MIP Ideas Portal

Month-end Payroll Accrual

Part of our monthly closeout process includes posting a reversing entry to accrue salaries and other payroll expenses incurred but not yet paid. Historically, we did this by estimating this accrual based on the previous payroll. Because many of our employees charge multiple cost centers and there is a large week-to-week variance in what is charged, our estimate was rough at best. (note, we use EWS/HR Management for timekeeping). Just recently, we discovered a handy work around to this:  First, staff are required to have all of their time in and approved through the end of the previous month by a cutoff date (generally the 5th) regardless of the normal payroll flow. ***This step is hyper-critical for high accuracy***  Once all time is in and the cutoff has passed, we backup our live database and than upload the backup to our training database. We then run a "mock" payroll through our training database all the way through the transfer to accounting. We then pull an expanded general ledger report filtering in PRS entries only  using the effective date of the mock payroll with the content tab set up with the appropriate segment codes.  Finally, we export this report into excel, create a pivot table, and use the data to create a reversing journal entry in the live database. This sounds like a cumbersome process, but not only is our payroll accrual over 99% accurate, but we actually save time over our old process which was probably less than 75% accurate.

It would be REALLY nice if there was a feature in the payroll module that allowed us to go through the same process as noted above, all within the live database. Having such a feature would eliminate the need to backup, upload, export to excel and then create a manual journal entry as the transfer to accounting would perform this automatically. Of course, there would need to be a way to bypass the issue checks/vouchers portion of the payroll process and also to distinguish this from the normal payroll process.

Such a feature would benefit any organization that included employees that charge multiple cost centers and that are required to have monthly financial statements that comply with GAAP.

  • Guest
  • Mar 6 2018
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