COMPARATIVE REPORTS COMPARATIVE REPORT FOR ALL EMPLOYEES

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1 COMPARATIVE REPORTS By comparing the year-to-date figures for any two payroll periods, the comparative report program provides the necessary information to prepare quarterly reports for government requirements and reports covering any period for internal use. CR COMPARATIVE REPORT FOR ALL EMPLOYEES Prints a report similar to the Payroll Report, except the program calculates the difference in the year-to-date totals between two previously calculated pay periods. This results in the amounts paid between the two pay periods you have selected. CS COMPARATIVE REPORT FOR A SINGLE EMPLOYEE Performs the same function as #1, above, except for a single employee number only. UT UNEMPLOYMENT REPORT FOR ALL EMPLOYEES Determines the gross pay in the period selected and performs the necessary calculations for FUTA or other types of unemployment reports where income is only taxable up to a set limit.

2 FD FEDERAL 941 REPORT Summarizes payroll data for the selected quarterly period and produces a 941 Form and (optionally) a 941B Form. using a laser printer. XQ EXTENDED QUARTERLY: Optional State Reports Some states accept quarterly or annual reports (or both) on diskette or via modem. This selection provides access to any optional Magnetic Media (Diskette) or Paper State-Peculiar Reports you may have purchased. This selection also provides access to any magnetic media report listing programs included with the State reports. Additional documentation accompanies these optional reports LPI Information Systems 11-2

3 COMPARATIVE REPORTS Rather than maintaining "quarter to date" figures like some other payroll systems, the Datasmith Payroll System creates a backup copy of the employee master file every time payroll is calculated. Then, by accessing two of these files and processing their data, the system can not only produce quarterly reports, but reports for any period of time. This added flexibility is extremely useful for analyzing payroll information for internal purposes as well as for completing government reports. When the comparative reports function is chosen, the following prompts will be displayed on the console screen: Enter the date of the earlier period (0 for YTD report) Enter the date (MMDDYY) requested and press return. You are specifying the period whose year-to-date totals are to be subtracted from those in the later period in order to obtain the information for the period in question. Remember, since the program is subtracting the YTD totals of two periods, this should be the date of the payroll period just before the beginning of the time frame you want. For example, if you want a second quarter report, the earlier period would be the last period in the first quarter. If you enter zero here only one file will be accessed and a year-to-date report will be produced. (First quarter reports are simply year-to-date reports). If a date is entered, the next prompt is: Enter data path, if not xxxxxxxxxx? This prompt allows you to have data for the different periods on different diskettes or directories. If the data for the earlier period is on the default drive, just press ENTER. If the data for the earlier period is on another disk, locate it and place it in a drive other than the default drive. If you have only two drives, you may remove the program disk from drive A and replace it with the data diskette. If the data is in another directory, enter the path to the directory. Disk drive names must always end in a colon (:) and path names always end in a backslash (\). Once you have entered the earlier period or have pressed zero for a year to date report, you will see the prompt: Enter the date of the later payroll period? _ LPI Information Systems 11-3

4 Your response should be to enter the date the last period in which you are interested in the form MMDDYY, as with all dates requested by this system. This must be the same date you used when you calculated payroll for that period. The file you access must have been created by the initialization program, so you can't get a comparative report that contains the current period until you initialize for a new period. The next prompt is: Enter path to data, if not xxxxxxxxxx? As above, this prompt allows you to have data for the different periods on different diskettes or directories. If the data for the earlier period is on the default drive, just press ENTER. If the data for the earlier period is on another disk, locate it and place it in a drive other than the default drive. If you have only two drives, you may remove the program disk from drive A: and replace it with the data diskette, provided that the data for the earlier period wasn't placed in that drive in the first step. If you are swapping disks, don't answer the question until the diskettes are in the proper drives. Finally, the following menu will be displayed: COMPARATIVE REPORT MM Program Menu AL All employees on master list EP Only employees paid during period TO Totals Only, no employee detail. Your selection, please: AL Enter either "AL" or "EP" as desired. For the purposes of most quarterly reports, the "EL" option will be desired because employees not paid during the period are not relevant and will just clutter up the report with zero amounts. In this case, the "AL" version might be used internally as a tool to audit the report LPI Information Systems 11-4

