Introduction

SPW Art

T-shirts Sold

PAYROLL INPUTING IN PEACHTREE ACCOUNTING

Issues left to be Resolved

Three problems we can identify at present with payroll are as follows:
1.) Our Payroll form is not posting our Employer's FICA to any account.

2.) What our account structure should be specifically our liability accounts for Federal
FICA and Medicare (see Inputing IRS Payments). Later Unemployment and
any benefits will likely be handled similarly.

3.)

Steps

Figure 25-1 Click on the "Tasks" menu and
scroll down the list to click on "Payroll Entry."

In Peachtree Accounting software, most daily activities begin by clicking on the
"Tasks" menu. Payroll is no exception.

payroll in Peachtree Accounting

Figure 25-2 The Payroll entry window is very similar to the Payments and Receipts forms windows.

The Payroll Entry window

The top ticket and stub are nearly the same except the employee is selected instead of a
vendor or customer. The "Pay Period End" and "Weeks in Pay Period" on the ticket
stub is new. Below the ticket is different, however. The bottom portion has the salary
amount and across from that are the employee tax and benefits fields. We are only interested at
this time in the FICA, MEDICARE and the Salary fields because we do not yet withhold taxes nor do
we yet pay unemployment taxes.

ngo financial policy manual

Cash Account

The cash account number from our Chart of Accounts in which the payment
was deposited. Our present cash accounts are Checking (1000M00), Savings
(1005M00), t-shirt Art (1005M02) and Petty Cash (1080M00).

Figure 25-3 This stub is from
the Payroll entry form

Pay Period End

The pay period for Chris Drew, our only and occasional payee, is monthly if the agency can
afford it. Input the last day of the month in this input box.

Weeks in Pay Period

The weeks in the Pay Period for C. Drew is four (4).

preparing financial statements

Check Number

Input the number of the
paycheck here.

Date

Date the check was written.
Figure 25-4 Ticket portion of Payroll entry form.

Employee ID

Click the look-up list to the right of the input text box to select the Employee.
If the employee is not in the list, then click on the "New" button and add the
new employee. To create an ID for the new employee use the first three letters
of the employee's last name as capital letters, add three zeros followed and a single
letter code for the department or program they are working in. A-administration, S=screen
printing, W=screen print workshop, C=computers, T=Art of the T-shirt. We are still dreaming
of the day we will have a full time employee.

Salary

When payroll is fully setup this field will fill itself out. In our case we are not
yet using this module as it should be used. That we get our account structure
and Peachtree to post correctly to those accounts are more important.

Peachtree Accounting questions

Figure 25-5 This persons gross salary is $270.71. The Employee FICA is $16.78. The Employee
and Employer each are recorded as paying $3.93 for Medicare. But there should be $16.78 recorded
under the Employer FICA (Soc_Sec_ER). It is zero! I would like to have an e-mail discussion with
someone who knows Peachtree Accounting software well on why this is.

For now we place the Gross Pay - the total of the employees paycheck plus FICA/MED - in
the "Salary" field. When we click into any other active text box, the window
will update and fill in the Employee/Employer Fields such as Soc_Sec (2312M00), the
Medicare (2314M00), the Medicare_ER (6030M00) and, on the Payroll Ticket above, it will
fill in the DOLLARS text box with the amount actually paid the employee (net pay). Notice
the Soc-Sec_ER field is empty. We do not know why this field is not recording
an amount.

Since we write a check for the net pay we have to discover the amount of the
total (gross pay) In most months our Executive Director refuses the full amount
of the $250 monthly stipend. To discover the gross pay we put an estimated total
amount in the "Salary" text box, click on an active text box, like the "Employee ID"
field, and view the result in the DOLLARS field.

Figure 25-6 This entry has $270 in the Salary (gross pay) field.
It results in a paycheck for $249.34. But we paid our Executive Director $250.

If our first guess in the Salary field does not result in a match between the amount of
the check we cut and the amount in the DOLLARS box, net pay (minus FICA & Med), we
re-guess. We plug the new guess into the "Salary" field, click on an active text
box to see the new result and do this until we get the paycheck amount correct in the
DOLLARS field on the Payroll Ticket.

Figure 25-7 We are only two cents off. Would you say $270.70 or .71?

When we have the correct amount entered we post it. Payroll checks are hand written
so we do not have to fight with Peachtree to print the FICA details correctly. Obviously,
we can not continue operating this way with a real paid staff. It is - however - an
excellent and honest start! As we grow this document will be updated. It is a living document.

Posting Employer FICA

What this process is not doing for us is posting the employer FICA. We will
work around this manually using the General Journal Entry window.

Figure 25-8 Click on "Tasks" and click on "General Journal
Entry" to open General Journal Entry form.

We will enter the FICA Employer Tax Payable (2316M00) account in the first line
and credit it with the Employer FICA amount. Then, on the second line we will
debit the FICA/Medicare (6030M00) expense account. The payroll check write date
goes in the "Date" field. The check number goes in the "Reference" field as seen
below. Posting this amount will correct for the paycheck in our previous example that
failed to post Employer FICA ($16.78).

Figure 25-9 A General Journal entry to correct for a mis-configured software
that will not post Employer FICA.

Manual Contents Page

Uptown Multi-Cultural Art Center (UM-CAC). Click here for contact Info or to E-mail UM-CAC at umcac@art-teez.org click here. Ph.773/561-7676