Bank reconciliation out due to wage adjustment made in next month (April)

Daniella

Hi there,

 

At the end of march I processed the payroll and was later informed that an employee was underpaid.

I made the adjustment and corrected the employees pay - deleting the incorrect pay processed and recording the corrected amount then paying the difference owed to the employee. What I didnt realise was that when I corrected the pay and paid the difference into the employees bank account, it was done on the 1 April. 

Now when trying to reconcile the bank it is showing I am out by the amount that was paid in 1 April.

 

How do I record the ending bank statement for march?

 

Example:

Closing Statement Balance: 21,981.23

Calculated Statement Balance: 21,416.91

Out of Balance (Difference paid to employee 1 April): 564.32

Tracey_H

Hi @Daniella 

 

Thanks for your post. There's a couple of ways you can handle this. The first way is to reverse/delete the second pay and re-process the original pay with the incorrect amount. Then process an adjustment pay for the under payment amount and make the payment date the 1 April. You'll be able to reconcile both payments in the correct month.

 

However, payroll reporting (super, PAYG etc) is based on payment date and the 1st April is a new quarter so that adjustment pay will be reported in April and the April-June quarter, something to keep in mind when reconciling payroll.

 

The other option is to reconcile your bank account to the 1st April instead of the 31 March. You could reconcile for the whole day or just for that one pay transaction. Change the bank statement date to the 1st April and the Closing Statement balance to include the pay.

 

It might be worth speaking to your accountant to check which way is best for your business.

 

Please let me know if you need further help.

 

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