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Lesson VI”Payroll
Beginning the Lesson


Lesson VI”Payroll

Tu In this lesson, you™ll learn about processing payroll with Peachtree
Accounting.

You will learn how to:
• Store constant information about standard payroll fields and
payment methods in Default Information and in the Maintain
Employee file
• Enter paychecks
• Run a Payroll Register report to verify payroll entries
• Print payroll checks
• Analyze employee earnings
In this lesson, we™re also going to see how Default Information fits into the
flow of tasks in Peachtree Accounting.
Estimated Lesson Time: 30 Minutes

Beginning the Lesson
If you are continuing from Lesson V, skip this section and proceed with the
lesson.
If you are just starting the lesson, do the following:
1 Start Peachtree Accounting and open up the sample company, Bellwether
Garden Supply.

2 If the Action Items window appears, close it for right now.

3 From the Options menu, select Global. Peachtree displays the Maintain
Global Options window.
You need to make sure that the tutorial global options are set up
properly.
4 In the Accounting tab, do the following:
Select Manual Decimal Entry and 2 as the number of decimal places.

• Clear the Hide General Ledger Accounts option for all modules
(Accounts Receivable, Accounts Payable, and Payroll).
• Select the “Recalculate cash balance automatically in Receipts and
Payments” option.




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5 In the General tab, do the following:
• Make sure the Line Item Entry Display option is set to two lines.
• Select both Smart Data Entry options by putting check marks in the
“Automatic field completion” and “Drop-down list displays
automatically” check boxes.
You could possibly have other global options selected as well. However,
the above options are the only ones that directly affect this tutorial.
6 When finished, select OK to close the Maintain Global Options window.


Payroll Tasks
Processing payroll in Peachtree Accounting is, at most, a five-step process.
The number of steps may vary depending on your needs.

Task Procedure

Employee Defaults Set up company standard payroll
information and define payroll fields

Maintain Employees/Sales Reps Set up individual employees, pay rates,
and special deductions

Payroll Entry (or Select for Payroll Enter paycheck information for a
Entry) specific pay period

Print Payroll Checks Print employee paychecks

Reports Print Earnings reports, 941 forms, and
W-2 forms


You may use all five steps, or, in some cases, only a couple, depending on how
much payroll information you intend to track and/or use.




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Lesson VI”Payroll
Default Information


Default Information
Default information is an important part of running your business efficiently
with Peachtree Accounting. Setting up default information allows you to
enter data easily while also being consistent.
1 From the Maintain menu, select Default Information, and then Employees.




The Employee Defaults window displays four folders. Each area allows
you to set up standard information that will make your payroll
processing as automatic as possible. We™ll look at some of this
information.
2 Select the EmployEE Fields tab.




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Payroll Fields
Using payroll fields, you can track 401(k) contributions, tips, employee
taxes, and employer taxes. You can even set up non-dollar amounts, like
vacation hours, to be updated each pay period.
Payroll fields are holding places for any amount that must be updated by
payroll processing.
Our sample company deducts Social Security, federal income tax,
Medicare, and state income taxes, all of which are calculated by
Peachtree Accounting based upon the appropriate tax table. The General
Ledger accounts affected by payroll checks are generally liability
accounts set up specifically to handle these kinds of deductions. You can
set up allowances, such as a gas allowance, that is manually entered for
an employee paycheck when applicable. Entering these kinds of
allowances here saves time and ensures that the proper account is
updated, no matter who in your office processes payroll.
If your payroll requires setting up additional payroll fields (for example,
401(k), vacation, employee tips, commission, and so on), refer to the
“Payroll” chapter of the User™s Guide. There are several examples you can
follow to set up payroll fields.
Peachtree Accounting comes with tax tables for all 50 states. You tell the
program the deductions and allowances you want it to calculate, and
which table(s) you use for these calculations.
The Memo check box is for payroll field amounts that are not posted to
your company™s books, but to the employee records (for example, meal
allowance and employee tips in the restaurant business).
Selecting the Run check box indicates that the amount in this field
should be carried forward to the next year (for example, vacation or sick
time).
3 Select the EmployER Fields tab.
These fields represent the employer portion of payroll entry including
Social Security, Medicare, federal employment, and state
unemployment.
If applicable, the company paid portion of State Disability (SDI) and
401(k) matching contributions can also be set up here.
We™re going to see how the information in the payroll fields is used,
together with the information stored in the employee file, when entering
and posting a paycheck.
4 Press Cancel to close the window.




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Lesson VI”Payroll
Maintain Employees


Maintain Employees
In Default Information, you indicate the general guidelines for processing
payroll for the whole company. In Maintain Employees, you give specific
guidelines for individual employees.
1 From the Maintain menu, select Employees/Sales Reps.




We™re going to look at two employees”one hourly and one salaried”
and then enter paychecks for each.
2 Select the lookup button beside the Employee ID field.

3 From the list, double-click MWANG-01”Michelle Wang.

4 Select the Pay Info tab.
Notice the following things about Michelle:
• She is an hourly employee.
• She is paid every two weeks (bi-weekly) at 80 hours per pay period.
• She is being paid $9.00 an hour (regular rate).
5 Select the EmployEE Fields tab.
Notice the similarities between this window and the Default
Information EmployEE Fields tab. The only difference is the presence of
the Std column (short for Standard). If Std check box is selected, the
employee is using the default setup for this payroll found in the
Employee Defaults window. If the Std check box is clear, then the
employee is an exception to the defaults.


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6 Move the cursor back to the Employee ID lookup list, if it™s not already
there.

7 Select employee DGROHS-01”Derrick Grohs. Select the Pay Info tab again.
Compare this employee to Michelle Wang. Derrick Grohs is a salaried
employee paid $1346.15 every two weeks.
Press q to close the window.
8


Payroll Entry
As we proceed to enter paychecks for these two employees, remember the
kind of information stored in Default Information, and in the Maintain
Employees file. We™ll see how important this preliminary information is, and
how simple payroll processing is once you™ve set everything up properly.
1 From the Tasks menu, select Payroll Entry.




In the Employee ID field, type MWANG-01 and press e.
2

3 To have the program print a check, leave the Check Number field blank by
pressing e.




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Lesson VI”Payroll
Payroll Entry


Accept the check Date displayed (3/15/03) by pressing e.
4
The Hours Worked, from the Maintain Employees window, are listed in
the bottom left of the window. The hours can be adjusted for this
paycheck, if necessary.
Notice that all the Employee/Employer Fields entered in the Default
Information display in the bottom right of the window. All of the fields
we asked the program to calculate for us”Federal Income, Social
Security, Medicare, and State Income”have been calculated, and display
as negative amounts (because they decrease the check amount).
Accrued Vacation (entered as a memo field) displays as a positive
amount but is present for record purposes. It does not affect the balance
of the paycheck. The EmployER field also displays (as a positive
number) to record employer taxes. This field also does not affect the net
amount of the check.

5 Save and post this paycheck, by selecting the Post button.

A Salaried Employee
In the Employee text box, type DGROHS-01 and press e.
6
Notice that Derrick has the same payment and deduction categories as
Michelle Wang. The only difference is he has a single Salary field where
Michelle™s record had three types of hourly rates.
Once everything is set up properly, payroll takes very little effort. Just
check the Check Date field and leave the Check Number blank to have
the program print a check. If no special adjustments need to be made,
save the record.

7 Save and post this paycheck, by selecting the Post button.

Press q to close the window.
8



Instead of entering one paycheck at a time, you could alternately enter a batch
of paychecks and print them at the same time by using the Select for Payroll
Entry option from the Tasks menu.
Note

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