# General Business Category > Accounting Forum > [Question] Corrections to Payroll

## Ola

Hi All,

I need help again.

We have no payroll system, so everything is done manually on pastel. Im very new to this (Payroll), but I think I get how it works and what needs to be done.

So the lady that used to do this left in September 2018, so I have a years worth of catching up to do. My 1st challenge is how to fix/update the PAYE, UIF & other accounts, given the way previous transactions have been done.

When capturing the weekly wages in the bank cash book, the previous lady would enter the gross wage per employee, and then deduct PAYE, UIF & Union Fees etc. by doing additional (negative) payment entries to the applicable ledgers, using the same reference numbers. The result being the Nett Wage paid per employee reflected as a consolidated entry in the cashbook detailed ledger, which corresponds to the bank statement, and the employees wages ledgers reflect their Gross Wages paid, and then of course the PAYE, UIF & Union Fees all show up in their respective ledgers correctly. (Fine it works out, but I would have rather captured the total PAYE/UIF/Union Fees paid per month for all employees, instead of the effort she went through for each employee separately) 

Anyway, so the owner did the books himself from September 2018, and he posted only the Nett Wages paid every week to the respective employees wages accounts when recording the bank cashbook. No entries were ever posted to the PAYE, UIF & Union Fees ledgers. On the bright side, he did pay these fees every month, and recorded the payments correctly. 

My problem here is, how do I record the PAYE, UIF & Union Fees that are missing? Can I do journals to correct this, and what contra account(s) do I use? Or am I going to have to go back and redo the transactions in the cash books, by reversing them and re-entering them using the same reference numbers as they were done before with the negative payment entries?

Because the employees wages ledgers also now reflect their Gross Wages every week up until September 2018, thereafter it shows only their Nett Wages. Im assuming it needs to be the Gross Wages that need to be recorded?

Any help would be greatly appreciated!

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## Kevin Smith

Hi Ola

You ask how to record the PAYE UIF and Union Fees that are missing? If the fees were paid every month, and allocated as an expense on the income statement, the total of their net wages (per employee) and the fees paid reflect the Gross Salary Expense for the company. I would leave things as they are for the historical data and continue the same way for the rest of the financial year. At your next year end, you can change the way you record the entries, if it is a requirement.

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Ola (13-Sep-19)

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## Ola

Hi Kevin,

Thanks for your response. Yes the PAYE etc has been paid and allocated to the correct expense accounts, so it should then reflect the Gross Salary Expense when you add it up. However the accounts do not balance, are they not supposed to always be 0?

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## Kevin Smith

If you were processing information from a Payroll system and transferring it to the accounting software, you would debit the expenses and credit control accounts (Balance Sheet). When the payments were made to SARS, the employees, the union, etc, you would credit bank and debit the control accounts. The control accounts should be zero.

You are not using control accounts - you are just recording the expense portion in the income statement. They should have debit balances, reflecting the expenses.

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Alec Candiotes (14-Sep-19), Ola (18-Sep-19)

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## Alec Candiotes

Hi Ola

I agree with Kevin. The expense account in the income statement should not balance to zero. It is only if you use a control account principle in the balance sheet as a middle step. This must balance to zero.

Regarding your original question about wanting to capture PAYE, UIF etc as a single amount instead of individually as pre September 2018. I can completely understand why it was done this way. Because you have no payroll system, the detail was captured in Pastel to show a clear audit trail. 

If you still choose not to have a payroll system I would recommend you keep capturing individually. To speed up the process I suggest you make use of the Export/Import features in the cash book. 

Capture 1 full salary run per employee as the previous lady did in Pastel (Cash book payment) and then before you batch update, Export it. 



This then becomes your template going forward. You then open it in Excel (just make sure to select All files in the Open file window in Excel, as it is not an Excel file yet).



Once you have selected the file you will get the following screens:







Now you have it in Excel. Make sure to save it as a CSV file to ensure that it can import again into Pastel. 



You can now amend your values, periods, dates, descriptions and all in this environment quickly and import it into Pastel.

Ola in Excel it is a very finicky environment and needs a lot of attention so be sure to first create a copy of your live company to practice in. As they say practice makes perfect.

Once you have done it you save it and import it again through the relevant cash book payments through the Batch>Import button (found just above the Export batch button as shown above). What is cool about this is that you still have full control as the imported file will now be an open batch in your Pastel which you can still review as per normal before batch updating.

If you like this approach, I recommend you build this template into a capturing tool that automates dates, periods and the creation of the CSV file for you. We specialise in Excel tool development for Pastel if you do not know how to do raw VBA coding etc. So give us a shout if you need assistance here.

Hope this helps you.

Kindest regards,
Alec Candiotes CA(SA), MCom Taxation

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Ola (18-Sep-19)

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## Ola

> If you were processing information from a Payroll system and transferring it to the accounting software, you would debit the expenses and credit control accounts (Balance Sheet). When the payments were made to SARS, the employees, the union, etc, you would credit bank and debit the control accounts. The control accounts should be zero.
> 
> You are not using control accounts - you are just recording the expense portion in the income statement. They should have debit balances, reflecting the expenses.


Hi Kevin,

Apologies, what I mean is that my control account for our PAYE/UIF is not 0, it has a debit balance. When the PAYE/UIF payments were captured, they were allocated to the PAYE/UIF control account directly.  In the previous year, these payments were allocated to the PAYE/UIF expense account? I'm so confused now.

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## Kevin Smith

You will need to transfer the payments from the Balance Sheet to the income statement, else you wont be reflecting the expenses on the IS. Clear the control accounts to the expense accounts. Remember to un-tick the "This Year Transaction" checkbox under settings when you raise the entries for last year. Most people would say you need to reverse it in the cashbook and re-capture it correctly (always fix the entry in the sub-ledger where you made the error).You should have a "Payroll Journal" under process journals. Use that rather than reversing in the cashbook, so it is easier to track your entries.

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