How to reconcile payroll payments where the wrong amount was paid?
This help-guide article covers how to avoid payroll payment errors, and how to reconcile payroll transactions if they happen.
Avoiding Payroll Payment Errors
The payroll upload process within ExpensePlus provides a brilliant and streamlined process flow for processing payroll payments. Rather than processing payroll approval and payments outside of ExpensePlus, you can simply upload payroll data and the payroll upload module will automatically generate the required payroll payments for you, which then get processed through the same process flow as your expense payments, invoice payments and other payments.
Here are the steps to follow:
- Upload your payroll data (within the Payroll Upload module)
- Create Payroll Transactions (within the Payroll Upload module)
- Upload your P30 document to the HMRC transaction (within the receipts module) - this step can be skipped if you pay HMRC by direct debit, and the system setting for direct debit receipts is set to 'optional'
- Approve payroll transactions (within the approvals module) - this step will be skipped if approvals for payroll transactions are set to 'not required' within your system settings
- Set up payments and mark these as paid (within the payments module) - this step is skipped for any payments made via Direct Debit, as no payment is needed
- Upload Bank Statements and reconcile payroll transactions
Hint: If you follow these steps, then in Step 5 the one-click copy feature within the payment screen means that the payment amount you set up within your online banking for each payroll payment will match the payment amount that needs to be paid (avoiding any data entry issues)
Salary Overpayments
If the amount paid from the bank account (left-hand table of the bank matching screen) is MORE than the amount that should have been paid (based on the payroll data uploaded to ExpensePlus), then you won't be able to reconcile the payroll transaction.
In this example, the payment made was £1040.00, £10 more than the salary payment that should have been paid (£1030.00).
To resolve this issue, you will need to:
Delete the bank statement transaction
Within the View Statement screen, click the 'delete' button to the right of the bank statement transaction (£1040.00)
Manually upload two transactions in it's place
Manually upload two transactions in place of the deleted transaction (both dated the same date as the deleted transaction)
- Paid Out Transaction for the amount that should have been paid (£1030.00)
- Paid Out Transaction for the overpayment amount (£10.00)
IMPORTANT: Check your bank balances displayed within ExpensePlus is still correct (if you do this correctly, it shouldn't have changed!)
Reconcile Transactions
a. Reconcile the paid-out transaction for £1030.00 against the salary payment
b. Reconcile the paid-out transaction for £10.00 as a 'gift payment', by clicking on the transaction on the left-hand table, then in the popup that appears entering the details as shown below.
Reconcile the overpayment that is repaid
When the additional payment (£10.00) is repaid back to your organisation and appears on your bank statement...
Reconcile this as an 'expense repayment' to the same fund/category as you reconciled the gift of money in step 3b.
Note: Instead of requesting the money is paid back to your organisation, if instead, you plan to simply deduct the amount from a future payment to the individual, then you should go ahead and enter a 'Gift of Money' on the purchases screen for the amount that is owed back - entered as a negative. Leave this purchase on the payments screen until a future payment is made to this individual, at which point deduct the amount from the payment you would otherwise pay them and mark the payment as paid.
Salary Underpayments
If the amount paid from the bank account (left-hand table of the bank matching screen) is LESS than the amount that should have been paid (based on the payroll data uploaded to ExpensePlus), then you won't be able to reconcile the payroll transaction.
In this example, the payment made was £1020.00, £10 less than the salary payment that should have been paid (£1030.00).
To resolve this issue, you will need to:
Delete the bank statement transaction
Within the View Statement screen, click the 'delete' button to the right of the bank statement transaction (£1020.00)
Manually upload two transactions in it's place
Manually upload two transactions in place of the deleted transaction (both dated the same date as the deleted transaction)
- Paid Out Transaction for the amount that should have been paid (£1030.00)
- Paid In Transaction for the underpayment amount (£10.00)
IMPORTANT: Check your bank balances displayed within ExpensePlus is still correct (if you do this correctly, it shouldn't have changed!)
Reconcile Transactions
a. Reconcile the paid-out transaction for £1030.00 against the salary payment
b. Reconcile the paid-in transaction for £10.00 as an 'expense repayment', by clicking on the transaction on the left-hand table, then in the popup that appears entering the details as shown below.
Make the additional payment
Within your online banking, go ahead and pay the payment shortfall (£10.00)
(there is no need to enter this within ExpensePlus, as it's not a new amount, it's just making up for the amount that should have been paid previously)
Reconcile the additional payment
When the additional payment (£10.00) appears on your bank statement...
Reconcile it to the same fund/category as you reconcile the underpayment in step 3b. We'd recommend using the 'Gift of Money' option (the transaction type isn't important).
