Generating weekly certified payroll reports when you issue bi-weekly paychecks to your employees can be difficult unless your accounting software will accurately accrue the wages for each week – QuickBooks doesn’t have this ability and quite often this causes problems.
Payroll is one of the largest expenses that a company will have. Most companies, when they start up, will find out what the minimum requirements for paycheck frequencies are for the state that their business resides in – earlier this week we discussed paycheck/payroll frequencies by state – and they will follow those rules. This will work fine unless you are a contractor who makes the move to Public Works/Government Construction projects and become subject to prevailing wage laws. This is when problems can occur.
Under the Federal Davis-Bacon and related Acts; contractors and subcontractors performing work on Federal or Federally-aided construction-type contracts are required to submit weekly payrolls. The Copeland Act provides further/clearer requirements; indicating that contractors and subcontractors performing work on Federally financed or assisted construction contracts “furnish weekly a statement with respect to the wages paid to each employee during the preceding week”.
Obviously, contractors and subcontractors who issue their payroll on a weekly basis find the necessary information easier to obtain; therefore, making compliance of certified payroll reporting easier on the people who actually have to complete the reports.
What happens when your company is subject to the rules found in the Davis-Bacon and the Copeland Act and you issue your payroll on a bi-weekly basis?
I’m not here to tell you that you HAVE to start issuing your paychecks on a weekly basis – I’m only here to tell you what the requirements are and about what COULD happen – based on my experience; so that you can make an informed decision.
If you are lucky enough to have an accounting program that accurately accrues and distributes payroll taxes and wages based on when it is earned rather than when it is paid – you shouldn’t run into any issues when you create the certified payroll reports. BUT, if you use QuickBooks you need to be aware that it does not have this ability and your payroll is recognized only when you actually issue the paycheck and this is where the problem with your certified payroll reports COULD begin.
Each certified payroll report has a weekly calendar section {shown below} where by day and date you enter the number of hours that each employee worked on the prevailing wage job site and the total hours that he/she spend there during the entire week.
Right click on the image to enlarge it
When you issue payroll in QuickBooks on a bi-weekly basis – you will enter the time worked for each of the two separate workweeks in two individual timesheets, for example, let’s say that your pay period ends on a Saturday:
- Your first work week covers Sunday, December 21, 2003 through Saturday, December 27, 2003
- Your second work week covers Sunday December 28, 2003 through Saturday, January 3, 2004
- Your paychecks will be dated on January 7, 2004
Below are the two timesheet entries from QuickBooks:
- Workweek 1 has 24 hours on the Prevailing Wage Job and 16 hours on a non-prevailing wage job
Timesheet Work Week 1 - Right click to enlarge
- Workweek 2 has 24 hours on the Prevailing Wage Job and 16 hours on a non-prevailing wage job.
Timesheet Work Week 2 - Right click to enlarge
Next, we’ll look at the QuickBooks paycheck detail, you’ll see that the total number of hours are accurate for the full two weeks.
- A total of 48 hour at $28.50 per hour for $1,368.00 in wages for the prevailing wage job
- A total of 32 hours at $28.50 per hour for $916.00 in wages for the non-prevailing wage job
- Total gross for the 2 week period of $2,280.00
- Net wages for the week $1,528.33
Bi-weekly paycheck - right click to enlarge
When you create or run your certified payroll reports {whether is is with our Certified Payroll Solution software or using the built-in QuickBooks certified payroll report} you’ll need to generate two individual reports; one for each week. This is what the reports will look like:
- Week 1 – the hours are correct {24} and the rate of pay is correct {$28.50} BUT the gross amount earned This Job/All Jobs represents the FULL amounts from the bi-weekly paycheck {$1,368.00/$2,280.00} instead of $684.00 this job/ $1,140.00 All Jobs which was actually earned for this specific workweek.
Certified Payroll Report Week 1 - Right click to enlarge
- Week 2 – again, the hours are correct {24} and the rate of pay is correct {$28.50} BUT the gross amount earned This Job/All Jobs represents the FULL amounts from the bi-weekly paycheck {$1,368.00/$2,280.00} instead of $684.00 this job/ $1,140.00 All Jobs which was actually earned for this specific workweek.
Certified Payroll Report Week 2 - Right click to enlarge
Is this wrong? Well, sort of; the laws do indicate that payroll should be reported {therefore, issued} for the preceding week.
What can you do if you issue payroll on a bi-weekly basis?
Many of our own customers issue payroll on a bi-weekly basis, and on the Statement of Compliance {in the Remarks section} they add a note that indicates that they issue paychecks on a bi-weekly basis and while the certified payroll report accurately reflects the correct number of hours worked on the job for the specified week; gross amounts earned This Job/All Jobs, deductions {including taxes and other withholdings} and Net Pay reflect the full amounts from the single bi-weekly paycheck.
Will this statement keep you out of trouble?
