paycheck reversals and adjustments (1)

8/10/2019 Paycheck Reversals and Adjustments (1)

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Paycheck Reversals and Adjustments:

What is a Paycheck Reversal?

A reversal is appropriate when youve produced a check that you subsequently realizeshould not have been produced at all, or should not have been produced how it was,and the check has not been cashed or deposited.

What is an Adjust ent?

An adjust ent is appropriate when e ployee is !"# paid correctly. $ither e ployee ispaid e%tra &by 'ivin' hi hi'her rate ( or e ployee is paid less than what he should beenpaid &by 'ivin' hi lower rate(.

Rules )or Reversal and Adjust ent*

+) the check has not been cashed or deposited, run a reversal. +) the check has been cashed or deposited, run an adjust ent.

$%a ples o) Paycheck reversals adjust ents*

-( alaried $ ployee was paid where he shouldnt have been paid. #his happenswhen an e ployee is ter inated, but the ter ination transaction is !"# enteredin the syste . /y de)ault, People o)t would 'enerate a paycheck. #hePeople o)t user would have to reverse this paycheck usin' "))01ycle Process.

2( $ ployee Paycheck was lost or stolen

3( $ ployee 'ot incorrect rates, or paid hi e%tra overti e, or did not includeoverti e.4( An e ployee should have been paid )or 25 hours o) overti e, but deposited his

check be)ore realizin' the overti e was not on it. 6e requests his overti e pay.

#he adjust ent process calculates the check as it should have been calculated in the)irst place and co pares the new calculation to the calculation )or the ori'inal check. +nthe e%a ple o) unpaid overti e, you issue a sin'le check )or the di))erence. +n so ecases the e ployee i'ht owe the co pany oney, in which case you process ane'ative adjust ent.


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!avi'ation to Reversals and Adjust ents*


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Comparison of Reversal and Adjustment#he Paycheck Reversal Adjust ent process produces di))erent results, dependin' on whetheryou select Reversal or Reversal Adjust ent )or your run control*

Reversal Produces a ne'ative i a'e o) the ori'inal pay record, with all the a ounts chan'ed)ro positive to ne'ative. #his e))ectively backs the check out o) the syste .

Adjustment Produces an o))0cycle paysheet pa'e with two pay lines* a Reversin' Adjust entwith a net pay o) zero and an Adjust ent record where you enter the in)or ation )orthe check as it should have been ori'inally.

When you reverse a check, you 'enerally either cut a new on0de and check )or the correcta ount or do nothin' a)ter havin' reversed it &i) that check shouldnt have been issued at all(.

When you adjust a check, three situations are possible*

!o chan'e in net pay.

7or e%a ple, an e ployees pay is incorrectly char'ed to 8epart ent -5-55 instead o)8epart ent -55-5.

#he co pany owes the e ployee oney.

#he ori'inal check is )or too s all an a ount. 7or e%a ple, you pay an e ployee )or 2hours o) overti e instead o) 25 hours.

#he e ployee owes the co pany oney.

#he ori'inal check was )or too lar'e an a ount. 7or e%a ple, you pay an e ployee )or25 hours o) overti e instead o) 2 hours.

Paycheck Reversal

Run paycheck reversal when a syste 0'enerated check is incorrect and has not beencashed or deposited. #his pro'ra locates the checks youve speci)ied on a special runcontrol and creates an o))0cycle paysheet pa'e )or each reversal. #he resultin' paylinesre)lect the ori'inal paysheet entries, with ne'atives in the hours and a ount )ields.#hese pa'es are display0only.

8urin' the Paycheck Reversal Adjust ent process, the syste akes a copy o) thepaycheck record and reverses the si'ns &plus inus( on the a ount )ields. #he ori'inalpaycheck record is retained, not deleted.


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$%a ple o) a Paycheck Reversal*

Paychecks )or 9:555;

@


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1lick on the link Reverse Adjust Paycheck

Cou need to pick the Pay $nd 8ate that is currently open.

$nter all other relevant in)o o) the check that you want to revere &i.e. check nu er 3@ @(


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Reversal elect )or a check reversal.

Reversal/Adjustment elect )or a check reversal and an adjust ent check.

Delete CurrentReversal/Adjustment

#o delete an unwanted reversal or reversal adjust ent, set up a runcontrol with this option selected and run the PaycheckReversal Adjust ent process

Pick Reversal and click run and process it.

