CENTRAL SUSQUEHANNA INTERMEDIATE UNIT Application: Payroll. Salary Accruals Step-by-step Instructions

Transcription

1 CENTRAL SUSQUEHANNA INTERMEDIATE UNIT Application: Payroll Salary Accruals Step-by-step Instructions 2013 Central Susquehanna Intermediate Unit, USA

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3 Table of Contents Introduction... 1 Accrual Basics... 2 Accrual Setup... 2 Accrual Codes Directory... 2 Employee Master/Wage Info tab... 3 Accrual Process... 4 Timing of the Accrual Process... 4 Accruals and Payroll... 4 Accruals and Fund Accounting... 5 The Accrual Process Step-by-step Central Susquehanna Intermediate Unit, USA

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5 INTRODUCTION This guide will review how to accrue salaries in June, to verify the accruals during the summer pays, and to update the fiscal year after the accrued pays are completed. In this instruction guide, you will learn how to: Set up the Accrual Code Directory. Identify employees to be included in the accrual process. Run the accrual process and verify reports. Verify reports during the payment of accrued wages. Update the fiscal year after the accrual pays are completed. Revised: 03/25/ Central Susquehanna Intermediate Unit, USA Page 1

6 ACCRUAL BASICS The salary accrual process is used to record the employer expenses related to wages and benefits in the year they are earned, rather than in the year they are paid. Then, you can correctly report retirement to PSERS in the Monthly Work Report over the summer months when payments are made. Timing of this process is critical it must be done after completing the final payroll in June and prior to processing the first payroll in July. ACCRUAL SETUP To prepare for accruals, do this step in advance. ACCRUAL CODES DIRECTORY The ACCRUAL CODES directory is used to store information for accrual groups based on the number of pays to be accrued and the range of dates those payments will be made. You can create accrual codes for different types of employees as well as for different numbers of pays. Employees receiving a different number of pays to be accrued must have an accrual code created based on the number of pays. Accrual codes are used only for salaried employees and cannot be used to pay hourly or daily wages. An option is provided if you want to accrue hourly and daily wages. Please see the separate resources available for Hourly/Daily accruals. Reuse the accrual codes from year to year, but update the date range and number of pays information for the new fiscal year. Example Code Description Start End # of Pays T Teacher Accruals 7/1 8/31 4 A Aides 7/1 7/31 2 Revised: 03/25/ Central Susquehanna Intermediate Unit, USA Page 2

7 Employee Master/Wage Info tab Use the Accrual field on the Employee Master/Wage Info tab to identify employees whose salary is to be included in the accrual process. To prepare for accruals, do this step in advance. Because the accrual codes are intended to be reused, prior to running the accrual process each year update the Accrual Codes Directory to indicate the new Start and End Dates as well as the number of pays for each group. For employees who were identified as part of an accrual one year, but the following year choose to take a lump sum payout or leave employment, remove the accrual code on their EMPLOYEE MASTER records. Make sure to verify that only employees who should be included in the accrual have an accrual code. Accruals can only be processed for employees with a Pay Flag of Pay and a Per of P on a Seq. 1 check, as shown below. Revised: 03/25/ Central Susquehanna Intermediate Unit, USA Page 3

