Back Pay
I had to backpay 6 staff for 4 pay periods. I did it the same way as I always have which is change the rate of pay then reverse the old pay and then redo it with the correct payrate. Obviously this was the wrong way as now I have an amount in my payroll clearing account and my bank reconciliation does not work.
Should I go back and back and reverse everthing and redo as a back pay as set out by MYOB or can I do a journal entry that will clear out payroll clearing and hopefully fix the bank rec?
Any thoughts??
Regards
Ellen
Hi Ellen
When you reverse a transaction an exact copy of the original transaction is recorded, just with the positive amounts as negatives. The Pay from account remains the same, if that was the payroll clearing account the original transaction and the reversal clear each other out so you wouldn't need to do anything for those transactions.
If you did want to move them out of the payroll clearing account you need to do a transfer money for each pay transaction. So you'd do a Transfer money with the From account as the bank account and the To account as the payroll clearing account for the original pay transaction. And another one with the From account as the payroll clearing account and the To account as the bank account.
The payroll clearing account will have two debits and two credits all for the net amount which clear each other out. The bank account will have one debit and one credit for the same amount, tick both in the Reconcile accounts window to manually reconcile.
When you reprocess the pay with the correct amount you would need to record a Transfer money transaction for the new net amount. When recording a Transfer money transaction the From account is always the account the payment is being withdrawn from. So in this situation the From account is the bank account and the To account is the payroll clearing account.
Only the net amount is posted to the account selected in Pay from account as this is the amount being paid to the employee. PAYG and super are posted to the liability payable accounts.
What you should end up with in the Reconcile accounts window for the bank account are the original net amount and the reversed net amount which clear each other out. And the new net amount which should equal the two bank feed transactions. In the Bank feeds window hide the two bank feed transactions, in the Reconcile accounts window tick the net pay transaction.
If you're still having problems with this please send me screenshots of the original pay transaction, the reversal and the new pay transaction by private message.
Please let me know how you go.
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