Balancing a payroll cycle

All open payment records, including ACH, system, manual, adjustments, and voids are listed on the Payroll Register (PR141).

You create a log or spreadsheet of payroll totals using the Payroll Register (PR141) as the source document for balancing periodic, month-end, quarter-end, or year-end. Balance these items to ensure that all payroll activity is consistent within the reports.

Balance a payroll cycle

  1. With the Earnings and Deductions Calculation (PR140) and Payroll Close (PR197), verify that:
    1. Payroll Pay Totals from PR140 equal Distribution Pay Expense Totals from PR197
    2. Payroll Deduction Totals from PR140 equal Distribution Deduction Expense and Accruals Totals from PR197
    3. Payroll Net from PR140 equals Distribution Cash Totals from PR197
  2. On the Payroll Register (PR141), verify the following company totals:
    1. Total Earnings equal Gross Pay
    2. Gross Pay less Pretax Deductions equal FICA Taxable Wages
    3. Gross Pay less Pretax Deductions and 401(K) equal Federal and State Taxable Wages
    4. Gross Wages less Deductions equal Net Pay
    5. FICA Withholding equals 6.2% (Social Security) and 1.45% (Medicare) of FICA Taxable Wages
  3. Access Payroll Close (PR197).
  4. Run the report in Update mode.
  5. Verify that the Payroll Close (PR197) totals equal the Payroll Register (PR141). This ensures that no other transactions were entered after the PR197 and PR141 were processed.
  6. Compare output reports from various stages of the payroll cycle.

    Beginning with the Earnings and Deductions Calculation (PR140), balance the payroll cycle by comparing:

    • PR140 totals to PR141 totals

    • PR141 totals to PR197 Report mode totals

    • PR197 Report mode totals to PR197 Update mode totals

    • PR197 Update Mode totals to General Ledger Posting (PR198) totals.

      As you process the payroll cycle, use the output from the reports identified above to balance the payroll cycle. The objective is to document and summarize all activity that was closed with the payroll cycle.

      When you compare PR197 Update Mode totals to PR198 totals you might find different totals if you do not run the PR198 with each payroll cycle. Because PR198 updates the General Ledger, and can be run to coincide with the General Ledger calendar instead of the payroll calendar, totals from multiple PR197 runs might be reflected in PR198 totals.

      PR140 PR141 PR197 REPORT MODE PR197 UPDATE MODE PR198
      Hours Hours Only if Hours are posted to GL Only if Hours are posted to GL Only if Hours are posted to GL
      Total Gross Wages Total Gross Wages Accrued Payroll Clearing Account(s) Accrued Payroll Clearing Account(s) Accrued Payroll Clearing Account(s)
      Net Pay Net Pay Cash Account(s) Cash Account(s) Cash Account(s)

Related reports and inquiries

To Use
List payment number and type, total hours, gross wages, total deductions, and net pay for each open payment Consolidated Payroll Register (PR142)
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