8 ACCRUAL PROCESS Timing of the Accrual Process The accrual process cannot be done prior to completing the final payroll of June. It must, however, be completed prior to processing the first payroll in July. After the final payroll of June is complete, process the accruals one accrual code at a time. The process must be done completely for the first accrual before starting a second accrual or processing the first July payroll. After the accrued pays are completed and when new salaries should begin, use the MASS UPDATE WAGE FISCAL YEAR menu item to remove the Accrual Type reference and update the fiscal year for all accrued wages. Then, you can enter new salaries either manually or through the SALARY/WAGE DISTRIBUTION UPDATE process. Accruals and Payroll The accrual process calculates the remaining salary based on the number of pays established in the ACCRUAL CODES directory and the Annual Salary information, if available. This calculation is used to determine the remaining salary amount that will be paid to accrued employees in the next fiscal year. You can also use the BALANCE OF CONTRACT REPORT to assist you in determining each employee s accrued wage amount. After the accrual process has been completed DO NOT change salary information or deduction information that is exempt from Social Security or Medicare tax (as this affects the employer share of taxes); doing so will require manual adjustments. After an accrual has been processed, an accrual counter (behind the scenes) updates the Accrued Pays Remaining field on the EMPLOYEE MASTER/WAGE INFO tab. In addition, on the individual wage account line(s) an Accrual Type P is entered to aid in tracking wages that were accrued and (if needed) to allow accrued and regular wages to be paid on the same check. Starting with the payroll following the accrual process, each time the employee is paid the Accrued Pays Remaining number is reduced by one. When that number reaches zero, use the ADMIN FUNCTIONS > MASS UPDATES > WAGE FISCAL YEAR menu item to update the Fiscal Year on the individual wage account line(s) and to remove the Accrual Type P which allows regular payments to be made. During the payrolls that include accrued wages, the ACCOUNT DISTRIBUTION reports display accrued salary wages with # symbol and the prior fiscal year code. These records will not create an expense in the new fiscal year. After accrued wages have been paid and the Wage Fiscal Year has been updated, # symbols and prior fiscal years should no longer display on the ACCOUNT DISTRIBUTION reports. If they do, a problem exists that needs to be addressed immediately. Restore the payroll and use the MASS UPDATES > WAGE FISCAL YEAR menu item to correct the wage records. Because accrual information is stored in temporary tables created in the user s directory, the user who processes the accruals must also transfer the Accrual Distribution to Fund Accounting. Revised: 03/25/ Central Susquehanna Intermediate Unit, USA Page 4

9 Accruals and Fund Accounting When you transfer accrued wages to Fund Accounting, the distribution reports will show the amounts encumbered as of the June date used during accrual processing. The balance sheet will reflect these amounts as salary and benefit costs payable in a subsequent accounting period for the employer. The amounts are then relieved as the wages are paid in July and August. During the summer pays, the information being transferred to Fund Accounting for accrued wages is different from that for wages that were not accrued. Because accrued wages were used to record the expense, payroll transfers will include accrued and expense information needed to pay the previously expensed wages. Therefore, all payable amounts should equal zero. If the payable amount is not zero, changes to wages occurred after the accrual process so correcting entries will be needed. Examples of Payroll transfer entries resulting from an accrual: Accruals posted in June will be recorded against the employee s normal expense accounts as follows: Employee s Account: Wages are $ per pay for 5 pays = $ Accrual distribution posted in June as follows: Purpose code Account Number Amount AC GROS AC RET AC SS AC WCOM AC UNEM Accruals posted in July and August are transferred as a XX-0461 account and the object substitution is handled as normal for the employer s share of the benefit amounts Accrual distribution posted in July and August for five payrolls: Purpose code Account Number Amount AC GROS AC RET AC SS AC WCOM AC UNEM Revised: 03/25/ Central Susquehanna Intermediate Unit, USA Page 5

10 THE ACCRUAL PROCESS STEP-BY-STEP 1. Set up the Accrual Codes Directory. Attach codes to employee records Do this step in advance to prepare records for the accruals. 2. On the Employee Master/Wage Info records, select an Accrual code. 3. If changes to Employee Master/Vol. Deductions are needed for the summer pays, make those changes PRIOR to processing the accruals. 4. AFTER the final payroll in June has been processed, select the PROCESS PAYROLL > SALARY ACCRUALS > SUBMIT ACCRUAL PROCESS and add a new record. Do not attempt to update an existing Accrual Calculation Parameters record. 5. Enter an Accrual Date. To allow for proper processing and posting to Fund Accounting, the date entered must be in June, but NOT the same date as a regular payroll date. If possible, the date should follow the last payroll in June. If processing more than one accrual, use different dates for each. 6. Select the appropriate Accrual Code based on the group you wish to process and complete first. You must verify and transfer this accrual to Fund Accounting, PRIOR to processing another accrual. 7. Enter the Pay of Month information for calculating voluntary deductions. These entries affect the employer s share of Social Security and Medicare tax. Revised: 03/25/ Central Susquehanna Intermediate Unit, USA Page 6

