The payroll register collects information from payroll items to determine how much should be paid to each payroll vendor. This data is summarized on the Payroll Liabilities page However, sometimes the amount may not match the bill you have received.
Handling rounding differences
Handling other errors
Handling rounding differences
A common cause of small differences between SchoolInsight Financials' liabilities and certain vendors (particularly state retirement systems like TRS, IMRF, PSRS, and PEERS) is rounding calculations.
These differences typically occur on percentage algorithms because SchoolInsight looks at each employee individually when figuring a percentage, but the vendor may look at the lump sum of all employees’ wages.
For example, let’s say employees owe 9% of their gross wages for a particular payroll item.
- If Employee A’s gross wages are $1,226.50, she should owe $110.39.
- If Employee B’s gross wages are $894.06, he should owe $80.47.
Adding the results together, SchoolInsight Financials would predict that the district needs to send $190.86. However, if the vendor looks at the cumulative gross wages of $2,120.56, then they would say that 9% is $190.85.
This difference of $0.01 is normal, and there’s no way to prevent it from occurring. In most cases, the vendor will accept a payment that is a few pennies off. If that’s the case, the easiest thing is to send the vendor the payment that SchoolInsight Financials, so that the liabilities on your balance sheet will zero out.
If the vendor demands an exact payment, then you should make sure to record the EXACT payment made to the vendor, by checking the “Use Custom Amount” box and adjusting the value of one of the liability accounts. This will result in a non-zero balance, but it’s important to accurately record
Handling other errors
Other errors that are due to more than rounding require more investigation. It’s likely that an employee’s payroll items were not set up correctly. The possible mistakes are too varied to cover in one article.
A good place to start in identifying the problem is to run the saved report titled Liabilities by Vendor, which is a default report at all districts. This report will at least show how the Current Liabilities column was calculated.
Once you have discovered the source of the problem, read Fixing payroll errors to figure out the solution that is appropriate for the situation.
The typical solutions will be either:
- Make a custom payment to record what was really paid. On a future run, adjust the amount of an employee payroll item so that the liability ends up zeroing out.
- Common example: You forgot to add an employee’s new $100 insurance withholding. SchoolInsight says you owe $900, but the vendor billed you $1000. You can make a $1000 custom payment now, leaving you with a balance of -$100. On the next run, withhold $200 from the employee’s check, bringing current liabilities to $1100. Combined with the previous balance of -$100, the balance of $1000 will match what should be billed next month.
- Skip the liability, create an adjustment payroll run, and then make the payment on the adjustment run.
- Common example: You forgot to add a state retirement system item to a new employee. Skip the liability, then create an adjustment run with the item added. The adjustment run’s current liabilities will be added to the previous balance, creating the correct balance, which you can pay without using a custom amount.