Quarter Processing: Closing the Quarter - ADP · Quarter Processing: Closing the Quarter Handout Manual ... with tax reports, providing you with the tools and knowledge necessary

Quarter Processing:

Closing the Quarter

Handout Manual

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Published by ADP Enterprise Learning

May 2018

PREFACE

Copyright 2009–2018 ADP, LLC iii V05181834587_4NH

Contents

Quarter Processing: Closing the Quarter

Course Introduction ....................................................................................................... 5

Course Purpose ....................................................................................................... 5

Course Objectives .................................................................................................. 5

Course Agenda ....................................................................................................... 5

Follow-Up Items .................................................................................................... 6

Adjustment Payrolls ...................................................................................................... 7

Overview ................................................................................................................ 7

What Is an Adjustment Payroll? ............................................................................. 7

How to Avoid an Adjustment Payroll .................................................................... 8

Common Reasons for Adjustment Payrolls ........................................................... 8

Setting Up the Payroll Schedule Job Aid ............................................................... 9

Submitting Previous Quarter Adjustment Payroll Entries.................................... 13

Topic Summary .................................................................................................... 14

Knowledge Checks ...................................................................................................... 15

Reconciliation .............................................................................................................. 16

Overview .............................................................................................................. 16

What Requires Reconciliation? ............................................................................ 16

Reconciling Your Reports .................................................................................... 16

Reconciliation Checklists ..................................................................................... 18

How to Calculate Taxable Wages ........................................................................ 19

Practice: Using the Master Control to Calculate Taxable Wages ........................ 20

Learning Activity: Calculating Taxable Wages ................................................... 21

What Other Resources Are Available? ........................................................................ 22

Course Closing ............................................................................................................ 23

Continuing Education Credits .............................................................................. 23

Training Evaluation .............................................................................................. 24

Quarter Processing: Closing the Quarter (34586_4) ............................................ 25

PREFACE

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Copyright 2009–2018 ADP, LLC 5 V05181834587_4NH 11

Course Introduction

Course Purpose

This course introduces you to processing adjustment payrolls and reconciling payroll reports

with tax reports, providing you with the tools and knowledge necessary to successfully close

each quarter.

Course Objectives

Upon completing this course, you will be able to do the following:

Describe the types of adjustment payrolls.

Determine how to set up a previous quarter adjustment payroll in ADP Workforce

Now Current Version.

Identify considerations unique to submitting previous quarter adjustment payroll

entries.

Determine how to reconcile payroll reports with quarterly tax reports and quarterly tax

reports with annual tax reports.

Determine how to calculate taxable wages.

Course Agenda

This course includes the following topics:

Adjustment Payrolls

Reconciliation


Follow-Up Items

List any follow-up items that you may need to discuss with your client support specialist or

implementation specialist:


Adjustment Payrolls

Overview

In this topic, you will learn about the different types of adjustment payrolls that you can

process to ensure your payroll data is included in the proper quarter.

What Is an Adjustment Payroll?

An adjustment payroll is a payroll that is processed to update or to correct a previous quarter.

What Type of Adjustment Is Needed?

Previous quarter adjustment reclose payroll (with no amendment)

Previous quarter adjustment amendment payroll

Amendment (after the previous quarter payroll deadline has passed)

Types and Descriptions

Type Description

Previous quarter

adjustment reclose

payroll

An adjustment payroll that you process between the last payroll of the quarter

processing and the previous quarter adjustment reclose deadline to correct the

previous quarter.

Previous quarter

adjustment

amendment payroll

An adjustment payroll that you process between the day after the previous

quarter adjustment reclose deadline and the previous quarter adjustment

amendment deadline to correct the previous quarter.

Amendment An adjustment that you process after the previous quarter payroll deadline to

correct a quarter that has already closed.

Penalties for Late Deposits

Late deposits can result in the IRS imposing the following penalties*:

2% penalty for deposits 1–5 calendar days late

5% penalty for deposits 6–15 calendar days late

10% penalty for deposits 16 or more calendar days late

* You will be responsible for all penalty and interest charges incurred as a result of late

deposits.

Important Information

If you do not use ADP's Tax Filing Service, you can process adjustment payrolls. However,

you are responsible for amending and filing corrected returns to the various taxing

jurisdictions.


