Cheat Sheet – Error(s) During Payroll Reconciliation

 

Context

One of the essential steps to payroll processing, when it is executed in balanced mode, consists in performing a payroll reconciliation. This operation involves:

  1. Checking, for each employee on the payroll, that the hours worked and premiums entered in the different projects (Project Time sub-module) match the hours worked and entered in the payroll (Payroll sub-module).
  2. Accounting for hours worked and fringe benefits and transferring them to the project.
  3. Generating the corresponding general ledger (GL) entries.

When there is a difference between the amounts in the Project Time and Payroll sub-modules for at least one employee, maestro* renders the payroll reconciliation impossible. The errors must mandatorily be corrected beforehand.

The goal of this cheat sheet is to share with maestro* users knowledge about the various and main causes linked to such discrepancies and the different solutions to fix them.

 

It is important to make sure that all transactions of a period have been transferred and accounted for without any error message.

If maestro* displays a message indicating that unaccounted transactions are present in a period previous to the selected one, it is vital to find these transactions, in order to complete the processing of this/these period(s).Only the current year's periods are checked; the message will not be displayed if there are unaccounted transactions in a previous year. See section Find Unaccounted Transactions for more details.

 

Summary

Find Unaccounted Transactions

 

maestro* > Time Management > Project Time > Processing > Enter Hours

In the Enter Hours option, select the Display Only Partially Transferred Entries icon to only display partially transferred entries (see the image below). The displayed transactions in the grid have been transferred to the project costs with an estimated marginal benefit rate. The actual rate is calculated during payroll conciliation.

The Filter Transactions icon allows to filter which transactions should be displayed. It is possible to see an employee's transactions for a specific period or to enter a start and end date to display all exployee transactions for a certain date range. By selecting a committee, the button , at the right of the dates, will display all periods of the said committee. It will then be possible to select the range of one period to another.

When you search for unaccounted transactions for a given period, it is important not to forget to look at transactions in the Display Only Non-transferred Entries icon. The filter will stay valid as long as the user does not click on the Filter Transaction icon or the Clear Conditions button. If unacounted transactions for a period preceding the current one are found, make sure the period is open before performing the payroll reconciliation.

 

Error(s) or Message(s) Observed in the Payroll Reconciliation Option's Report

 

maestro* > Time Management > Project Time > Accouting > Payroll Reconciliation

Once the payroll reconciliation report has been generated, two error scenarios are possible:

  1. A check is displayed in at least one of the Err column's checkboxes.

The Err column is displayed to the far right of the report for each employee.

  1. The Ins: PROJECT-Activity tag is displayed under the employee's name.

If applicable, the Ins: PROJECT-Activity tag is displayed on the far left of the report, under the employee's name.

 

When the Ins: PROJECT-Activity tag is displayed, the box in the Err column is not checked, since the discrepancy, if applicable, is added to the indicated project-activity.

 

Verification Elements When an X is Displayed in at Least One Checkbox of the Report's Err Column (1st Scenario)

  1. Check if the Hours, Salary, Bonus, VacPay, and Expense columns of the Project section match the amounts in the corresponding columns of the Payroll section.

Observation

Potential Solutions / Explanations

The number of hours displayed is the same but the salary amounts differ

  • An hourly rate modification may have been done. Were there any changes done to the entry of hours after updating the hourly rates?
  • Is a cost price entered in the work category or employee file? 
  • The number of hours worked may be the same but the quantity for each hourly rate might differ (for example, 40 hours worked at a normal rate, plus 5 hours worked at double rate do not equal the same salary as 40 hours worked at a normal rate, plus 4 hours worked at double rate, and one hour worked at time and a half rate).

The number of hours differ

  • Was the employee paid for the right quantity of hours? If applicable, modify the number of hours worked in the Enter Hours option. Furthermore, if the employee was paid too much, the number of hours will be greater in the Payroll section of the report. It is therefore necessary to correct that pay cheque (click HERE to access the How To - Standard Payroll Cancellation Prodecure). If, on the contrary, the number of hours worked displayed on the report is less than the amount displayed in the Payroll section, some hours are missing and it is necessary to create a second cheque. Make sure to correctly modify the hours worked in the Enter Hours option for this second cheque.

No value is displayed under the Bonus, VacPay, and Expense columns of the Project section, but values are displayed in the corresponding columns of the Payroll section.

  • Validate bonus entries in the Enter Hours option.

