The payroll tax has been prepared & filed viewing no balance due Payroll are two major areas where the accounting software is less forgiving and mistakes are more likely to happen. Inconsistent & incorrect procedures are most often the reasons behind the errors. The common error in this area is that pay payroll liabilities feature wasn’t used and tax payments are entered using Write Checks or Enter/Pay Bill functions.
Common Payroll Error-Clients Write Checks for Paying Tax Liabilities
- If payroll liabilities are higher than expected
- Payroll tax expense is higher than expected
- Bank account appears correct
Warnings Reduce QuickBooks Payroll Errors
The accounting software QuickBooks warns users in several instances whenever they are knowingly or unknowingly failed to follow the recommended procedure. If user carefully takes care of warning, such payroll errors can be avoided completely. There’s also condition when users click previous three warnings, trying to avoid payroll, still not able to overcome the situation, perhaps due to lack of understanding.
Subscription of Intuit’s payroll offerings is must for payroll to be established correctly. After successful installation of payroll, Payroll set up tool walks the client through the process.
If you want to get best out of payroll, then the whole payroll activity is performed from within the payroll menus. It includes paying accrued payroll taxes to prescribed taxing authorizations.
In case of a business, the entity has used enter and pay bills functionality or written checks for paying such liabilities & QB-created payroll liabilities account was assigned, then appears following warning message:
It just comes as a warning message, but couldn’t stop users from against using wrong payment type. Once clicking pay payroll liabilities button in the warning message, the user is directed to the dialog Select Date Range for liabilities.
Find Inaccurately Paid Payroll Liabilities
In client date review segment, find incorrectly paid payroll liabilities tool creates reports of complete coded check transactions to payroll tax vendor. The entries in Payroll center are displayed that are made outside the functions Pay Scheduled Liabilities
Fix Payroll Liability Payment Errors
You can do fixing of payroll tax liability using two methods depending on the situation—
If bill payment or check is used for paying payroll liability then make a determination whether the bill payment or the check is cleared in bank reconciliation.
If check or bill payment isn’t used, then you need to void existing check or bill which is paying payroll liabilities. And then recreate check with accuracy by choosing Employees->Payroll Taxes & Liabilities, then Pay Scheduled Liabilities.
Important: the Second method should be utilized when the check has been cleared in a bank reconciliation. In case of voided bill payment or check, the reconciliation of the bank is affected. One shouldn’t use journal entry as a preferred method for making a correction, the suitable option is Payroll Liability Adjustment.
What’s the Process to Clear Past Due Liabilities?
In the payroll section, the pay scheduled liabilities section may have red overdue amounts.
Liabilities amounts are visible in the section once payroll is generated. These amounts are reduced only in the case when Pay Scheduled Liabilities method is used for paying tax dues. If liabilities are recorded via another method (either by writing check or coding payroll liabilities amount), the liabilities viewed as due won’t be reduced.
Initially, verify whether liabilities are paid
From Pay Scheduled Liabilities window, select the appropriate item as displayed below:
- Set the check amount to zero in liability payment checking window’
- Now, you need to add some additional lines in expenses area similar accounts which are already listed with a negative amount for offsetting the entry
- Next, include check number that is actually used for paying liabilities in memo section as a reference.
- Offset amounts of liabilities accounts will clear pay scheduled liabilities window, however it isn’t going to affect ledger accounts.
Other Areas For Troubleshooting Payroll Errors
How is Payroll Item Account Mapping Important?
In order to ascertain that payroll transactions are properly recorded in the general ledger, one should assign payroll items to an account. With the aid of payroll items listing report, errors in the setup of payroll item mapping can be mapped.
For this, Choose Reports->Lists->Payroll Item Listing report.
Here in this report, you can see earnings through payroll, deductions, tax items, rates, current tax table limits etc.
Such a report is used for ensuring whether desired General Ledger account is used. You need to double click items for making changes, which can be applied to future & prior transactions.
Reconcile Payroll Transactions
Whether all federal and state payroll tax form filing available in QB, it will be determined by Intuit Payroll subscription. It’s wise to complete bank reconciliation for determining whether any payroll liability payments are not handled accordingly.
Locate Non-PayRoll Transactions
Sometimes users override error message record transactions which should be appeared on payroll reports. Identification of such error before preparation of payroll tax returns can save extra splurge of time for amending or correcting such payroll returns again in future.
- In Employes menu, choose Employee Center, then tab Transactions
- Here from this area, you need to select Non-Payroll Transactions
- Date area, choose the time period for which payroll reports are generated.