How to correct for underpayments or overpayments (when using Payroll Upload)
Typically, when using the payroll upload module, it's easy to reconcile payroll payments that appear on your bank statement to the corresponding payroll payments that have been created through the payroll upload process flow.
In this article:
Typical issues when trying to bank match payroll transactions
Issues typically occur when either:
- Payments have been set up incorrectly, e.g. the payroll payment showing to be paid on the payment screen is for £1000.82, but the payment setup is for £1000.28 (to avoid this error, we recommend using the 'copy' buttons within the payments page to copy the payment amount, rather than manually keying the amount into your online banking), OR
- When payments are via Direct Debit, and the wrong amount has been taken, e.g. your pensions company should have taken a pension payment for January of £840, but they instead took £820 (and later took the additional £20, either as a separate payment, or added this to the subsequent months' direct debit amount).
If this is what has happened, in order to reconcile the bank transaction against the payroll payment, you will need to split the bank transaction, and this support article explains how to do this.
Note: if the issue is that the data uploaded within the payroll upload module is incorrect (e.g. an addtition or correct has been made, but the data hasn't been updating in ExpensePlus), then you will need to delete the payroll data for that month within the payroll upload module, and re-import and process the payroll data again.
Adjusting for underpayments (when using Payroll Upload)
Example: whilst the payment amount to HMRC for the month in question should have been £2,500, the payment made to HMRC was only £2000.
When the bank transaction is within the match transactions screen, you won't be able to match it (because the amount of the bank transaction on the left-hand table and the payment on the right-hand table won't match).
Splitting the bank transaction
Before you can match the bank transaction, you will first need to split the transaction.
- Within the View Statement screen, click the edit button ('pencil' icon) to the right of the bank statement transaction
- In the Split Account Transaction screen, split the transaction into two:
- Paid Out Transaction, for the amount that should have been paid (£2,500)
- Paid In Transaction for the difference between what you should have paid and what was actually paid (£500)
Then select 'Confirm'.
Reconcile transactions
Then, within the Match Transactions screen:
- Reconcile the paid out transaction on the left-hand table to the corresponding payment on the right-hand table
- Reconcile the paid-in transaction on the left-hand table by clicking on this transaction
Then in the pop-up that appears, select the 'Supplier Refund' option and enter the relevant details.
Note: typically, it's best not to remember this particular transaction (i.e. untick the 'Remember this Transaction' box)
Good to know: if the underpayment is paid as a one-off separate payment, then you can simply process this via the regular purchase, approvals and payments process flow as you would.
If the underpayment is accounted for by making an overpayment in the subsequent month (e.g. the payment is for £500 more than it should be that month, to account for this underpayment, then see the section below for how to adjust for overpayments.
As long as the underpayment and subsequent additional payment / overpayment are recorded to the same fund/category, you won't have any issues.
Adjusting for Overpayments (when using Payroll Upload)
Example: whilst the salary payment to Stan Jenkins should have been £1020, he was accidentally paid £1080.
When the bank transaction is within the match transactions screen, you won't be able to match it (because the amount of the bank transaction on the left-hand table and the payment on the right-hand table won't match).
Splitting the bank transaction
Before you can match the bank transaction, you will first need to split the transaction.
- Within the View Statement screen, click the edit button ('pencil' icon) to the right of the bank statement transaction
- In the Split Account Transaction screen, split the transaction into two:
- Paid Out Transaction, for the amount that should have been paid (£1,020)
- Paid Out Transaction for the difference between what you should have paid and what was actually paid (£60)
Then select 'Confirm'.
Reconcile transactions
Then, within the Match Transactions screen:
- Reconcile the paid out transaction for the amount you should have paid on the left-hand table to the corresponding payment on the right-hand table
- Reconcile the paid-out transaction relating to the overpayment on the left-hand table by clicking on this transaction
Then in the pop-up that appears, select the 'Gift of Money' option and enter the relevant details.
Note: if the overpayment relates to HMRC or the Pension provider, you can also select the 'Direct Debit' or 'Invoice Payment' options (as the transaction type isn't super important).
Note: typically, it's best not to remember this particular transaction (i.e. untick the 'Remember this Transaction' box)
Good to know: if the overpayment is repaid to you, then this needs to be reconciled as an 'expense repayment' (or if it's a supplier, then a 'supplier refund').
If the overpayment is accounted for by making an underpayment in the subsequent month (e.g. the payment is for £60 less than it should be that month), then see the section above for how to adjust for underpayments.
As long as the overpayment and subsequent repayment/underpayment are recorded to the same fund/category, you won't have any issues.
To help you better understand the Payroll module, please visit the module overview page.