Not necessarily, it all depends on the Contract Administrator and Awarding Agency.
The best thing to do, in my opinion, is to just bite the bullet and issue your payroll on a weekly basis; at least for the employees who work on the prevailing wage projects. This may mean some additional planing and scheduling on your part, but it’s easier than having your certified payroll reports rejected and having to manually calculate the gross, taxes, deductions and net pay and resubmit the reports!
Look for similar articles next week on how a semi-monthly or monthly payroll run will affect your certified payroll reports.
I hope that you’ve found this article to be informative and helpful in making informed decisions for your business; if so please take a moment to leave a comment or to share this with others on your favorite social networking platform using the buttons below.
This QuickBooks payroll tip discusses how to create various reports for hours worked before creating paychecks – to ensure that your employees are being paid correctly and that your job costing will be accurate.
An important part of running any business involves keeping track of how many hours your employees work on a specific job and/or task and then accurately paying your employees for those hours. This is especially true for accurate job costing – no matter what type of business you run.
The amount of time spent on record keeping for payroll can be overwhelming for anyone and usually involves multiple people.
This is especially true if you are still using mostly manual methods; for example back when I used to do the payroll for a contractor who had 125 employees working on 5 different jobs – we had a job time sheet for each job every week. The foreman on each job would turn in a handwritten report each week that listed who worked on the job, what their classification was, how many hours they worked each day, etc. Sometimes the employees worked under more than one work classification or task (each involving a different rate of pay) and other times a small group of employees would end up working on all 5 different jobs we had going on during a single workweek – and I would have to take those 5 job time sheets and enter them into QuickBooks in order to run payroll. Not a fun job and highly error prone – especially if I had an issue reading someone’s handwriting!
It’s important to run reports to verify the accuracy of the data entered into the QuickBooks Weekly Timesheet before cutting payroll!
Reports for hours worked to run in QuickBooks before creating paychecks
QuickBooks offers several reports that you can generate and use to verify that employee hours have been entered correctly.
- From the Reports menu
- Choose Jobs, Time & Mileage
- Here you’ll find several “Time by” reports, I like the Time by Job Detail Report
- Set the dates to be the workweek and employee hours by job will be displayed
This by itself is a very useful report, but it only displays the hours and the service item (cost code) that the hours were posted against. My payroll item list was always pretty specific (I named my payroll items by the work classification that the employees worked under) and I wanted to include that information in the Time by Job Detail Report – if your payroll item list is pretty specific; you too can include that information.
- Once the standard Time by Job Detail Report is displayed
- Click the Modify button at the upper right
- In the Display box, place a checkmark next to Payroll Item and click Ok
Once you have this overall report, the possibilities are endless. For example, you can go back into the Modify option and Filter it for a specific job, print it out and give it back to the foreman along with his original timesheet for the job for his approval – get him to sign off on the report.
If you memorize these reports it will make it so much easier for you each week.
We hope you found this tip to be helpful, if so please feel free to share it, or leave a comment.
This QuickBooks payroll tip discusses how to correct payroll hours incorrectly charged to a job after paychecks have been created and cashed.
Accurately job costing payroll hours and wages is critical for many business types, not just contractors. The information that is entered in QuickBooks Weekly Timesheets and paychecks is only as good as the information that is received from those who are responsible for providing the payroll clerk with the original employee hours spend on various jobs. However, we are all human and, therefore, make mistakes, some mistakes can be corrected more easily than others.
A common mistake that can occur is the reporting of employee payroll hours on one job – - when those hours really should have been reported on another job; for example it was originally reported that employee John Doe worked 20 hours on Job A – in reality those 20 hours were spent on Job B. Quite often this error is reported to the payroll clerk after paychecks have already been processed and the checks have been cashed.
Quite often this situation puts the payroll clerk in a quandary about how to correct payroll hours incorrectly charged to a job.
When the error just involves changing a job {moving the hours from Job A to Job B} and does not involve also having to change a rate of pay; the easiest way to correct payroll hours incorrectly charged to a job is to edit both the timesheet and paycheck detail for the employee and change the job there.
When you edit both the timesheet and the paycheck detail, change the job, and then save your changes, QuickBooks will throw out some warning messages – don’t worry, for once it is ok to ignore these messages. Usually it’s not a good idea to ignore warning messages.
Another situation in which this type of correction can occur is when payroll is being processed, using time data entered in the Weekly Timesheet, and the payroll clerk is verifying the hours entered in QuickBooks against the timecards from the field, she discovers that the timesheet referenced Job A and it should have been Job B. The initial reaction is to just go ahead and make the change in the paycheck detail and call it good. However, what many people do not realize is that when you make a change in the paycheck, while processing payroll, the original timesheet entry is not updated to reflect this updated information – you must also go back and correct the job assignment in the timesheet.
