We have a return on a direct deposit that was made to a savings account and the checking account information went through. How do I void the partial direct deposit and reissue a check for the savings account amount?
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Hi Pam,
We recommend the following process (not just for partial returns, but for all returned direct deposits):
Step #1: First, enter a financial Bank Transaction entry in the financial module debiting our payroll cash account and crediting some other account of your choice (ie: accrued salaries or clearing account). Note that this will be reversed in step 2 when you cut the new direct deposit or check to employee to reimburse for the returned savings account amount.
Step #2: Set up a business expense type paycode (i.e. RETNDD) to handle any returned direct deposits and assign it to the employee. (Be sure to uncheck the tax marks on the new code. ) Because this code isn't subject to taxes it will have no impact whatsoever to the original transaction, gross wages, taxable wages, tax withholdings, etc.
Step #3: Add the paycode to the posting controls and map to the same g/l number you used in step #1. So when you process the payrun in the next step it will offset the same G/L account.
Step #4: Enter a payroll batch and transaction line for the employee using the new RETNDD code and amount of returned direct deposit. Then process the pay run for the employee to get them reimbursed for the returned amount.
The combination of the bank adjusting entry and reissued payroll creates the desired impact to the checkbook register and general ledger accounts.
Best Regards,
Jeff Rowles
L. Kianoff & Associates, Inc.
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