How to Avoid an Adjustment Payroll

Before your last payroll of the quarter, make sure you have done the following:

Scheduled adequate time to verify your Master Control before ADP processes quarter-

end reports

Included the following:

Manual checks

Voided checks

Bonus pays

Address changes

Social Security number changes

Special compensation options

Common Reasons for Adjustment Payrolls

Common reasons for processing an adjustment payroll include the following:

An employee moved from one state to another state in a previous quarter, but the

employee's state coding was not changed until the current quarter. The employee's

wages for the previous quarter need to be updated to reflect the correct state coding.

Special compensation options—such as third-party sick pay and long-term disability—

were not entered for an employee before or with the last payroll of the year.

An employee has negative year-to-date taxable wages.


Setting Up the Payroll Schedule Job Aid

Follow these instructions set up the previous quarter adjustment payroll schedule in ADP

Workforce Now Current Version.

Instructions

Step Action

1 Select Process > Payroll > Payroll Schedule.

Result: The Payroll Schedule page is displayed.

2 Click Add New Payroll.

Result: The Choose Payroll Type page is displayed.


Instructions (cont.)

Step Action

3 On the Choose Payroll Type page, select the Previous Quarter Adjustment card.

Result: The Previous Quarter Adjustment page is displayed. Depending on today's date in

relation to the previous quarter adjustment reclose and amendment payroll processing

deadlines, the messaging on this page (and the availability of being able to successfully

schedule a Previous Quarter Adjustment) will differ.

4 After reading the information displayed, click Next.




Step Action

5 Enter the Payroll In and Payroll Out dates; they must be after the last day of the quarter. Enter

the Adjustment Reasons.

6 Scroll down on the Payroll Schedule page. The Deduction Groups and Special Effects fields are

read-only; only ADP associates can make changes to these fields.

In the Authorization field, click the Previous Quarter Adjustment Authorization link.

Result: The Previous Quarter Adjustment Authorization page is displayed.



Step Action

7 After reviewing the information, including fees, click Accept.


8 Click Done.

Result: This concludes the process of setting up the payroll schedule.


Submitting Previous Quarter Adjustment Payroll Entries

When adding a previous quarter adjustment paydata batch, certain options are unavailable,

including:

Add New Template

Select the paydata template to use

Use this batch in the future

Copying standard hours and regular earnings

The page shown here represents the options displayed when adding a previous quarter

adjustment paydata batch.

The Paydata page for the batch is restricted to Memo columns, as shown here. Additional read-

only columns or memos may be inserted as needed.


Submitting Previous Quarter Adjustment Payroll Entries (cont.)

Additional information about submitting previous quarter adjustment payroll entries includes

the following:

Live pays are not permitted on previous quarter payroll adjustments.

For manual checks and reversals, check payable to employee and check payable to

company are disabled.

Masterfile entries that are not permitted on previous quarter adjustments:

o Home Dept. number

o Data Control number

o Clock number

Topic Summary

Now that you’ve completed this topic, you should be able to:

Describe the different types of adjustment payrolls that you can process to ensure your

payroll data is included in the proper quarter

Set up the previous quarter adjustment payroll schedule in ADP Workforce Now

Identify considerations unique to submitting previous quarter adjustment payroll

entries.


Knowledge Checks

Question

1 When setting up a previous quarter adjustment payroll schedule, what date do the Pay Date and

Period End Date default to?

a. Today’s date

b. The first day of the previous quarter

c. The last day of the previous quarter

d. The date the period started

2 If your previous quarter adjustment involves corrections for overstated Federal Social Security,

Medicare Tax/Surtax, and/or wages, which reason code(s) must you select from?

a. A1-A4

b. 1E-1G

c. 1A

d. 2G-2I

3 Where can you find a link to the fees associated with a previous quarter adjustment payroll?

a. In the Adjustment Reasons area of the Payroll Schedule page

b. On the ADP Workforce Now home page

c. In the Special Effects area of the Payroll Schedule page

d. On the Previous Quarter Adjustment Authorization page


Reconciliation

Overview

In this topic, you will learn about the items that require reconciliation and how to compute

taxable wages. In addition, you will be provided with quarter-end checklists to help you

reconcile each quarter.

What Requires Reconciliation?

The information that you should reconcile throughout the year includes the following:

Current payroll

Tax deposits per payroll

Quarterly federal tax deposits

Unemployment tax deposits

Annual Forms W-2

Reconciling Your Reports

You should reconcile your payroll reports with your quarterly reports to ensure that the

amounts match at the end of each quarter. At the end of the fourth quarter, you should also

reconcile the amounts on your quarterly reports with the amounts on your annual reports.

