Client asked – I have doubts before i go ahead and start a new payroll year…
1) what will happen if Payroll activity statement matches with payroll register but does not match with general ledger or P and loss account?
2) we have paid PAYG withholding up to May 2011 but i didn’t pay June PAYG withholding because our BAS is due in July.
Can i process payment summaries and start a new payroll year or do I need to reconcile first all the accounts then go further?
Answer – Yes your General Ledger should match/or final balance reconcile to your payroll Activity and Payroll Register BEFORE you roll over. Subtract the difference and try to see if a transaction has gone to the wages or PAYG Liability or Super Liability, and shouldn’t be there. Check if all payments of PAYG (via BAS/ or Instalment Activity Payments) and super are there correctly.
Wages expense account should match your Gross Wages in the Activity Report, full year.
PAYG balance at year end should be the net after the last PAYG payment eg if PAYG paid via last BAS last Qtr (ie to the end of March) then the April to June PAYG should be the balance at Year End of the PAYG Liability account. In your case only the June amount, as you have paid up until May. (And entered the payment to the Liability account).
Same for Super Liability, year end balance should be what is not paid.
It is OK to have part paid the PAYG, before you rollover the payroll year, the account will still have the records and the balance due is paid in July.
So ensure ALL BAS are entered and PAYG allocated to the Liability account and super payments allocated to the Super Liability account.
When all reconciles, THEN process payment summaries, THEN a BACKUP should be made and labeled YE11 Payroll. Then you have a correct and reconciled payroll year.
THEN you can rollover the payroll year.