QB and payroll liability to state

I take it from the lack of response that it is not possible to "re-post" payroll? And I guess this means that the only way to bring the state tax liability account (along with the associated reports) to its correct value is to delete and re-enter all the payroll checks?

Wow. If that's truly the case, my opinion of QB just went down the tubes. It would seem to me that one way to determine the "quality" of an accounting package would be to evaluate the ease (or lack thereof) whereby data entry errors can be corrected. I would think a package that forces users to delete entirely the original data and re-enter everything from scratch...well, is simply not very well thought out.

~d. jettster

I take it from the lack of response that it is not possible to "re-post" payroll? And I guess this means that the only way to bring the state tax liability account (along with the associated reports) to its correct value is to delete and re-enter all the payroll checks?

Wow. If that's truly the case, my opinion of QB just went down the tubes. It would seem to me that one way to determine the "quality" of an accounting package would be to evaluate the ease (or lack thereof) whereby data entry errors can be corrected. I would think a package that forces users to delete entirely the original data and re-enter everything from scratch...well, is simply not very well thought out.

~d. jettster

Actually, you can fix this without deleting / re-entering all the paychecks. You should make YTD adjustments for each of the employees and this will correct your liability account simultaneously.

Are you talking about journal entries? Or is there a step within the payroll module? Keep in mind, the gross amounts paid to employees is correct, so I'm not sure I understand what adjustment I should be making.

Thanks for the response.

~d. jettster

I don't believe there is any bookkeeping or payroll software that will respond in the way that you describe.

Nor will most programs allow you to either delete or change previously-entered data. QuickBooks is, in fact, one of the very few that will do this and is accordingly one of the very easiest programs in which to correct errors. By your criterion, QB is a very "high quality" program; however some accountants hold exactly the opposite opinion - that accounting software should NOT make it so easy to delete or change entered data.

In any case, QB and other bookkeeping and payroll software do provide methods of correcting errors. Look in the program's Help for "adjusting payroll".

From the situation you describe it would appear that incorrect amounts have been deducted from employees. Your proposed solution would not correct this error, so it's just as well that it wouldn't work.

correct

"re-post"

state tax

Have you searched the Help for "adjusting payroll"? Yes, there is a procedure. No, it's not a journal entry.

If the gross amounts are correct but the tax rates are wrong, then the net amounts paid to employees are wrong. If you don't understand what adjustments are required, I suggest you consult your accountant or a QuickBooks Advisor.

Thank you for responding to my question.

EasyAcct will. Creative Solutions payroll module will.

Not at all. Perhaps I was unclear? No amount is deducted from a paycheck for state unemployment, as it is an expense to the employer. In QB, the user identifies the state and inputs the applicable tax rate as a Payroll Item ("State Unemployment Tax"). When a payroll check is calculated, an amount for this liability is credited to "State Unemployment Tax Payable" with a corresponding debit to Payroll Taxes Expense.

If a user has entered the the incorrect tax rate, it in no way affects the employee's net check, but it obviously *does* affect the amount that is accrued. I know for a fact that in the other software programs I mentioned, it would be a simple matter of updating the tax rate to the correct amount, and then "re-posting" the payroll periods. And then the liability & expense accounts would be correct. My question is whether or not I can do something similar in QB.

Again, I appreciate your response.

~d. jettster

I had tried various fruitless searches using other terms (mainly including unemployment liability), but I will try "adjusting payroll" now. Thanks!

You've probably already read this in my othe post, but my issue is with the rate for state unemployment taxes, which in no way affects the net paycheck (like FUTA).

Thanks.

~d. jettster

QB and Peachtree won't. I suspect that many others don't either. Once a paycheck is posted it will not be automatically updated. You CAN go in and correct the check if you need to.

The answer is no. You will have to go into each paycheck and manually correct the check for the missing info.

Sorry, as taxes vary from state to state and country to country it was not clear to me that your issue does not affect employee deductions, nor am I familiar with the programs you mention as they are not available in Canada to the best of my knowledge.

Any way, I think you have the answers now:

- QB does not have a correcting function such as you describe.

- QB does have a function to adjust payroll liabilities. In Canada this requires that you calculate the amount of the correction, QB will not do it automatically; similar adjustments would be handled in the same way in other software that I am familiar with. I won't discuss the specifics as it is likely that there may be differences between QB Canada and QB US editions. I assume this is discussed in Help in your software, as it is in the Canadian edition.

calculated, an

affects the

Thanks for replying, Laura. There's no way I'm re-entering a quarter's worth of payroll checks just to isolate what is a relatively easy liability to compute (tax rate * wages up to $9,000 threshhold). Looks like I'm going to be tracking SUTA manually, with monthly journal entries to correct the liability and expense accounts. It's not as if I haven't done that before, so although I was hoping for a simpler solution that would maintain the integrity of my "Employee State Taxes Detail" report, it's certainly not the end of the world. :-)

Thanks again.

