Oops! Payroll is Posted to the Wrong Accounting Period….

Pay dates on or shortly after the beginning of a month can present a challenge.  Too often, I get calls from clients that posted an entire payroll dated on the first of a month back to the previous month, usually because they fail to check the rather small accounting period button on the 5-2-6 Post Payroll to GL screen before pushing the Post Payroll button.  Despite regular admonishment to always post payroll to the period in which the checks are dated, mistakes happen.  How do we fix them?

If the payroll was posted in detail (rather than in Summary) and the number of payroll records is not too great, I usually recommend a “copy, void, paste” process:

• First, print out a payroll check register for the misposted payroll.  
• Then, for each misposted 5-2-2 payroll record:
• Click on the copy button to save the header and timecard data to a program copy buffer
• Go to the calculations tab, highlight all the rows of the calculations grid, right click and select copy to save the calculations lines to the Windows clipboard (as the save button does not capture the calculations grid)
• Click on the scissors button to void the misposted payroll record and say yes to void the related job cost and ledger transaction records
• When the empty record is displayed after the voiding, click on the paste button to paste record header and timecard lines to a new record
• Click on the calculations tab and with the cursor in the top left cell of that grid, right click and select Paste to copy the calculations from the Windows clipboard, and enter “Y” in the Override column for each line so that nothing changes from the original record
• Save this new record and locate the next record to correct.
• When each payroll record has been corrected, trial compute the copied and pasted records, compare the records to the original payroll check register, and if everything agrees, final compute the payroll records and carefully post these new records to the general ledger in the correct accounting period.

It’s been suggested that I’m a cruel person to suggest such a tedious task, but there is the sneaking suspicion that such painful work to correct a problem may help that person pay better attention the next time.

If the payroll has too many records to make this a reasonable exercise, we can help you with queries and MS Excel to summarize the general ledger and job cost entries of the misposted payroll to use in a journal entry to reverse the entire payroll from the wrong accounting period and reenter it in the correct accounting period. Just give us a call at 480-471-5305 for assistance.

How to Replace a Check Written in a Prior Period

I have recently received several inquiries about how to replace a lost payroll or vendor check written in a prior period without affecting the previously reported financial statements or tax reports.  If all you need to do is replace a previously written check with a new check to the same payee and for the same amount, follow these simple steps:

• In menu 1-1 Checks/Bank Charges, record a reversal of the original check by entering the original bank account, the original check number followed by the word “Void”, the current date, a description like “Void & replace lost check”, the payee name and address (or just enter the vendor number), and in the grid enter a clearing account and the net check amount as a NEGATIVE amount in the Debit Amount column. Save this entry to the current accounting period.
• Then, also in menu 1-1, record the replacement check by entering the bank account you are drawing the replacement check on, “0000” in the check number field, the current date, a description like “Replace original check number…”, the payee name and address (or the vendor number if it was used in the reversal above), and in the grid enter the same clearing account and the original net check amount as a POSITIVE amount in the Debit Amount column. Save this entry to the current accounting period also.
• Then, also in menu 1-1, click on the print button, enter the cash account for the replacement check, and print the replacement check on your check stock following the usual 1-1 check printing process.
• When next reconciling your bank account, clear the voided check and the original check, as they will offset. 

By using offsetting entries in the same accounting period, you don’t affect your accounting and tax reports.  Using the vendor number in both the reversing and replacement entries ensures that the 1099 balances are not misstated as well.

If you want additional guidance on this process, or more complex situations, give us a call at 480-471-5305.

Equipment Management (a nearly forgotten module)

How often does an owner or manager ask his accountant (or him- or her-self) “how much does that truck or piece of equipment cost us?” How often is the response to this question “we don’t know!?" Is your investment in heavy equipment, shop equipment, or vehicles a significant cost of your operation? Is the cost of owning and operating this equipment being consistently and accurately charged to jobs based on a measure of use, like miles, tons, hours, days, weeks or months? Are you recovering enough equipment ownership and operating costs in your job costing and estimating assumptions?

