The appropriate way to make a correction, when timecard costs are wrong, is through a timecard, rather than through the Journal Entries/General Ledger directly. There are two ways to accomplish this:

1) Before Final Update

Of course the best time to catch "errors" is before Final Update to the payroll occurs. If the "error" is caught before Final Update, changes can be made to the current timecard and then Pre-Payroll and Journal Entries can be re-run etc. Although resetting Pre-Payroll and re-running Journal Entries takes time – it doesn’t compare to the difficulties on the JE/GL side to make corrections after Final Update.

2) After Final Update

Sometimes, "errors" can’t be caught/fixed before Final Update – for various reasons, some outside the HR/Payroll staff’s control.

In those cases, if it isn’t necessary that "history" reflect the charge to a specific Business-Unit in a specific payroll period, the "correction" can be made in a subsequent pay-period. Follow this procedure:

On a timecard for the employee involved, enter a line just like the line that was done in error, except use NEGATIVE hours. And, enter a line just like the line that was done in error, except use the CORRECT business unit and positive hours. The net effect is zero, so there is no impact on the paycheck, but the Journal Entries will pick up the plus and minus entries and record them to the appropriate accounts.

For example:

On the time card below 40 hours of Regular Pay are charged to Account Number 27227050.511100.

That was wrong. It should have been charged to Account 27227010.511100. It wasn’t discovered until after Final Update for the payroll. So, the General Ledger has costs charged to the wrong Account Number (Business Unit, if you will).

In a subsequent pay-period, the error can be corrected, by:

1. Entering a Negative 40 hours to Account 27227050, and
2. A Positive to Account 27227010,
3. Along with the normal pay-period time entry, 80 hours regular pay, in this example,
4. Use a work-date for the current pay-period being processed.

Notes:

• This corrects the total dollars charged to each account in the General Ledger. The "correction" entry must show a work-date for the current pay-period being processed (1/29/03 in this example). The Journal totals will be corrected, but won’t show that the entry corrects the "error" made on the 1/15/03 entry.

• If it isn’t important to show hours, you can enter Lump-Sum amount to make the correction. Check with your accounting staff to know what works best for your agency.

• If you need/want to show hours, and the pay-rate has changed since the original entry was made, you need to enter the "old pay-rate" in the Ovr/Rt field – so the system calculates the correct dollars to adjust.

• Remember, if you use this method to make corrections, the correction MUST NET to Zero dollars, so it doesn’t impact the employees paycheck gross.

• You need to work with your agency financial/accounting/budget staff on what the best approach on these issues. Agency needs will vary, depending on the type of accounts, whether grants are involved, and similar differences.

The NIS Financial Team