~d. jettster

Are you saying you must correct your previous months' reports? I don't know US taxes so maybe that's the case, but you certainly need not track future reports manually. In Canada we would make a single one-time year-to-date adjustment, and all future reports would be correct. I know this is explained in QB Canada "Help", so I assume it's also in the US version.

quarter's

correct the

I would manually calculate the ytd amount for each of the employees and correct the last paycheck issued. That would be only 1 check to be edited per employee. Going forward the paychecks will be correctly calculated so there won't be any need for JE in the future. And as long as your have paid the correct amount to the state each quarter then doing a one time correction/fix will only mess up the 1Q & 2Q'05. I would make sure that July's checks are calculating the amount correctly so that 3Q is not impacted. Hopefully, the number of employees impacted in July is small to minimized your editing efforts.

In my case it was only 3 employees but I did have to correct January and February paychecks and I did each one.

1. Compute Payroll subject to bad tax = (Current State Unemployment Tax Total) / (old, bad rate)
2. Compute Proper Unemployment Tax Total = (Payroll subject to bad tax) x (new, correct rate)
3. Compute Adjustment = Current State Unemployment Tax Total - Proper Unemployment Tax Total
4. Make journal entry

Or, you could just ignore the whole problem for now and sort it out at year's end.

Actually, lack of response in newsnet normally means you made a bad post.

In your case, you failed to enter the version of the software you were using, and whether or not you were using a QB payroll service, and which QB service you were using.

Failing adequate information, most knowledgeable newsnet advisors won't bother with you.

Your question is also covered within the program. And, your desire to change a quarters worth of payroll checks is bad accounting - why would anyone want to advise you as to how to screw up your books?

To correct your payroll date (assuming you are using one of the 'lesser' QB payroll options (DIY payroll for instance) ) the steps are:

1) Correct the rate within QB (use payroll setup) 2) Run payroll checkup 3) Make the adjustments QB advises

Under no circumstances should you delete the payroll checks and re-enter. Nor should the program allow you to 're-post' and recalculate the tax liability. Did you not give your employees paystubs showing the amount the company sent to the state for them? Have you perhaps had an employee leave during the quarter? And, is it not possible you made state tax payments or reports during this time?

An adjustment is the only way to handle things at this point.

Thank you for the response, Mike. I appreciate your helping me understand how to make a "proper" inquiry in this NG, and will do so in the future.

~d. jettster

Ah, but did you appreciate the response to your question at the bottom of the post? I promise it will work, so long as you use one of the 'lesser' payroll options offered by QB (complete payroll doesn't allow you to change anything).

Oh, and to be clear, the post wasn't from Mike - just good old 'L' from the newsgroup. My comp died and I borrowed hubby's laptop to catch up with the newsgroup - and neglected to change the default outgoing mail account.

Sorry for the misrepresentation.

He also failed to mention where he's posting from (unless he includes that as part of his "version" info in his future posts), though probably everyone assumed he's in the US.

Certainly QB payroll in Canada allows you to make changes. I can't speak for other countries.

"L" wrote ...

payroll

I *did*, in fact, appreciate your suggestions, and all the others I received. :-)

Well, what I was really hoping for was a "quick fix" to the issue of the (state unemployment tax) liability and expense accounts being misstated .

As you've probably now read in my other posts, I am familiar with other software products that *will* allow you to change the SUTA or FUTA rate, and then "re-post" prior periods, with the corrected account balances "flowing through" to the current period. This would have been optimal, as it would have updated the relevant data used to create QB reports (specifically, the Employee State Taxes Detail).

I now understand (thanks to the other responders) that QB will not do this, and while I also understand that there are variouis methods to "work around" the issue, they all appear to either require an AJE (which doesn't update data for QB reports purposes), or would require that I manually calculate the correction to each and every payroll entry and perform the QB "Adjust Payroll Liabilities" process. Or I could delete and re-enter a quarter's worth of payroll.

Ultimately, while it would have been nice to have reliable QB reports, I can live without the ability to isolate a particular paycheck for a particular individual to see what QB has calculated the SUTA liability and expense amounts to be. So I'm opting to adjust the liability/expense through the current period, and QB will correctly accrue future amounts.

I won't lose any sleep over it. ;-)

~d. jettster