Recap: If it’s just a change in job and not a change in hourly rate/wages; edit both the timesheet and the paycheck detail and make the change. That is the easiest thing to do to correct payroll hours incorrectly charged to a job when it doesn’t have an impact on wages.
A QuickBooks payroll tip for replacing a lost employee paycheck.
I’m sure that you’ve all run into this situation at one time or another: an employee sheepishly comes to you and tells you that he’s lost his paycheck, it was run through the washer, blew out the care window on his way to the bank, he can’t find it, etc. – and he NEEDS his money!
This situation can create quite a quandary for some business owners and their payroll clerks about how to replace this lost check. The immediate need is to reissue the paycheck.
Follow these easy steps to replace a lost employee paycheck:
- Go the Employee Center, click on the Employees tab and click on the Employees name to display his payroll history
- Write down the Number of the check that you will be replacing.
Right click the image to enlarge it
- Double-click on the check entry to open the paycheck form.
- Change the original check number to be the number of the current check that you will be printing.
- In the memo field type in “Replaces original check # XXXXX”.
- Click the Print button at the top of the paycheck form. A window will display prompting you to record your changes; click the Yes button. Another window will appear and you may need to type in the current check number again. Follow any remaining prompts, and the paycheck will be recorded with the new check number.
Right click on the image to enlarge it
You can now sign the replacement paycheck and give it to your employee so he can cash it.
The next step is to record the original check number as a “voided” check to maintain a good paper trail and it’s important to resist the urge to skip this step!
To record the original check number as a voided check:
- From the Home Page, click on the Write Checks icon
- In the check number field enter the original paycheck number
- Make sure that the date is the date of the original paycheck
- In the Pay to the Order of field, using the drop down menu select the Employee’s Name. You may immediately receive a warning message stating “If you want to create a paycheck for this employee, please use the built-in payroll features” – click the Ok button.
- From the Edit menu -> choose Void Check. This places the word VOID: in the memo field.
- Click into the Memo field and after the word VOID: type in “Replaced with Check # XXXX”
- Click into the Account field at the bottom of the check and choose your Payroll Wages account.
- Click Save & Close.
Now when you go to the Employee Center and click on the Employee’s name, you’ll see a visible record of the events that have just taken place, just like the screenshot below:
Right click on the image to enlarge it
NOTE: If the information that you see in the Employee Center doesn’t look like our screen shots, you can change your settings to make this information display by following these instructions.
If your right panel doesn’t display employee information at the top and paycheck transactions at the bottom – at the upper right of the Employee list window you’ll see an <– button, click on it to change the display to show this information.
If the transaction window doesn’t display the check number and memo field columns, right click anywhere in the transaction window and choose Customize Columns, a window will display. Here you can click on Chk No to highlight it and then click the Add button (this moves the Chk No field from the Available Columns window to the Chosen Columns window). Select Memo to highlight it and then click the Add button. Move the newly added items in the Chosen Columns window around arrange them as you would like to see the information displayed. Click Ok when you have arranged the information to your liking.
As an additional precaution, you may want to contact your bank and issue a Stop Payment on the original check number. While you may be charged a fee by your bank, it will ensure that the original check is never cashed.
We hope you’ve found this QuickBooks Payroll Tip to be helpful. If so, please feel free to leave a comment below.
A QuickBooks payroll tip about voiding paychecks – you should be very careful when choosing to void a paycheck because payroll checks have associated tax and other liability calculations and payments that need to be taken into consideration and it will result in changing payroll year-to-date amounts.
A common, and acceptable, reason to void a paycheck would be if the employee or someone else in your company notices an error on the check before it is cashed – in this situation voiding the check is acceptable because it will not have a negative impact on payroll liability calculations – because those liabilities have not yet been paid.
Be VERY careful about voiding a check if the employee has never picked it up – or it cannot be delivered to the employee because as an employer you have certain responsibilities regarding unclaimed paychecks.
You’ll find that there are several ways in which to make corrections to a paycheck that has already been printed, but not given to the employee OR given to the employee but not yet cashed; this is the method that I recommend:
Open the QuickBooks check register, find the check that you wish to void, click on the line entry to highlight/select it, right-click on the entry and choose the Void Paycheck option.
You can then make any timesheet entry changes, if necessary, and reissue the check by going to the Payroll Center and selecting the Unscheduled Payroll option.
Another method would be to simply open the paycheck in QuickBooks, make the necessary changes and reprint the check, giving it a new check number. This method leaves you with having to also record the already printed check as a voided check
- by opening the Write Checks window
- entering the check number of the check to be voided
- setting the correct date
- selecting the employee name and then dealing with a warning message about “If you want to create a paycheck for this employee, please use the built-in payroll features”
- clicking the Edit menu and choosing the Void Check option
You will also need to go back and make changes to the Employee Weekly Timesheet, if applicable. This method creates a lot of extra work and some of the necessary steps may be overlooked – which is why I’m not fond of it.
