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1mwilk
January 13, 2024
Question

Manual Checks duplicating in journal entries.

  • January 13, 2024
  • 2 replies
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We occasionally have to write manual checks for payroll. For example, an employee is terminated in the middle of a pay period. We use a third party payroll company. The tell us what the employee is owed and we give them the number of the manual check we are creating. When the payroll for the pay period is received, the payment is now duplicated because we have the manual check number both for the original check we wrote and the payroll journal entry. How do we stop this from happening? We have to create a manual check to pay the terminated employee and the payroll company is recording the same information. When we go to reconcile our bank account, the payment to the employee is duplicated. It appears because of the manual check and in the journal entry that is created for payroll. This impacts our operating bank balance because payment to the employee is recorded twice. How do we prevent this from happening?

2 replies

F
FateCandylaneT
January 13, 2024

I can see how crucial handling duplicate paychecks is for terminated employees in your account, 1mwilk. Being able to correct these imbalances speeds up your workflow in QBO. I've got information to help you manage this entry.

 

If your third-party payroll services are linked to your QuickBooks Online company account and you haven't processed your overall payroll yet, you may consider deleting the manually created checks. Then, import the paycheck data entered from your payroll company directly to your QuickBooks file. This removes the checks from your payroll and withholds the balances when reconciling your financials.

 

However, if they aren't connected to your online account, it's best to review them further and reach out to your accounting professional to provide you with proper guidance. You may also check out this guide for additional insights: Manually enter payroll paychecks in QuickBooks Online.

 

In addition to that, you can start reconciling your financial data to make sure all transactions entered are accurate and balanced.

 

In case you encounter issues in the middle of your reconciliation, you can check out this article for more guidance on what you should review: Fix issues at the end of a reconciliation in QuickBooks Online.

 

I'll be delighted to have you back in this thread if there's anything else you need assistance with. Just keep me posted in the comments below, so I can provide additional help. Stay safe and have a good one!

Rainflurry
Rainflurry
January 14, 2024

@1mwilk 

 

"How do we prevent this from happening?"

 

The issue is that your process is duplicating the entry.  The only way to prevent it is to stop writing a check to the terminated employee, which I'm guessing is not an option.  IMO, the best option is to change the journal entry that you receive from your payroll company to remove the duplicate effect of the check.  When you write the check to the employee, what account do you assign to the check?  Wages?  Whatever account that is, reduce it by the amount of the check on the debit entry of the payroll journal entry.  Then, reduce the credit entry to the bank account, by the same amount.  That will reduce the net pay on the journal entry to match the direct deposit withdrawal amount and reduce the wage expense which was increased when you wrote the check.  You can now reconcile both the check and the direct deposit withdrawal while keeping the payroll expenses, accruals, and withholding accurate.     

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