No value is displayed under the Bonus, VacPay, and Expense columns of the Payroll section, but values are displayed in the corresponding columns of the Project section

  • Validate bonus entries in the Enter Hours option:
    • If the bonus is valid, pay it on another payroll, or through a second cheque.
    • If the bonus is not valid, delete it.

 

Verification Elements When the Ins: PROJECT-Activity Tag Appears Under the Employee's Name (2nd Scenario)

Potential Solutions / Explanations

  • Hours are probably entered by default in the Employee Management option and a project-activity-groupe (PAG) is probably missing in the Project Time tab. Furthermore, if there are no project hours entered, in addition to a missing PAG and default hours entered in Employee Management, the Invalid Project or Vacation Bonus message will appear and the Err box will be checked.
  • Was an employee temporarily laid off? Are amounts still being deduced?
  • Is a project-activity-group (PAG) missing in the Project Time tab? If so, perform the payroll reconciliation once again, after having entered all information.

 

Errors in the Payroll Reconciliation Report

 

maestro* > Time Management > Project Time > Accounting > Payroll Reconciliation Report

The payroll reconciliation report validates if the Accrued Salaries and Accrued Fringe Benefits accounts reverse each other. Furthermore, it can be generated as a summary or in a detailed format which enables users to see the calculation made for each employee.

 

The payroll reconciliation report, just as the payroll reconciliation, should be validated every payroll; some discrepancies could appear in the payroll reconciliation report that do not appear in the payroll reconciliation.

 

Two error scenarios are also possible once the payroll reconciliation report has been generated:

  1. Discrepancies can be observed between the project's and payroll's Accrued Salaries and Accrued Fringe Benefits accounts.
  2. The amounts in the project and payroll accounts do not match, due to tax recovery.

 

Verification Elements When There are Discrepancies Between the Project's and Payroll's Salary and Reconciliation Accounts (3rd Scenario)

To find the discrepancy's source:

  1. Determine the employees for which there is a discrepancy between the amounts in the Accrued Salaries and Accrued Fringe Benefits accounts (the detailed format of the payroll reconciliation report, for the period where discrepancies are visible, can help you).
  2. Validate each employee's information to find those which display differences. It can be a single employee, but it can also be a whole employee catagory.
  3. Once the employee or employees have been identified, select one to further search for the source of the problem. Check the Employee Management option's configurations, the trade category, configured bonuses, bonuses added in the Enter Hours option, etc.

 

Setting Up and Applying Premium Types

In maestro*, the premiums can be:

  • Set by default; usually for employee management and work or trade category. When configured as such, premiums are automatically added in every payroll, based on their nature and particularities.
  • Manually added when entering hours, or from completing a timesheet or work order in maestro*MOBILE.

The following table illustrates, for the most common premium types, whether they must be configured by default or manually entered in the Enter Hours option when the payroll is done in balanced mode, as well as the general ledger where the said premium should be accounted for.

 

Premium Type

 

General Ledger Account

Configured by default

Entered in the "Enter Hours" option

  • Income
  • Bonus
  • Annual Bonus
  • Commission

N/A

Accrued Salaries

  • Expense reimbursement

N/A

Accrued Expenses

NOTE: During payroll reconciliation, the accrued expense will be reversed on the date of the cheque, and not on the last day of the payroll period.

  • Taxable Vacation Time
  • Non-taxable Vacation Time

N/A

Accrued Vacation Time

NOTE: To configure a vacation premium, please view the How To titled Payment of Vacation Days Funded by Fringe Benefits.
  • Premium

Accrued Fringe Benefits

NOTE: During payroll calculation, the amounts are included in the fringe benefits and are transferred to the project during payroll reconciliation.

Accrued Salaries

NOTE: During payroll reconciliation, the accrued salary will be reversed on the last day of the payroll period.

 

Verification Elements When the Project's and Payroll's Account Amounts do not Match, Due to Tax Recovery (4th Scenario)

Possible Solutions / Explanations

  • A premium could have been configured with tax codes. For example, if the security equipment premium is set with a tax code, a discrepancy will appear between the Accrued Salaries and Accrued Fringe Benefits accounts. For most premiums, tax codes must not appear in both Tax Code and Project Tax Code fields, of the Define Earning/Deduction Codes option.

 

See Also

For more information, we invite you to contact the Software Support team by phone at 1-877-833-1897 or by email at support@maestro.ca.

 

Last modification: September 20, 2024