11 8. Select additional Payment Types, if applicable. Payment Types S, AP, and IP can be included in this process if payments will be made for the same number of pays as the salary. Entry of one unit is required in PAYROLL ENTRY for these amounts to be processed. If the S, AP, and/or IP payment types are not to be calculated for the same number of pays as the salary, they should not be included in this process but instead with the Hourly/Daily accruals option. Please refer to Hourly/Daily accruals for more information. If you want to accrue Group Term Life, on the accrual parameters you must enter the number of times the G payment type is to be included. 9. Click the Calculate button to process the accrual. The process includes all employee records that meet the following criteria: The Pay Flag = P Pay The Accrual Code in the parameters matches the accrual code on the employee s record. The employee has a Payment Type of P with a Seq. 1 An EMPLOYER PARAMETERS/RATES record for the new fiscal year has been entered if not, a message will be displayed and processing will not continue. If this happens, add a new Rates record for the new fiscal year, return to the SUBMIT ACCRUAL PROCESS, and click the Calculate button. 10. Print reports and verify information The Accrual reports must be reviewed to verify information. The BALANCE OF CONTRACT report can be used to assist you in this review process with the By Employee report, although any of the accrual reports can be used to assist you in verifying accrual information. It is best to wait to Transfer the accruals until after the reports have been reviewed and any needed changes have been made. After the review is completed, print a final copy of each of the reports. 11. If amounts were not correct or if employees were missed, update records and reprocess. If amounts were not correct, verify Annual Salary information and update as needed then reprocess. If employees were missed, add the Accrual Code to their Employee Master records and reprocess. If employees were included that should not have been, remove the Accrual Code from their Employee Master records and reprocess. Revised: 03/25/ Central Susquehanna Intermediate Unit, USA Page 7

12 12. When all information has been processed correctly and final reports have been printed, transfer the accrual to Fund Accounting using the Accrual Distribution Transfer option. Be sure to print and keep all accrual reports. You may want to print additional copies to share with Fund Accounting staff and/or auditors. Before processing a second accrual, you must print reports and complete the transfer, or else a Payroll occurs as accrual reports and the transfer cannot be regenerated later. To ensure all steps were properly completed, verify that accrual reports were printed and the transfer to Fund Accounting was completed. Then have Fund Accounting post the accruals. 13. If needed, process the next accrual using the same steps. If no accruals remain to be processed, prepare for the first payroll of July. Update Salary information for non-accrued salaries. For more information on updating salaries, refer to the resources available in the Fiscal End section of the OSC for Updating Salary and Rate Information. 14. Update the DIRECTORIES > EMPLOYER PARAMETERS Current fiscal year identifier. Revised: 03/25/ Central Susquehanna Intermediate Unit, USA Page 8

13 This identifier is used to validate account codes and to default the fiscal year when new wage account records are added. Accrued wages with a P in the Accrual Type field will not be updated to the new fiscal year but will remain in the old fiscal year to allow for correct PSERS reporting. All other wage account records will be updated to the new fiscal year automatically. Move forward with the July payroll. 15. Verify accrual information provided on the Account Distribution reports in July and August. The Payroll application s Account Distribution reports provide fiscal year information for PSERS and Accrual Totals. Review and verify this information. Each Payroll will only reflect one payment of the accrued wages at a time. The Accrued Totals should coincide with the number of Pays that were accrued. In this example ¼ of the total accruals within pennies is the amount expected. If hourly/daily accruals are also included in the payroll, add them to the salary accrual expected amount. Revised: 03/25/ Central Susquehanna Intermediate Unit, USA Page 9

14 16. After payment of accrued wages has been completed, update account records to prepare for the new fiscal year. Using the MASS UPDATE > WAGE FISCAL YEAR process is necessary to remove the accrual identifier P that was placed on each wage account record during the Accrual process and to update the fiscal year for PSERS reporting. 17. Update Salary information for 10-month employees. Use the ADMIN FUNCTIONS > SALARY/WAGE DISTRIBUTION UPDATE process to mass update Salary and Rate information for all employees who have not yet had the new salary or hourly rate information entered. For more information on updating salaries, refer to the resources available in the Fiscal End section of the OSC for Updating Salary and Rate Information. Revised: 03/25/ Central Susquehanna Intermediate Unit, USA Page 10