5 QUARTERLY REPORT EXAMPLE Suppose a report for the second quarter of 2005 is desired. Suppose also that the last pay period in the first quarter was on March 25 and that the last pay period in the second quarter was on June 27. Therefore, it is desired to make a comparison between the year-to-date totals of June 27 with those of March 25. We will assume that the data for June 27 is in your default data drive and that the default is B. When asked for the date of the earlier period, enter and locate the disk with the file "PR32505.PAY". If it is not on the same disk as "PR62705.PAY", put it in drive A: otherwise put it in drive B:. In response to the later period prompt enter the date and put the disk with the file "PR62705.PAY" (the report for that period) in drive B. This is the later period file. Print as many of the reports as needed before removing the data disks from the drives where they are now mounted. Note that if you have all history files for the current year on your hard disk, you do not have to hunt for the correct diskette (although you should have a diskette or tape backup of all history files). *** 09:40:51 *** Midwest Manufacturing Co. AMOUNTS PAID BETWEEN AND PAGE 1 ============================================================================== BRUCE A. CLINTON Emp. # BAC Hours Gross Amount REGULAR , HOURS Dbl Time GROSS IMPUTD GLI FED TAX SPEC. TAXABLE PAY CALIFORNIA 7.28 NON ADJ GROSS 2, FICA TAX ADJUSTED GROSS NON CASH Insurance A 5.40 Annuity B NET PAY 1, HAROLD W. JOHNSON Emp. # HWJ LPI Information Systems 11-5

6 UNEMPLOYMENT REPORT For the purposes of unemployment taxes, both state and federal governments usually tax the employee's gross income up to a preset cutoff point. The unemployment report provides the information needed to complete the forms and can serve as an attachment for detailed information. Many states will accept this general printed form "as-is". The report lists the employee's social security number, name, the gross wages paid during the period (usually quarterly), the amount paid during the period that was above the taxable cutoff point, and the amount of taxable income. The report has the same prompts as the comparative report as to the dates the periods ended, data drives, and whether or not you want to print the report only for employees paid during the period. The final prompt is: Enter cutoff amount for taxable income?_ You should enter the value that corresponds to the maximum year-to-date income that is taxable under current regulations. On the date this manual was prepared, the Federal cutoff amount was $7000, but it is your responsibility to provide the correct figure. Note that State and Federal cutoffs may be different! You may select the tax basis to be used for the unemployment report. The tax basis will be the same as gross pay unless tax-deferred deductions have been used. The tax basis needed for unemployment reports varies from State to State. *** 09:42:31 *** Midwest Manufacturing Co. UNEMPLOYMENT REPORT FOR BEGINNING OF YEAR TO PAGE 1 Tax basis is MISSOURI wages SS# EMPLOYEE NAME GROSS OVER 0 TAXABLE JOHNSON, HAROLD W. 1, , WEAVER, MARY JANE McINTYRE, TIMOTHY W. 1, , TOTAL ALL EMPLOYEES 3, , EMPLOYEES LISTED LPI Information Systems 11-6

7 FEDERAL 941 REPORT The Federal government requires a Form 941 Quarterly to reconcile employment taxes withheld with an employer's Federal Tax deposits. The 941 Report is designed to facilitate completion of the Federal form by gathering the necessary data from all pay periods in the quarter, classifying them by month and day of tax liability, and creating Form 941 and (optionally) 941B on a laser printer. It brings together information on total wages paid, Income tax withheld, FICA tax liability, and Earned Income Credit paid during the subject Quarter. Reporting Methodology 1. Compiling the data: Because the 941 Report demands detailed assignment of tax liability by date within the quarter, this report compiles its data from the current data of each pay period rather than using the difference between YTD values at the beginning and the end of the quarter (like the other Comparative Reports). This difference in methodology becomes important if any manual adjustments have been entered during the quarter. If any manual adjustments to YTD values have been made during the quarter, the operator will have to use the Federal 941 Report program to either: a. enter them as Tax Adjustments in lines 7a - 7g of Form LPI Information Systems 11-7

8 ...or b. modify the Tax Liability for the applicable Month(s) and Day(s) within the quarter in order to reflect the adjustments in the proper time frame. 2. Reconciling Differences: Form 941 attempts to reconcile differences between the tax liability reported on the W-2 forms and the recalculated tax liability appearing on Form 941. There will always be differences arising from Social Security and Medicare rounding errors, because the W-2 comes from the sum of the tax data calculated and rounded to the nearest penny each period, while the Form 941 data adds up the total taxable wages for the quarter, recalculates the tax on this total, and then rounds to the nearest penny. The Federal 941 Report program uses the W-2 data as the standard, and automatically initializes Form 941 line 7a with the sum of the rounding errors in order to force Form 941 taxes to match the W- 2's. There is a legitimate question as to what the standard should be. We chose the W-2 form totals because this choice results in the least re-entry for the operator, and does not require any adjustment of employee data. If you want to choose a different standard, the Federal 941 Report program allows the operator to override the tax liability for each period, as well as the automatic entry in Form 941 Line 7a, if desired. Using the Federal 941 Report Program 1. Creating a new Form 941: Before attempting to automatically create a 941 report, DATASMITH Payroll must have initialized Payroll Master files which have been correctly tagged with the appropriate Liability Year, Liability Month, and Liability Day for all pay periods in the subject quarter. If the Pay Period Tagging option has not been installed for the entire quarter, or if any of the current Pay Period Tags are not correct, the operator can use the Pay Period Tag editing facility of the Initialize and Utilities program (IN-AU-ET) to create or edit the Tags. After all of the required pay periods have been correctly Tagged and Initialized, the recommended procedure for creating Form 941 for a new quarter is: a. Use EC (Extract Data, Compose 941) to identify the quarter to be reported and the pay periods to be included, and to gather the data from those pay periods. During operation of this selection, a 941 Exception Report will be printed to document the assignment of each pay period to a specific Liability Month and Day, and to report any conditions which may compromise the accuracy of the 941 data. b. Use SU (941 Form Setup) to enter or edit deposit information, operator selections, and other information not contained in the Payroll Master files. This selection also allows the operator to override any of the automatically-gathered data, and/or to enter any or all of the 941 data if Payroll Master files are not available for the period. c. Use PF (Print 941 Form) with a laser printer to create the actual Form 941 Page 1, Form 941 Page 2, and (optionally) Form 941B. This selection can also be used to LPI Information Systems 11-8

