21st Century Accounting Tutorials - Checklists

Payroll

Checklist: Setting up Payroll

Setting up Payroll consists of configuring employee pay attributes and then adding employees and assigning their attributes.

Run Payroll/Configure/Company Information to manage company-wide Payroll functions such as manual distribution or departmentalization of Payroll expenses and liabilities.
Run Payroll/Configure/Income to set up methods for calculating pay (salaries, hourly rates, sales commissions, expense reimbursements, tips, other pay), and other income parameters.
Run Payroll/Configure/Deductions to set up before- and after-tax deductions.
Run Payroll/Configure/Noncash Benefits to set up benefits that affect the employee’s tax liability.
Run Payroll/Configure/Vacation and Sick Accruals to set up accruals if you want to track hours accrued and hours taken.
Run Payroll/Configure/Tax Calculations to set up any user-defined taxes.
Run Payroll/Configure/Taxes to set up the company's Payroll taxes.
If you want to organize employees into categories for reporting, run Payroll/Configure/Categories. (You might use categories to organize employees into departments, for example.)
Run Payroll/Configure/Employees to add your employees and assign pay, deductions, benefits, taxes and so forth, and, optionally, categories.
To establish employee pay histories, run Payroll/Configure/Historical Pay Information to enter quarter-to-date and year-to-date data from your previous Payroll system – any data from this year that was processed in your old Payroll. To verify that year-to-date information is correct, before you run a Payroll in 21st Century Accounting, print the Historical Pay Information report and compare the amounts with earnings records from your previous accounting system.

Checklist: A Payroll Cycle Using Timecards

Normal payroll processing once you’re up and running regularly with Timecard input may optionally include Recurring Timecards.

Manage Recurring Timecards as needed

Manage Recurring Timecards at any time. Recurring Timecards function as "templates" for the working Timecards that are filled with employee hours and so forth in the Timecards window and that are then used in the payroll run. The Payroll supervisor may want to maintain a set of templates that reflect new hires, terminations, and other changes. The supervisor can pare the templates down to only the input necessary for processing.

Sometime between payrolls, NOT on paycheck day, run Payroll/Recurring Timecards.
Create new Recurring Timecards as needed. Modify Recurring Timecards as you wish (delete lines that won’t be used, etc). Delete Recurring Timecards as needed.
Save and close.

Now you can choose to display Recurring Timecards "templates" as fresh Timecards when you open the Timecards window to start entering a new batch of Timecards for processing payroll.

Enter Timecards
Run Payroll/Timecards.
In the "Recurring Timecards: Select" dialog box, enter the end date of the pay period covered by Timecards in the batch you are entering and check pay frequencies of employees whose Timecards you want to include in this payroll run.
Recurring Timecards you’ve set up in the Recurring Timecards window are listed in left pane and first Timecard is displayed with the rows specified for the Recurring Timecard.
Fill in Hours worked and hours taken for each hourly factor.

The employee’s configured rate will be used initially to calculate the pay amount. You can change the rate in the Calculate window or in configuration.

Fill in any other information that identifies the hours for that factor.

You may want to distribute the hours to different G/L accounts, departments, or WC Codes, for example.

Fill in any payout amounts (expense reimbursement, bonus, savings plan).

The factor must be assigned to the employee (in Configure/Employees) to be available for inclusion in the employee’s Timecard.

Review the Totals. Make sure that total hours, especially, don’t exceed the number of hours actually worked and taken.
Check the option to "Save as recurring timecard for this employee" if you want to create Recurring Timecards from working Timecards.
Click Next.

Clicking the Next button saves the Timecard and positions the cursor at Employee ID, ready for the next one in the stack.

Repeat filling in each Timecard in the stack.
Save changes periodically. Save changes when you finish entering all the Timecards.

You can print a listing of the Timecards to compare with the Timecards in the stack, if you wish. The Timecards continue to appear when you open the Timecards window until Calculate Payroll "uses them up" and you close the pay period with Close Pay Period Checklist.

