PAYROLL YEAR-END MAINTENANCE
Year-end is actually a very easy task in the payroll system. Of course there are many things to keep in mind this time of year, but the payroll software makes your job relatively easy when it comes to the payroll issues.
Important things to remember:
-you must do year-end maintenance before you can do your first check of the new year
-at year-end you do NOT need to perform quarter-end maintenance
-you will still be able to access your last year files by using the F9 key
-you can do quarterly reports and print your W-2s by using the last year files
-wait until after year-end maintenance in all companies to edit the Tax Tables for the new year
Contrary to what the OSAS payroll user’s guide says, you do NOT need to do your W-2 (or 1099) processing before you do your year-end maintenance. The way the system is designed, when you perform the year-end maintenance the software saves critical data files for the year that has just ended as a set of LAST YEAR files. These LAST YEAR files will remain until next year at this time when you run this process again and they get replaced. So when you do year-end maintenance in payroll, you are actually not losing any data from the year you are closing (unless you choose to delete some history), you are moving the year that has just ended into the LAST YEAR spot. Of course, if you have had the software for more than a year, it is likely that there are data files already in the last year spot from a year ago. You will be losing these files, but they should no longer be needed at this point since they are a year old, and you don’t have any choice but to replace them.
You should keep in mind that only some of the payroll files are affected by year-end maintenance. Not all the files have a current year/last year version. The transaction type history files that contain the check history and earnings history retain all their information unless you choose to delete the history. This enables you to retain check history and transaction history for several years (or as long as you want and have disk space). The important files that do have a current year/last year version include: employee master file, employee history, and Tax Tables.
Before starting the year-end maintenance, some housekeeping should be done with the employee master files, particularly in regard to termination dates. Employees have a spot in their general information screen in payroll for a termination date. If you use the Crosse-Over Time Card module with this company, there is also a spot in the employee master file in Time Cards for a termination date. These two files should agree with each other. You should use the Master File Lists, Simple Employee List to print a list of your employees in the payroll side. This list shows termination dates next to the employee name if one is on file. You should print a similar employee list on the Time Card side by using Master File Lists - Employees to print a simple list. Compare these two lists. Employees who have termination dates in Payroll should also have termination dates in Time Cards. Make any necessary changes so the lists agree. When you perform year-end maintenance in Payroll, the terminated employees will automatically be removed from the new year employee master file. There is a separate process found in Time Cards, Periodic Processing, Remove Terminated Employees that you should use after you have done the year-end in payroll so that the same employees are removed from the Time Card side.
You should be finished with your last payroll of the year. Once you perform year-end, you will not be able to use the Calculate Checks function with last year’s data. You can use the Manual Checks function in last year if needed.
The year-end maintenance is found in Payroll, Periodic Processing, Periodic Maintenance.
*---------------------------
Periodic Maintenance -----------------------------*
|
|
| Have you run the following? |
| Earnings and
Deduction Report |
| Sick Leave and
Vacation Report |
| Quarterly Employer's Tax Report |
| Quarterly
Withholding Report
|
| Quarterly State
Unemployment Report |
| 941 Worksheet |
| Department
Report
|
| Copy to Backup |
| YES |
|
|
| 1. Quarter End |
| 2. Year End |
| 3. Histories Only |
| 2
|
| |
| Remove check history for items dated
before |
| Remove transaction history for items
dated before |
| Clear remaining sick/vacation time
(year end only)? |
*------------------------------------------------------------------------------*
|
|
*- Company 1 -------------------------------------------------------- Verify --*
You will say YES to have you run the following (keeping in mind that even if you haven’t you will still be able to run them using Last Year data if needed). You will select 2 for Year End.
Remove Check History?
If you leave this date blank (recommended) the system will keep all check history. With today’s large disk drives that hold plenty of storage space, I would not delete any history that is less than three years old. In fact, for many companies you may want to keep 5 – 7 years of check history. You can use the Resource Manager, Reports, Data File Allocation report to see the size of your data files. In any case, year-end probably isn’t the best time to delete the history anyway. You can always come back to this menu and choose 3 Histories Only to delete the history at a time when things are less hectic.
Remove Transaction History?
If you leave this date blank (recommended) the system will again keep all the transaction history. This file is the file used to print the Payroll, Payroll Reports, Transaction History Report. You may wish to delete the history once every couple of years, and always use a date that is at least a couple years old. Year-end is usually not the best time to do this. Why not mark your calendar in May to do some housekeeping then?