9 reprint additional copies of these forms after the data has been established with the EC and SU selections. NOTE: DATASMITH Payroll allows the Current pay period to be included in the 941 Report before it is Initialized. If you choose to include the Current period, make sure that the Current period has been Calculated, and be aware that any changes to the Current period before Initializing it will probably require you to create a revised 941 Report. EC EXTRACT DATA, COMPOSE 941 This selection asks the operator to identify the Year (in 4-digit yyyy format) and Quarter (1-4) to be reported. Then the operator is asked to compose a list of all pay periods to be included in the report. The Earliest Period and Latest Period dates can be modified to make sure that all of the pay periods of interest appear in the initial List. The operator then should delete any pay period which is not part of the Quarter to be reported from the list. If the Current Period is to be included, make sure it has been Calculated. After the operator composes the list, the program will print a 941 Exception Report while the data is being gathered from each pay period in the list. Exceptions should be repaired before proceeding with the next step. Extracted data is held in a special file used to print the 941 forms. Use the 941 Form Setup selection (CP-FD-SU) to view and/or edit the extracted data. SU 941 FORM SETUP This selection is used to allow the operator to enter certain necessary data and to correct any automatically-gathered data before printing the 941 forms. If no laser printer is available or if 941 forms are filled out manually for another reason, the LPI Information Systems 11-9

10 operator can read the line-by-line entries for Form 941 Page 1, Form 941 Page 2, and Form 941B from 941Form Setup screens. On the 941 Page 1 screen, the operator is always required to enter the Total Deposits for the quarter on Line 11, and should also enter any adjustments required in Lines 7a through 7h. On the Form 941 Page 2 screen, the operator should always make the appropriate entry in Line 14, and verify that the correct depositor Tax Liability status is selected for Line 15. If monthly schedule depositor is selected, the tax liability for each of the three months in the quarter is displayed. If semiweekly schedule depositor is selected, a button will appear which allows the detailed Form 941B data to be viewed and/or edited LPI Information Systems 11-10

11 To view/edit the Form 941B data, the operator first selects the Month: On the resulting screen, the tax liability for each Day in the selected Month is displayed. To view and/or edit the detailed components of the Tax Liability for a particular Day in the selected Month, click the Day on this screen LPI Information Systems 11-11

12 The detailed Tax Liability calculations for the selected Day will be displayed. If more than one payroll has been assigned to the selected Month and Day, the values on this screen represent the sum of all of the pay periods for the selected Month and Day. If only one payroll has been assigned to the selected Month and Day, the values on this screen will match the totals in the Current Report for this period. If the Payroll Master for a particular period is not available for any reason, this screen can be also used to enter the original data. Any data from this screen will be used ONLY to produce the Form 941 and/or Form 941B: it will not be used to modify any Payroll Master file LPI Information Systems 11-12

13 NOTE: If you have used the SU screens to modify any 941 data, be aware that subsequent use of the EC (Extract data, Compose 941) selection will replace the edited entries with the original data from the Payroll Master files. PF PRINT 941 FORM This selection creates the actual Form 941 Page 1, Form 941 Page 2, and optionally Form 941B on a laser printer. Data on the form comes from the automaticallyextracted data (EC) modified by any operator entries (SU). LPI Information Systems is an IRS approved source for the computer-created 941 forms, so these forms are ready to be signed and submitted to the IRS (provided, of course, that YOU make sure that the data on the form is correct). Make sure your DATASMITH Payroll has been updated for the current year so that the forms will be produced in the correct format. BF PRINT BLANK 941 FORMS This selection has been provided to permit the operator to print blank 941 forms for use as worksheets, or manually-completed 941 submittals LPI Information Systems 11-13

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