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.
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:
- Entering a Negative 40 hours to Account
- A Positive to Account 27227010,
- Along with the normal pay-period time
entry, 80 hours regular pay, in this example,
- Use a work-date for the current pay-period
- 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
- 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
- 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