Follow these steps:

1. If you have not already done so, run Bank Accounts/Configure/Bank Accounts to designate one or more of your bank accounts as the account(s) from which Payroll checks are issued. (Do NOT set up a separate checking account for Payroll unless you actually use a separate bank account for Payroll.)
2. If you intend to use the Payroll Remittance Checks function, run Payables/Configure/Vendors to set up Payroll tax remittance payees as vendors and then designate the appropriate remittance vendor for each Payroll tax when you configure the tax in the Payroll/Configure/Taxes window. You can see some sample remittance vendors in the Configure/Vendors window shown here.
3. Run Payroll/Configure/Company Information to optionally —
• Select the Payroll departmentalization option that is appropriate for the company. Click here for more information about the options.
• Turn on the option for manual pay distribution if you intend to use this feature.
• Check the option box if you want to print vacation and sick balances on paycheck stubs.
• If you want to use the feature, turn on the option to automatically calculate accrual pay amounts when you enter the number of accrual hours paid out when you run Calculate or ATF Payroll.
4. When you are setting up Payroll from scratch, set up pay factors used in your company's Payroll IN THIS ORDER for maximum effectiveness.

   See the individual factor setup lessons for detailed instructions on setting up the factors.

   1. Income Setup lesson
   2. Deductions Setup lesson
   3. Noncash Benefits Setup lesson
   4. Vacation and Sick Accruals Setup lesson
   5. Tax Calculations Setup lesson (if you have a local Payroll tax)
   6. Taxes Setup lesson
   7. Workers' Comp Codes Setup lesson (if you track and report Workers' Comp), and
   8. And last, Employees Setup lesson

      Add your company's employees, assign and customize pay factors, assign departments (if you turned on "departmentalization"), and enter any HR information you want to maintain. See the individual Employees setup lesson for detailed instructions on setting up employees.

5. Run Payroll/Configure/Historical Pay Information to enter to-date pay totals, if you are bringing the company over from another accounting system after running Payrolls in that system in the current calendar year. Updating employees in 21st Century Payroll for historical Payroll data from another system allows you to issue correct 941s and end-of-year W-2s from 21st Century Payroll. It also tells the system where employees are with respect to minimums, maximums, ceilings, and floors.