How to Tie Payroll Reports and Journals Together for Audit Payroll Audit How to Tie Payroll Reports and Journals Together for Audit

Payroll Audit There are several payroll reports generated during the payroll process – this audit process focuses on the following reports: During pre-payroll or reports step (requires report to be set up to run): Payroll Register (R073012) DBA Register (R073062) Federal Tax Register (R073170 for U.S. and R773170C for Canada) State Tax Register (R073162 U.S. only) During print step (requires report to be set up to run): Payment Register (R07238) During the print step (produced automatically with auto deposit file): Auto Deposit Bank Register (F07235 for U.S. and R77235 for Canada) During the journal step (runs automatically): Payroll Journal Proof Edit Report (R05229) Wild Oat Consulting Inc. 07/06/2019

Payroll Register The Payroll Register is used to review the payments made during the payroll process. The net pay amount from this register must match the net pay on the Payroll Payment Register and the Payroll Journal Report. Wild Oat Consulting Inc. 07/06/2019

DBA Register The DBA Register will show the results of all DBA calculations, including the DBAs that are set to not print. Setting a DBA to not print not only prevents the DBA from printing on the employee’s pay check or pay stub, but also prevents the DBA from printing on the Payroll Register. The DBA Register is the primary report for all DBA calculations. Only those DBAs which create liabilities (those that calculate an amount which is then due to be remitted to an external vendor) must balance to the Payroll Journal liabilities (T1). In this example – all DBAs are being processed into the same liability account via the payroll AAIs (Automatic Accounting Instructions), so the grand total of DBAs is being used – this is not necessarily a normal process as some accruals such as sick and vacation would not normally be included as an external liability. Wild Oat Consulting Inc. 07/06/2019

Federal Tax Register The Federal Tax Register provides the total tax payable to the Federal Gov’t, including both employee and employer taxes Wild Oat Consulting Inc. 07/06/2019

State Tax Register The State Tax Register provides the total taxes payable to the State, including both employee and employer taxes. Wild Oat Consulting Inc. 07/06/2019

Auto Deposit Bank Register The Auto Deposit Register reports the total net pay being sent to the bank. This is a very valuable report as it lists each employee and the bank account being deposited into. JDE does not store historical bank account information, so this report is the only document that can be referred to when trying to understand where a previous net pay’s payment went (aside from the bank itself). The Total Credit Entry (U.S.) or Total Deposit Amount (Canada) should match the total amount received by the bank. The bank should be confirming the upload’s receipt and the totals. It is recommended to keep a copy of the bank’s verification report and a copy of the file which was uploaded with the payroll reports. Wild Oat Consulting Inc. 07/06/2019

Payroll Payment Register The Payroll Payment Register must match the Payroll Register’s net pay. This register shows both the checks and the auto deposits and will also show interim payments separately (those which were merged into the payroll). Interim payments uploaded to the bank with a different Advise Date will not display on this report. When an interim payment has its payment generated off-cycle and uploaded to the bank, that interim payment will have its own Direct Deposit Register. Wild Oat Consulting Inc. 07/06/2019

Create a Payroll Funding Report The creation of an excel based payroll funding report assists in balancing the Payroll Journal Report’s liability entries based on data from the other reports. The DBA Register is used to document those DBAs which create payables, the tax registers are used to document the taxes payable, the Payment Register is used to document the net pay payable. The Payroll Funding Report can be used to provide a document to the Treasury Dept to advise the amount of funds to move to the Payroll Bank Account or simply to advise the cash required to cover the payroll costs. If interim payments are made off-cycle (uploaded to the bank), then a Payroll Funding report for the interim may be needed – this would be for net pay only as the DBAs and taxes will process through a payroll or an interim-only payroll. It may be necessary to split information out by companies if different bank accounts are used for different companies – if the separate companies are all processed under one pay cycle ID. Wild Oat Consulting Inc. 07/06/2019

Payroll Journal Proof/Edit Report The Payroll Journal report provides the journal information as it will be posted into the General Ledger. Aside from checking to ensure there are no errors on the journal, there are three other important steps: Match the payroll liabilities from the DBA Register, Tax Registers and Payment Registers – possibly using an excel based Payroll Funding Report Confirm the documents (T1, T2, T3) balance Confirm the AW, CF and CT entries clear to $0.00 (note – different rules apply for AW entries if Timecard Post is used) Why is this important? To ensure the payroll AAIs are functioning as expected, to ensure the payroll reports are matching and to confirm the payroll liabilities are correct before posting to the G/L. This step also can provide approved SoX structure within the payroll department. Wild Oat Consulting Inc. 07/06/2019

Payroll Journal Proof/Edit Report Wild Oat Consulting Inc. 07/06/2019

Payroll Journal Proof/Edit Report Clearing Accounts (AW, CF, CT) balance to $0.00 Wild Oat Consulting Inc. 07/06/2019

Payroll Journal Proof/Edit Report Ensure the document type total balances (T1, T2 and T3) – debits to credits Wild Oat Consulting Inc. 07/06/2019

Payroll Journal Proof/Edit Report Ensure the document final total balances – debits to credits Wild Oat Consulting Inc. 07/06/2019

Review of the Payroll Reports Wild Oat Consulting Inc. 07/06/2019

Payroll Audit Steps - Review Description 1 Compare Net Pay from Payroll Register to Total Payments on Payment Register 2 Compare total Auto Deposit amount from Payment Register to Auto Deposit Bank Register 3 Compare Net Pay from Payment Register to Payroll Journal T1 entry 4 Compare DBA totals on DBA Register for all DBAs that create liabilities (cash DBAs will be included in net pay) to accrued liability amounts on Payroll Journal (T1) 5 Compare tax totals from Federal and State Registers to accrued taxes amounts on Payroll Journal (T1) 6 Using the Payroll Journal - total the AW, CF and CT entries to ensure they balance to $0.00 (T1, T2, T3). Note - if timecards have been posted via Timecard Post, the Payroll Journal will be out in the AW entry by the amounts of the Timecard Post journals where timecards are included in the payroll 7 Ensure Payroll Journal document totals balance Wild Oat Consulting Inc. 07/06/2019

Wild Oat Consulting Inc. 07/06/2019