The Equipment Management module is designed specifically to collect and organize the cost of owning and operating equipment, and then recover that cost by charging out to jobs the estimated cost of owning and operating that equipment using estimated cost recovery rates per measure of use (i.e. per mile, per hour, per day, etc.) With the module, a thoughtful and creative implementation, and diligent bookkeeping, users no longer have to hear the answer “we don’t know!”

If you want to learn more about using the Equipment Module, give us a call at 480-471-5305.

Current Version Information

On February 18, 2016, Sage released Sage 100 Contractor Version 19.7.52.  This update includes all payroll tax table revisions known to date, and more importantly, fixes a problem created in version 19.7.43 with the Reconcile Credit Card Statement function.  I strongly encourage users to consider installing this update.

Current Version Information

Sage released the first 2016 Payroll Tax Table update on December 17, 2015. Version 19.7.28 contains all federal and state payroll tax table data available as of that date that are effective in 2016. It also contains a few enhancements and fixes related to payroll processing.

On January 21, 2016, Sage released the January 2016 payroll tax update, Version 19.7.43.  It contains revised payroll tax tables for states that were late in publishing their 2016 tax tables, including Maryland, Massachusetts, Missouri, North Carolina, North Dakota, Oregon, Rhode Island, Vermont and the District of Columbia. It also includes a few more enhancements and fixes related to payroll processing.  However, Sage has since advised that this update has caused a problem with the Reconcile Credit Card Statement process.  If you have payroll in the affected states, you should consider installing Version 19.7.43 so that your payroll tax withholding is correct, knowing that you may have challenges with your credit card reconciliations.  Otherwise, defer installing this latest version until Sage publishes a revision or later update.

How Do You Know What You Don’t Know?

One of my favorite clients sent me an email this morning that asked for my assistance with the following:

“One of my goals is to find out from you what is in [Sage 100 Contractor] that we can use for more effective results for this next year.  I don’t know what I don’t know.  I am familiar with what I use all the time but I believe there is more available that I am not aware of.  We will experience great growth this year.  We will be hiring additional staff but I want to make sure we are effective and efficient with the tools we have in hand to maximize our results.”

This client has used the program for decades and might be described as a “power user,” but she has a nagging suspicion that there may be more functionality in the program than what they are currently using.  This is a pervasive problem with many of the users that I come across.  This is often understandable since initial implementations are often geared toward getting a new user up and running with the basic accounting capabilities they had with their previous accounting package. Too little time and attention is devoted to identifying and learning new functions that can benefit their organization.

How did I respond to my client’s request for assistance? My reply included the following:

“There are a couple of ways to assess the "not knowing what you don't know" problem.  I could spend a day nosing around your office, observing and asking questions to try to identify areas that can be improved.  Or you and your staff (accounting and project management) can make lists of things that annoy them, things that they spend valuable time doing in Excel or Word, things they wish they had, things they suspect the program should do but they just don't know how to do, etc. The lists can be compiled and sorted and a [training] plan can be developed.”

Many clients have purchased modules of the program and then left those modules unused for years! I often see Estimating, Document Control, Equipment Management, Scheduling, Change Orders (!), Insurance Certificates (!), Credit Card Management, ACH/Direct Deposit Payroll and Vendor Payments, and similar modules forgotten and unused, or perhaps just underused.  Wise clients will take a little time to scan through the program menus just to remind themselves in general sense of what the program can do, and then call us to ask if it might be of use to them.

Clients are always calling with requests for a report that shows certain information that they need to run their business.  Often the report already exists in the program and we can point them in the right direction and give them pointers on how to use report selection criteria to hone in on their specific need. If a report doesn’t already exist, we can usually create a custom report to meet their need.

If you wonder what you don’t know, take the time to jot down notes about those things that annoy you about how you use the program, what tasks or reports you spend too much time preparing with Excel or Word, what things you wish the program could do for you, or what data you want from the system that you currently aren’t receiving.  Then give us a call and talk it over with us.  It may cost you some consulting fees, but the end result is usually well worth the investment.