!ow i) you 'o and check the Paychecks, there will be another paycheck entry with sa epaycheck nu ber*


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+! order to con)ir this reversal, we need to run the Pay 1on)ir Process*

1lick Run and Process it.

#he Paycheck status is con)ir ed and "ption is D Reversed.


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1heck C#8 /alance*

#he above entries are been updated a)ter the reversal con)ir ation


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Paycheck Adjustment

#here are 2 possible situations )or this.

#he co pany owes the e ployee oney.

+n this situation, the syste produces a check )or the a ount owed.

#he e ployee owes the co pany oney.

+n this case, you can put the a ount into an arrears balance to be taken out o)subsequent paychecks. "r you can atte pt to 'et the oney back )ro the e ployee byother eans.

:se the Paycheck Reversal Adjust ent pa'e to both adjust and reverse paychecks

+! "rder to use Paycheck Adjust ent, you need to have*

et up the !$#PAC deduction code. et up to collect ne'ative adjust ents.

Setting Up the !"PA# Deduction Code#o process adjust ents, the syste uses a special deduction called !et Pay Adjust ent with adeduction code o) !$#PAC. /e)ore processin' adjust ents, you ust set up this deduction codeon the 8eduction and the Eeneral 8eduction tables and add it to the 1o pany Eeneral8eductions table. Cou can use the !$#PAC deduction that is supplied with the de onstrationdatabase as an e%a ple.

8urin' the reversal step o) the adjust ent process, the syste reverses the ori'inal check,producin' a calculated check reversal. +t does this by subtractin' a !$#PAC deduction equal tothe e ployees net pay on the ori'inal check.


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8elivered !$#PAC 8eduction 1ode*


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Setting Up to Collect egative Adjustments+) the adjust ent results in the e ployee owin' the or'anization, you ust have set up anadjust ent deduction code and a correspondin' adjust ent earnin's code that the syste usesto process adjust ents o) this type.

When you set up the adjust ent earnin's code, you link it to the correspondin' adjust entdeduction code throu'h the Payback 8eduction 1ode )ield on the $arnin's #able 0 #a%es pa'e.

Setting Up an Adjustment Deduction Code

An adjust ent deduction code is necessary to process check adjust ents )or which thee ployee owes the co pany oney. +) you have not already done so, you can set up a 'enericadjust ent deduction code, such as PACA8F. Alternatively, you can establish several suchdeduction codes, one )or each ne'ative adjust ent payback situation youre likely to encounter,but each would require a correspondin' adjust ent earnin's code. 7or e%a ple, i) youreadjustin' checks that were calculated usin' the wron' ta%in' jurisdiction, you could set up a ta%adjust ent deduction code* #AGA8F.

#o set up the adjust ent deduction code*

-. et up the 8eduction table.

"n the 8eduction #able 0 Process pa'e, select the 8eduction Arrears Allowed check bo%and enter the appropriate 'eneral led'er e%pense and or liability accounts.

2. et up the Eeneral 8eduction table.

+) you use the 'eneric PACA8F code, the Eeneral 8eduction table is set by de)ault withthe in)or ation needed to calculate the payback adjust ent deduction.

+) you choose to speci)y your own deduction )or this purpose, you ust de)ine the codeon the Eeneral 8eduction table with your own calculation routine and speci)ications.

3. et up the 1o pany Eeneral 8eductions table.

7or each co pany, add each adjust ent deduction code in the 8eduction 1ode colu n.

Setting Up an Adjustment !arnings Code

An adjust ent earnin's code is necessary to process check adjust ents )or which the e ployeeowes the co pany oney. :se a suitable code to desi'nate this earnin's, such as A8F.

#o set up the adjust ent earnin's code, use the $arnin's and the $arnin's Pro'ra tables.

-. 8e)ine the earnin's code on the $arnin's #able 0 Eeneral pa'e*

Payment "ype elect $ither 6ours or A ount "9.

!ffect on $%SA &e))ect on 7air


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been collected.

"a' (ethod elect peci)ied on Paysheet. #he syste selects the de)ault values )ro thepaysheet.

!arnings elect Add to Eross Pay and Baintain $arnin's /alances. 1lear all other checkbo%es.

)USA* U+S+,nly

1lear all )ields. #his is i portant, because the adjust ent earnin's code should notadd to any ta%able 'ross )ields.

