Bank rec issue with payroll checks that are split between partial check/partial direct deposit

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Posted on by jrdurham72

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We are running GP 10 payroll and we have 3 employees who receive a paper check with a portion of that check going as a direct deposit to their bank. We were told to set up the direct deposit portion as a deduction which we have done. When we go to GP reconcile for some reason the entire paper check amount is being lumped in with the direct deposit total for that week and the portion of the check that truly is direct deposit is not being accounted for at all. I assume the reason the direct deposit amount isn't being recognized is GP bank reconcile thinks it's a deduction. I'm not sure why the net paper check is being lumped into the direct deposit total. Anyone have any experience with this?

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Sounds like you don't have Direct Deposit set up at all. You may not even own the module and the deduction approach is a work around that is not quite doing the job.

If you want a line to show in bank rec for the net check and one for the DD amount, then the DD module would be required.

Warren

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We have the same issue. The amount of the check that is printed is included in the file total of the direct deposit amount that posts to the checkbook and the check itself does not show up in the checkbook register. The direct deposit deduction amount does not post to the checkbook at all. When performing a bank reconciliation, I have to enter the amount of the direct deposit deduction as a decrease adjustment.

Because we have a salary payroll issued on the last day of each month, I also have to enter an increase adjustment for the payroll check that has not cleared yet. I then have to make sure to delete the adjustment batch because GL is properly updated with the payroll posting. The result is that my reconciled bank balance is off from the actual GL balance every month by the amount of the payroll check that has not yet cleared the bank.

That's our workaround, but I really do wish they would simply fix the issue.

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Matt Borkowski 65 on at

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This is a known issue that has been around for a long time but Microsoft has said they have no plans to fix it. The only thing you can do is post an increase adjustment for the amount of those checks, a decrease adjustment for the amount of the linked deductions, and the post a bank transaction for each of the paper checks (making sure to debit and credit the cash account on each of these).

FIX THIS MICROSOFT! IT MAKES YOUR SOFTWARE APPEAR SUB-PAR!

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Jeff LaPointe 1,022 on at

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I have tested the scenario of having an employee who receives a partial paper check and partial direct deposit during a pay run.

When an employee receives a partial paper check and partial direct deposit during a pay run, BR and Safepay are not updated with the employee’s net pay.

When you split wages between a payroll check and direct deposit, the amount of the linked deduction will not update the Bank Reconciliation module.

The employee's check stub will show a deduction as part of the payroll. The Payroll module does not treat this as a separate transaction, but as part of the paycheck.

Because of this, the direct deposit is not considered income. Rather, it is considered a deduction like any other voluntary withholding the employee has. When you generate the payroll, the direct deposit for the deduction will be included in the ACH file along with the other entries.

Only the amount of the check will update Bank Reconciliation. This option is not a good fit if you are using the Bank Reconciliation module.

In this scenario, the Bank Reconciliation module will be understated, and you must manually update the Bank Reconciliation module with the amount of the linked deduction each time a payroll is run.

In this case, MSFT states GP is working as designed. If you would like to pay employees with a partial paper check and a partial direct deposit amount, you will need to be aware that BR and Safepay will not be updated with the partial direct deposit amounts.

Hope this helps,

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Brenda Willey 2,520 on at

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Honestly Jeff, it doesn't help. MS has created a product that allows you to split a paycheck into a live check and a direct deposit but does not appropriately update the checkbook which MS also requires you to use instead of a reconcile directly to the GL. So it may be working as designed but is a very poor design. FIX IT MS.

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