Issue Manual Checks through Accounts Payable for Employee Refunds Resulting from Payroll Adjustments that Reduce Employee Withholdings and Deductions

If a cash account is selected on the Account field on the Payroll Adjustment page, the account is credited which causes confusions to users especially during bank reconciliation because it appears as if there has been a reduction in cash when in fact there is none.

 

One way to avoid this confusion is by issuing a manual check to employees through Accounts Payable for the payment of the refund. This can be done by selecting Accounts Payable on the Account field of the payroll adjustment page. Please see steps below:

 

1. Navigate to Transactions > Employees > Create Payroll Adjustment.

2. Select the payee and the date fields appropriately.

3. On the Account field, select Accounts Payable.

4. Enter the adjustments with negative amounts under Withholdings and Deductions tabs.

5. Save and Commit.

 

To write the check payable to the employee:

 

a. Navigate to Transactions > Payables > Pay Bills.

b. Select the Account and Date fields as necessary.

c. Check Pay box for the item with Type = Payroll Adjustment

d. Save

 

Note: This applies to payroll adjustments reducing withholdings and deductions only.