Clear Remaining Sick/Vacation Time?
Each employee has a holding pot of remaining Sick and Vacation hours. If you say YES to this question, the program will set these fields to zero for the start of the new year. Most companies that accrue vacation and sick time would not want to reset at the beginning of the year. Only say yes if you want the remaining balances to be zero. It would be useful to say YES to this question if you intend on editing the remaining hours or setting starting points for hours remaining. It they are all set to zero it makes it easier to enter the exact number you want later when you edit instead of having to adjust a meaningless number that could already be in the holding spot.
After you answer the above questions, you will press <PgDn> to proceed.
If last year’s files already exist (because you have had the system for more than a year) then you will be asked the question:
Last-Year files
already exist. Do you want to overwrite
them?
You should say YES to this question. The system will remove the files that are already one year old. If you say NO, then the system does NOT perform year-end maintenance. If the files exist, you must say YES in order to complete the year-end maintenance.
If you skipped the dates for deleting histories, then it will only take a few seconds to perform the maintenance. If you selected to delete history, it could take as long as a couple hours to perform the necessary maintenance.
After you have done the year-end, you use the F9 key at any payroll menu to toggle between the current year and last year. This would allow you to switch back into last year, print reports, process W-2s or 1099s, even edit employee history if needed.
The PACTLxxx table in the current year will be set to quarter 1.
A quick way to see that everything is where it should be is to use the Quarterly Withholding Report (under Periodic Processing menu). You can print this report in summary in the new year and the results will be all zero. If you print this report in summary for last year, you should get the figures for the year you just finished.
If you want to print a check history report for the prior year, be sure to toggle into last year to print the report if you want to see all employees who were active last year. While the check history is not removed, employees with termination dates were removed from the current master employee file. If you print the report in the current year, the removed employees will not show up on the report. If you are printing a check history report for an employee who is still active, it doesn’t matter if you are in the current year or last year.
If you use the Time Card module, now would be a good time to do the Periodic Process in Time Cards, Remove Terminated Employees.
There is a design flaw in OSAS Payroll in regard to doing the year-end maintenance. As you know, the maintenance is going to move certain payroll files specific to the company you are working with into the “last-year” spot for that company. As part of the process it is also going to save the Payroll Tables and Tax Tables. The problem is that the tables and tax tables are NOT company specific but are shared between companies. The flaw is that if you have more than one company, when you perform the year-end for the second or more company, the Tables and Tax Tables are replaced in the “last-year” spot with what is the CURRENT set of tables. This presents a confusing situation since in the “current” set of tables the first company you did the maintenance for already has the updated year number in the PACTLx table set to be the new year. The result is that after you do the maintenance for the second time, in the “Last-Year” tables, the PACTLx table for the company you did first will be wrong. The year number in the table will actually be the new year. The PACTLx table for the company you just did the maintenance for will have the correct year.
Having the PACTLx table wrong is not usually a major issue. However, if you then try to work with W-2s, the W-2 program may have the wrong year depending on which company you are working in.
The solution to this design flaw is simple. After you do the year-end maintenance for ALL companies, use the F9 key at Payroll, File Maintenance to switch to last-year, go into the TABLES file and look at each of the PACTLx tables. You can look at ALL the tables from any company (remember – they are shared). The tables for last-year should have quarter 4 with the correct last-year. Change any table that does not have the correct year. (Don’t be surprised if the last company you did maintenance in has the correct table and the others are wrong.) Once you are done with performing your year-end processing in all companies, and once you check and correct these tables, you should never need to worry about it again. The tables will not “mysteriously” change since you no longer have year-end to perform.
When updating the Tax Tables for the new year you should always wait until the year-end maintenance is done in ALL companies before you make the changes. If you make the changes to the tax tables after you do year-end in just one company, then when you do year-end for the second company the new-year tax tables will end up being copied into “Last-Year”. The only possible concern I would have with that happening is again the effect on W-2 processing. The FICA table is used by the W-2 program to determine what the FICA limit on wages should be for the year. You want the table to have the right limit for the corresponding year.
Since this flaw most directly effects the W-2 processing the bottom line is to ALWAYS check the corresponding PACTLx tables and the FICA tax table before processing your W-2s.