Reconciling Payroll Reports with Quarterly Reports

Report What Amounts Should Match?

Master Control Quarter-to-date employee amounts for the last payroll of the quarter should

match the quarter-to-date amounts on the Wage & Tax Register.

Year-to-date employee amounts for the last payroll of the year should match

the year-to-date amounts on the fourth-quarter Wage & Tax Register.

Payroll Summary

(Statistical Summary)

The sum of all of the payrolls' federal tax deposit amounts for each quarter

should match the amounts on the quarterly Statements of Deposits & Filings

and on Form 941.

The sum of all of the payrolls' federal, state, and local tax and taxable

amounts for each quarter should match the amounts on the Company Totals

page of the Wage & Tax Register and on the quarterly Statement of

Deposits & Filings.

The sum of all of the payrolls' state unemployment amounts for each quarter

should match the amounts on the Company Totals page of the Wage & Tax

Register and on the Quarterly Wage Report.


Reconciling Quarterly Reports with Annual Reports

Report What Amounts Should Match?

Wage & Tax Register Year-to-date employee amounts from the fourth quarter should match the

amounts on Form W-2.

The fourth-quarter, year-to-date amounts on the Company Totals page

should match the amounts on the annual Statement of Deposits & Filings,

Form 940, and Form W-3.


Reconciliation Checklists

Payroll Checklist

Item Have I Verified That

1 The Master Control company totals for the quarter match the cycle totals?

2 The pay date and period-ending dates are correct?

3 All employees have a valid Social Security number?

4 No employee indicates Applied For in the Social Security Number field?

5 All manual and voided payroll checks were entered in a payroll?

6 A taxable block and tax withheld are not both present (only one or the other)?

7 Third-party sick pay information has been entered?

8 All employees have positive wages (except for other compensation) on the Master Control?

9 All employees' quarter-to-date wages are less than or equal to the year-to-date wages on the

Master Control?

10 Special compensation option accumulators are displayed on the Master Control and updated

information is contained within employee totals?

11 ADP has been notified of any tax notices/tracers (only if you use Tax Filing Service)?

Quarter-End Checklist

Item Have I

1 Reviewed the Error Notification System to verify the accuracy of the payroll records (if

applicable)?

2 Verified the Quarterly Tax Verification Letter?

3 Verified that the quarter-closing dates that ADP has on file are accurate?

4 Entered all adjustments before the processing of the last payroll of the quarter?

5 Notified ADP of any new tax jurisdiction information?

6 If you use iReports: Reviewed the Preview Page and Tax Register to ensure that no Credit

pages exist within the reports?

Credit Condition Checklist

Item Have I

1 Reviewed the quarterly tax reports upon receipt?

2 Determined whether credit pages exist?

3 Identified the type of credit?

4 Identified which employees are affected?

5 Determined the cause of the credit situation?

6 Identified which reports are affected?

7 Contacted my ADP service team to discuss available options?


How to Calculate Taxable Wages

Federal Taxable Wages, Tips, and Other Compensation

Gross earnings (includes taxable fringe benefits and tips)

– Federal tax-exempt wages

– Deferred compensation

– Meals

– Cafeteria 125 benefits (may vary based on the benefit)

+ Group term life insurance (cost of coverage more than $50,000)

+ Third-party sick pay

+ Other compensation

= Wages, tips, and other compensation

Social Security Taxable Wages


– Social Security exempt wages

– Meals




= Social Security wages

Medicare Taxable Wages


– Medicare exempt wages

– Meals




= Medicare wages


Practice: Using the Master Control to Calculate Taxable Wages

Instructions

Use the sample Master Control to answer the following questions about Frederick Parks’s

taxable wages.

Questions

1. Which types of special compensation options does Frederick have that impact his federal

taxable wages?

______________________________________________________________________

2. Is 401(k) subtracted from or added to his gross pay?

______________________________________________________________________

3. Is group term life subtracted from or added to his gross pay?

______________________________________________________________________


Learning Activity: Calculating Taxable Wages

Instructions

Calculate the taxable wages for each scenario using the steps in the How to Calculate Taxable

Wages section of your handout manual.

