq” for this amount from the main bank account posting to the Clearing account.

This will:

Clear the “Clearing” account to $ 0.00
Ensure your actual payments from the bank account match your bank rec
Retain the validity of the payroll figures

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com

Lee_8688889

Hi Lynne, I did sort it out. The problem went over a couple of months so the solution using a Clearing account worked really well for me to ensure I could still do the reconciliation.

Lee_8688889

Hi Shaz, I did follow your solution of using the Clearing account, which worked really well for me. And for the person I share the bookkeeping role with, she was able to see the process used. It was easy for me to do the reconciliation after using the Clearing account approach. thanks again.

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