Hi. I realised recently that I’d calculated our Coronavirus Job Retention Scheme Grant amounts wrongly so have now corrected the amounts with HMRC and have had some excellent support from ThePayrollSite to correct the payroll figures and create new payslips. I’ve also made adjustments to the Nest Pension contributions. I now need to correct the figures in Quickfile but I’m not sure where to begin. Should I amend the journals that ThePayrollSite previously created or do a new journal for all the differences? I need to amend March, April, May and June’s pay. I haven’t actually paid the staff the difference yet if that helps.
Assuming all the adjustments relate to the same financial year the simplest would be one journal to correct the differences, with the balancing entry as a credit on net wages. When you actually pay them you’d tag it as wage payment in the normal way to balance it up (assuming you’ve got “post net wages to balance sheet only” turned on, which is the norm if you’re doing proper payroll journals).
If the differences span two accounting years it’d be better to create one journal in each year so the P&L is right, but still you’d just post the balancing entry to net wages and the part from last year that you hadn’t paid out by year end will show on the balance sheet as a liability.
Thanks for the reply Ian. I’m afraid I’m new to this, having only started the business in March and then within 3 weeks having to go into lockdown! So I think I’m going to need walking through the steps if you don’t mind.
The differences are in the same accounting year so should I do the following:
Create a new journal and build it manually with the differences so it looks the same as the PayrollSite journals. So:
(7000) Gross Wages, Debit
(7006) Employers N.I., Debit
(7001) Directors Salaries, Debit
(7007) Employers Pension Contribution, Debit
(2220) Net Wages, Credit
(2210) P.A.Y.E., Credit
(2211) National Insurance, Credit
(2230) Pension Fund, Credit
When the actual payments to the staff, HMRC and Nest leave the bank account I’ll tag them in the normal way. When you say that will ‘balance it up’, where do I see if it does or doesn’t balance?
Actually, seeing as you have a record in the payroll site of exactly what the journals should have been, I suspect the least error-prone method will be to edit each of the existing QuickFile journals to match your numbers on the payroll site. That way you don’t have to actually calculate any more adjustments manually.
One thing I would advise though is don’t bother splitting national insurance from the rest of your PAYE liability - just put everything that you owe HMRC under PAYE onto 2210 (income tax, class 1 employee and employer NI, student loan payments, etc). The 2211 nominal is more for other types of NI contributions such as class 1A that aren’t handled through pay-as-you-earn.
When you’ve adjusted the journals there will be a residual balance on 2210 (for tax and NI), 2220 (for wages you still owe the staff) and 2230 (for underpaid pension contributions). When you make the respective payments you tag those as “tax payment to HMRC”, “wages” and “something not on the list” to 2230, and those debits should cancel out the liabilities (credit balances) on the three nominals and remove them from your balance sheet.