Reconcile NetSuite Payroll Funding Bank Account with the Actual Bank Statement

NetSuite Payroll Service debits the Payroll Funding account of users to fund for the Taxes, Net Pay (direct deposit and service printed checks), and Payroll Batch Fees.    Below are items for consideration when reconciling the Payroll Funding Bank account in NetSuite against the actual Bank Statement:   1.    Refund of payroll taxes from PAYCHECK REVERSALS   a.    Processed after the cut-off [2 Business Days by 2 PM Pacific Time] and within the same taxable quarter.   n  The refund of payroll taxes from paycheck reversal made after the daily cut-off is applied to the funding of the next payroll and as a result, the bank debits on the bank statement is less than the total amount credited to cash on the funding journal. To reconcile the cash balance in G/L with the balance in bank statement, user can create a Journal Entry or create a Deposit transaction with the following G/L impact: - Debit to Cash - Credit to liability accounts associated to each of the payroll tax items   b.     Processed after the cut-off [2 Business Days by 2 PM Pacific Time] but: Not within the same taxable quarter [ex. Check Date: 03.31.2018, Reversal Processing Date: 04.02.2018].   n  Refund from payroll taxes will reflect on user's quarterly tax account reconciliation package. n  User needs to request the refund upon receipt of the tax account reconciliation package by submitting a Refund Request Form n  Once refund is received, user can create a Journal Entry or a Deposit transaction same as above [Letter a].   NOTES: This is only applicable if: -      Reversal date is the immediate next quarter of the paycheck check date. -      Reversal was made within cutoff for end of quarter adjustments. If made after cutoff then it must go through amendment process. -      For inquiries about the amendment process, please contact support.     2.    Quarter End Payroll Adjustments [involving taxes] processed NOT WITHIN the quarter but BEFORE the quarter end cutoff.   n  For additional taxes: >> These are usually reconciling items due to timing of posting. Payroll adjustment are posted on the quarter that ended but funds are taken and posted [on the bank statement] on the next quarter.   n  Refund from employee tax withholdings: >> This need to be reimbursed to the employees creating a reduction [credit] to cash. Reimbursement can be done either by writing a manual check [Refer to SuiteAnswers ID: 7504] or processing a paycheck using non-taxable payroll item.   >> It is becoming a reconciling item since cash account is credited twice. Credited, when the payroll adjustment is processed and credited again when the reimbursement is processed for the employee.   >> Refund will form part of tax account reconciliation package. User needs to request the refund upon receipt of the tax account reconciliation package by submitting a Refund Request Form. Once refund is received, user can create a Journal Entry or a Deposit transaction same in Item 1, letter a.   n  Refund from employer taxes >> The same with employee tax withholdings but not reimbursable to employees.   >> Refund will form part of tax account reconciliation package. User needs to request the refund upon receipt of the tax account reconciliation package by submitting a Refund Request Form. Once refund is received, user can create a Journal Entry or a Deposit transaction same in Item 1, letter a.   3.    Additional taxes due to amendments / Authorization to debit   n  For payroll adjustments resulting to amendment returns, NetSuite Payroll users receive copies of the Amendments.  An Authorization to debit is also received from NetSuite Payroll Service. n  Kindly take note of the amount on the payroll adjustments and authorization to debit. n  This becomes a reconciling item because payroll adjustments are recorded on the affected quarter or period but amounts are taken from bank account when the authorization to debit is processed. n  Also, sometimes amount from the authorization to debit includes penalties or interest. n  To record penalties or interest you can debit: Expenses, credit: Cash Account.   4.    Quarter-end variance debits or additional liabilities from quarter end tax reconciliation   n  Usually these are amounts automatically debited from user's bank account. n  Common description that appear on bank statement is "Tax Service 702 Pmt Impnd" n  Variances are typically caused by State Unemployment Insurance rate changes applied during the quarter or other necessary adjustments that are found as part of the quarterly reconciliation process. In addition, Ceridian participates in State Unemployment Insurance (SUI) rate exchange programs with many of the state unemployment agencies whereby they communicate directly with the agencies to determine updated Unemployment Insurance (UI) rates to use when filing quarterly returns. n  To record these transactions, create a manual journal entry:   Debit: Expense Account Credit: Cash Account   Note:  For quarter-end variance debits or credits, please see Tax Account Summary found on the first page of client statement package and Quarterly Tax Summary found on the second page   5.    Payment method   a.    Direct Deposit and Service Printed Checks   n  Net Pay and Payroll Taxes are funded together with the Batch Fees one day before the check date   b.     Employer Printed   n  Generally, Payroll Taxes are funded one day before the check date and Payroll Batch fees are collected one day after the check date.    Note: The banks need one day to process the files/transactions, thus, users are required to send out ACH or reverse wire the day the payroll was received and it would fund the next day.  NetSuite Payroll Partner charges for same day processing of employer printed checks.     6.    Additional information needed to review payroll bank reconciling items.   n  Review for Check Date field Navigate to Transactions > Employees > Create Payroll > Lists View the Payroll Batch > Look for Check Date field   n  View Payroll Status Settlement Date Navigate to Transactions > Employees > View Payroll Status  At the bottom of the page, search for Type and select Funding – ACH   n  Common descriptions that appear on bank statements:   >> Tax Service 702 Pmt Impnd – this code relates to: • Quarter-end variance debits or additional liabilities resulting from quarter end tax reconciliation • Funding of regular batches including taxes and direct deposit net pays   >> NetSuite Inc Funding - This code relates to: • Payroll batch fees