Calculate Payroll

Run Payroll/Calculate Payroll
Select the pay frequency. Modify if necessary. Timecards are included for employees in the pay frequency if the employee’s Timecard end date is on or before the pay frequency’s end date
Click the Calculate button
Review results.
Print the Payroll Register
Review the Payroll Register (unposted activity).
When you have verified the numbers for this payroll run, print and approve checks.
Run Close Pay Period Checklist and close pay period.

Correcting Timecard Errors

The procedure below is one of several paths you can follow for correcting Timecard errors. Print the Payroll Register to verify the payroll numbers after you finish entering and saving the payroll data, before you post.

Print Payroll Register to verify data entry in Calculate Payroll. You discover an error that originates in a Timecard.
Run Timecards.
Highlight the Timecard with the error.
Timecard is grayed out; that is, cannot be edited. Click Unprocess.
Edit the Timecard to correct the error.
Click OK and click Save changes.
Reopen Calculate Payroll.
Highlight the now Unselected employee in left pane.
Right-click, choose Select.
Right-click, choose Calculate.
Your edited Timecard is used.
Click OK.
Print Payroll Register to verify the correction.
Print and approve paychecks.

Checklist: A Typical Pay Cycle (no Timecards)

Payrolls are often very different in setup, although the desired result is always the same: correct calculation of net pay, taxes, deductions, benefits, accruals, G/L distributions, and so forth. Depending on your company, you also need either to successfully print paychecks or to record in your accounting system the paychecks produced by some outside paymaster.

You decided whether to departmentalize Payroll and/or manually distribute earnings. You have set up pay factors and employees. Now use the Payroll/Calculate Payroll or Payroll/After the Fact Payroll frequency selection window to select the pay frequency or frequencies you want to process in a Payroll run.

The checklist that follows provides very general steps for calculating and printing Payroll checks.

Run Payroll/Calculate Payroll or Payroll/After the Fact Payroll.
Select the pay frequency to be paid in this check run.
You can also enter optional pay period start and end dates in the frequency selection window. If you enter pay period start and end dates in the Calculate Payroll frequency selection window, the dates print on paychecks. If you enter pay period start and end dates in the ATF Payroll frequency selection window, the dates in the start and end date fields print on the Payroll Register.
Once the employees in a pay frequency are "ready" in the Payroll window (with a status of "Selected"), press the Calculate button. This method calculates pay using the information that you entered in the Payroll/Configure windows. It also queues up the "Incomplete" employees and lets you go quickly from one "Incomplete" hourly employee to the next. You can also add or edit pay data — say vacation time taken or a one-time bonus — for any employee being paid.
Enter runtime information for employees whose setup information is not complete. For example, you might need to enter regular hours and overtime hours worked during the pay period, accrual hours taken, and special payments such as "savings plan" payouts.
Click the Done button to save your work so far.
Before you print paychecks or post ATF Payroll, print the Payroll Register to verify the data. Select "Current Pay Period" for the Pay period ID and click the checkbox at "Print only unposted activity."

You can think of the unposted Payroll Register as a batch listing of the current Payroll run. If you find errors in your review of the unposted Payroll data, re-enter Payroll as needed, save, and then reprint the unposted Payroll Register until you are satisfied with the results.

Now you can return to the Calculate window or to Print/Paychecks to print and approve paychecks, or to the ATF window to post the ATF checks.
Finally, and very importantly, once everybody's been paid and you are ready to run the next Payroll, close the pay period. Closing the pay period simply prepares the system for the next Payroll run.

If you need to print another check for an employee after you closed the pay period (a bonus, for example), just make an additional Payroll run for that employee and then close that pay period.

Remember that the pay period is not associated in any way with the general ledger posting period. Closing the pay period allows you to edit pay factors and employee information that you can't edit while a Payroll run is in progress — from the time you start Payroll processing until the time you close the pay period.