Scenario 1

Calculate the federal, Social Security, and Medicare wages for John Smith using the following

year-to-date figures:

Gross earnings: $10,296.00

Other CAFE 125: $90.00

401(k): $617.76

Federal taxable wages = _____________________________________

Social Security taxable wages = _______________________________

Medicare taxable wages = ____________________________________

Scenario 2

Calculate the federal, Social Security, and Medicare wages for Mary White using the following

year-to-date figures:

Gross earnings: $29,782.00

Other CAFE 125: $320.00

401(k): $1,786.92

GTL premiums (more than $50,000): $32.00

Third-party sick pay: $500.00

Federal taxable wages = _____________________________________

Social Security taxable wages = _______________________________

Medicare taxable wages = ____________________________________

Topic Summary

Now that you’ve completed this topic, you should be able to:

Identify items that require reconciliation.

Use quarter-end checklists to help you reconcile each quarter.

Compute taxable wages.


What Other Resources Are Available?

You’ve learned about many enhancements to ADP Workforce Now today. It’s unlikely that

you’ll remember all of the changes, so you need to know where to look when you need help

after class.

Access The Bridge

The Bridge is an online community for payroll and HR professionals where you can ask

questions, share knowledge, make connections, and learn how professionals like yourself are

getting more from their ADP solutions.

You can log on to The Bridge directly from ADP Workforce Now by clicking The Bridge icon

at the top of any page, or you can simply enter TheBridge.adp.com in your Internet browser.

All you need to log on is your ADP Workforce Now credentials.

Quarter-End Resources on The Bridge

To learn more about quarter-end tasks and deadlines, visit the Workforce Now Quarter- and

Year-End page on The Bridge.


Course Closing

Continuing Education Credits

ADP is an approved provider of recertification credit hours (RCHs) by the American Payroll

Association (APA) and continuing professional education (CPE) credits by the National

Association of State Boards of Accountancy (NASBA). Most ADP courses are eligible for

RCHs and CPE credits.

RCHs and CPE credits provide recognition for updating or broadening professional

competencies and may be used to maintain certifications such as the Certified Payroll

Professional (CPP), Certified Public Accountant (CPA), or the Society for Human Resource

Management (SHRM). Professional organizations establish their own certification procedures,

which are subject to change.

Professional organizations often require documentation of class objectives, agenda, and

duration, along with a certificate of completion. This information is provided at the end of your

handout manual. At your request, your instructor will provide you with a certificate of

completion at the end of this class.


Training Evaluation

Please take a moment to complete the evaluation.

ADP Course Description

Quarter Processing: Closing the Quarter (34586_4)

Program Content

This course prepares participants to successfully close each quarter. Topics include adjustment payrolls and reconciliation.

Objectives

Upon completing this session, participants will be prepared to do the following:

Describe the types of adjustment payrolls.

Determine how to set up a previous quarter adjustment payroll in ADP Workforce Now Current Version.

Identify considerations unique to submitting previous quarter adjustment payroll entries.

Determine how to reconcile payroll reports with quarterly tax reports and quarterly tax reports with annual tax reports.

Determine how to calculate taxable wages.

Audience

This course is intended for those participants who are responsible for reconciling payroll each quarter.

Prerequisites

None

Advance Preparation

None

Participant Materials

Participants will need to download or print the Quarter Processing: Closing the Quarter handout manual before attending class.

Method of Presentation

Virtual class (VC), Group Internet Based

Duration

1 hour

Continuing Education Credits

This course may be eligible for the following recertification credit hours (RCHs) and continuing professional education (CPE) credits:

RCH: 1.0

CPE: 1.0

Note: ADP is unable to grant formal RCH and CPE credits to a participant logged on to class through a mobile device. For more information, see the Training Policy.

In accordance with the standards of the National Registry of CPE Sponsors, CPE credits have been granted on a 50-minute hour.

ADP, LLC, Employer Services, is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

In accordance with the American Payroll Association (APA), recertification credit hours (RCHs) apply to Certified Payroll Professional (CPP) and Fundamental Payroll Certification (FPC) credentials.

Recommended Field of Study (NASBA)

Specialized Knowledge and Applications

Cost and Training Policy

For information about course cost, registration, and cancellation policies, refer to the Training Policy.

Learning Records and Privacy Policy

Learner records are available on Learn@ADP within 24 hours after participants complete their training classes. To access learner records, refer to these instructions.

View ADP's Privacy Policy on Learn@ADP.

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Quarter Processing: Closing the Quarter - ADP · Quarter Processing: Closing the Quarter Handout Manual ... with tax reports, providing you with the tools and knowledge necessary