Out of balance Bank Rec

[Penny_Accounts]

Hi Everyone,

I need help trying to fix my out of balance bank reconciliation. The bank account is out of balance by $37.39

I think the error has occurred from reversing some paycheques for two staff members just after the Xmas/New Year break. One staff member was unwell just prior to Christmas so the dates that were recorded as annual leave had to be changed to personal leave. We also have a 25% leave loading, so this staff member was technically overpaid. Instead of asking him to send the money back to us, I deducted it from a payroll run earlier this month from expenses that he was seeking for reimbursement.

The second staff member is kind of the opposite situation, where I reversed paycheques to add in annual leave taken. This staff member was technically underpaid - due to annual leave loading. In a payroll run earlier this month, the staff member was given back pay to cover this amount.

The overpaid staff member was overpaid by $291.25, and the underpaid staff member was underpaid by $253.86. The difference between these two amount is $37.39.

I feel like I have missed something along the way that would have cleared this amount up. But I don't know where exactly or how to fix it.

Using account right v 19.13 - thanks in advance.

[Penny_Accounts]

Umm getting a bit desperate now, as I need to get started on BAS (will be the first time doing it by myself)

@ronatbas maybe you have an idea of what went wrong?

Thanks

[Neil_M]

Hi @Penny_Accounts

I’m sorry you haven’t had an answer before now.

When you reversed and re-entered the payroll transactions where, if I understand your situation correctly, all you have done is swap an amount from one payroll category to another there shouldn’t be any reason why you have an out of balance in your bank account.

Are you able to clarify something, with these two employees leave loading payments, were they included on these payslips or were the employees paid the leave loading and it wasn’t included upon the payslips?

If the pay slips that were reversed were for the correct amounts, then I would go back and delete the reprocessed payslips to start over and try to mimic what has happened in real life.  So, if you paid an employee some annual leave, some sick leave and some leave loading in the one pay then this is what you would record on the reprocessed payslip.

This should mean that the amount that appears in AccountRight and on the bank statement correspond and as a result should mean that you don’t have an out of balance on your reconciliation.

Do let us know how you get on with this,

[Penny_Accounts]

Hi @Neil_M and thank you for your suggestions.

To expand upon the details, this is the information that went through on the payslips originally vs the correction (after a reversal).

Employee A:

week 1 original payslip - 3 days worked, 2 days AL + loading

week 1 corrected payslip - 5 days PL (no leave loading)

week 2 original paylsip - 2 days worked, 3 days AL + loading

week 2 corrected payslip - 2 days worked, 3 days PL (no loading)

week 3 original payslip - 4 days worked, 1 day AL + loading

week 3 corrected payslip - 4 days worked, 1 day PL (no loading)

Thus the nett pay to employee A if you compare payslips each week is not the same amount. Employee A was paid more in the original pay runs than the amended runs.

Employee B:

week 1 original payslip - 5 days worked

week 1 corrected payslip - 4 days worked, 1 day AL + loading

week 2 - no changes made to this employee

week 3 original payslip - 5 days worked

week 3 corrected payslip - 3 days worked, 2 days AL + loading

Employee B was paid more in the amended pay runs than in the original.

To fix the amounts owed to the employees, in an earlier payrun in January, I withheld money to Employee A (who was overpaid in the original payrun) from the reimbursements he was claiming for that week. Then for Employee B who was underpaid in the original payrun, I gave backpay to "top up" what he would have received as AL loading.

I hope that makes it a bit easier to understand?

[ronatbas]

@Penny_Accounts

Can you check that in your payroll categories you have a wages category called Advance and that it is exempted from PAYG and a Deductions category called Repayment of Advance, again no PAYG. Make sure that both employees are ticked in these categories.

Redo the pay of the employee who had sick leave and pay the difference($291.25) to Advance. In his next pay do a Repayment of Advance. Make the reimbursement (in the second pay) the total amount claimed.

My reading of the second employee is slightly different - in the Xmas pay he missed out on his HLL at that time but it was paid in January.  The payroll record should reflect this rather than trying to change history. Unless your HLL is somehow directly linked to Holiday Pay this should not be a problem.

Let me know if you have any problems.

[Penny_Accounts]

Hi @ronatbas

I don't have either of those categories in my payroll

[ronatbas]

@Penny_Accounts

Ok, let's get them set up. Payroll Categories >Wages >New. Salary type which the default so it only a matter of renaming  the account to Advance and making sure that the exemption on PAYG is ticked. Under the employees button tick the affected employee.

Under the Deductions tab create a new category called Advance Repayment, again Salary type and exempt the PAYG. Leave the method as User Entered and tick the employee.

[Penny_Accounts]

Ok thanks @ronatbas I have added the categories.

So to clarify, I need to reverse my first attempt at fixing these pays, and then redo them using these new categories.

For Employee A - I have 3 pays to reverse, and each time I redo them I need to add the difference to the advance category. $291.25 was the total amount overpaid. Then for next weeks' pay run I put the total amount into repayment of advance? Also, I guess I keep using the personal leave category too, so that at the end the correct leave hours are showing as accrued?

[ronatbas · Accepted solution]

@Penny_Accounts

I was having trouble with the first, second etc's so I spreadsheet  the info that you gave above using $100/ day pay.  If you like you can plug in the real daily figures or work out your own format but having it in front of you will make it easier to see whwere the changes need to be made.

[Penny_Accounts]

@ronatbas Thank you very much. Seeing it like that makes more sense!

I will have a go later on today at the reversals, and hopefully that will clear everything up.

Thanks Again