PACA8F 8eduction*


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A8F $arnin' 1ode*


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!ow lets take an e%a ple*

Reverse and Adjust 4-55 check nu ber


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!et Pay is 3 =>.5; : 8


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Pick Reversal and Adjust ent

A)ter the above process, there is a reversal entry in the pay check


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tatus * reversin' and adjust ent is checked

+) you notice the net PAC is 5.55 : 8. As all the net pay a ount is added to thededuction.


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!ntering Adjustment -nformation on the PaysheetWhen you run the Paycheck Reversal Adjust ent process, the syste produces an o))0cyclepaysheet pa'e. #he )irst paysheet entry appears as a Reversin' Adjust ent, with all )ieldsunavailable and a net pay o) zero &blank(.

:se the top scroll area to ove to the other syste 0'enerated paysheet entry, the Adjust entpaysheet. #his is where you enter the necessary adjust ent in)or ation )or earnin's, deductions,

and ta%es.7or e%a ple, i) you )or'ot to pay the e ployee )or -5 hours o) overti e, enter 10 in "verti e6oursH i) you ta%ed her in the wron' ta%in' jurisdiction, enter the correct state or locality.

ave the paysheet when you )inish enterin' your adjust ents.


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Pick the )irst payline *

All Paylines are non0editable


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:se the top scroll area to ove to the other syste 0'enerated paysheet entry, the Adjust entpaysheet. #his is where you enter the necessary adjust ent in)or ation )or earnin's, deductions,and ta%es.

7or e%a ple, i) you )or'ot to pay the e ployee )or -5 hours o) overti e, enter 10 in "verti e6ours


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o there is a new paycheck created


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"nly the a ount the co pany owes is paid to the e ployee.

+7 $ ployee owes E/+ co panyI


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ince we overpaid the $$ in his ori'inal 1heck, $$ owes oney to E/+ 1o pany. 7irsthere, we need to run a pay calc.

+) the e ployee owes you oney, the )ollowin' essa'e appears in the Paysheet, PayrollBessa'es pa'e &assu in' there are no other errors(*

The net pay calculated for this check is a negative amount.#he Bessa'e 8ata )ield at the botto o) the pa'e displays a ne'ative a ount, which is thea ount the syste has calculated the e ployee owes you. #he syste treats this as an errorbecause it is desi'ned to produce checks )or positive or zero a ounts. A ne'ative paychecka ount is not valid.

+) the e ployee is still e ployed, you can 'et the oney back by puttin' it in an arrears balanceand havin' the syste atte pt to take it out o) the ne%t paycheck. +n e))ect, you J'iveK thee ployee the a ount she owes by usin' an adjust ent earnin's code on the adjust entpaysheet. When you run pay calculation, the syste converts the earnin's to the correspondin'payback deduction code.

6ereLs how you set up the arrears balance to collect the overpay ent*

-. Bake sure you have set up the necessary adjust ent earnin's and adjust ent deductioncodes.

ee ettin' :p to 1ollect !e'ative Adjust ents .

2. "n the adjust ent paysheet, enter the overpay ent a ount as "ther $arnin's, usin'the earnin's code you set up )or ne'ative adjust ents.

ave the paysheet.

3. et up o))0cycle pay calculation para eters and run the Pay 1alculation process.

#he syste converts the earnin's to a deduction &assi'nin' it to the correspondin'payback deduction code( and puts the a ount the e ployee owes into an arrearsbalance to be processed in the ne%t payroll.

4. et up o))0cycle pay con)ir ation para eters and run the Pay 1on)ir ation process.

=. iew results on the Review Paycheck pa'es.

. #he overpay ent is deducted in the ne%t pay cycle.
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Payroll $rror Bessa'e*

!ow you take this appro%i ate overpay ent a ount and enter it in the payline.o eti es, the above a ount ust be adjusted based on ne%t ti e payroll error that

you 'et*

+ had to add A8F as 43.4- as + 'ot one ore error and added that &.-; cents ( to the43.-4 which is 43.=-, but resulted into -5 cents net pay ent. o + took out -5 cents )ro43.=- to 'et 43.4-.

Ran a pay calc*


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+) we con)ir the above paycheck, the 43.4- will 'o to arrears*

/ased on PACA8F arrears settin's , the deduction is appear in ne%t paycheck


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"nline 1hecks*

tored tate ent $rror*

paycheck reversals and adjustments (1)

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