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[Teresa Waters]

When we processed the last payroll an employee’s account was frozen and the funds rejected back to our bank.
Our bank says they can not do anything to try and resend the funds back now that the employees account has been fixed.
We only issue payroll checks out of that bank, so how best do you suggest that we get the funds to the employee?  And to have it documented so the auditors are happy?
Is there a way to set up a benefit code that can be used and not be taxed or be reported on the w2?
Thanks!
#HRandPayroll
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Teresa Waters
Controller
La Crosse Milling Company
Cochrane WI
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[Elaine German]

I would void that original payroll check and reissue it.?

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Elaine German
Accounting Specialist
Des Moines Area Regional Transit Authortity
Des Moines IA
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[Lorie Ponder]

HI Teresa,

I would void the original check and reissue a new check to the employee.. Easiest way to get the funds to the employee and have a clean audit trail for the auditors.

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Lorie Ponder
Director of Payroll
Hays U.S. Corporation
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[Teresa Waters]

The problem in voiding the entire check is that the rejected portion is only 1 account of the whole direct deposit.  The other 2 banks where the employee had funds going to cleared fine.

I’m hoping to talk with the bank further about the separate ach option.  The other thought was to do a separate benefit code that would add the funds back to the next payroll.  Or walking down to the bank and seeing about taking the $50 out as cash and giving it to the employee.

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Teresa Waters
Controller
La Crosse Milling Company
Cochrane WI
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[Lorie Ponder]

With is being a portion of the direct deposit and not the entire net pay. I would first ask: Does your company use same day ACH with your bank? If so, you can manually schedule the rejected funds to deposit into the employee correct account as an same day ACH. Do you have a miscellaneous after tax deduction code you could you process the payment through or have Accounts Payable issue payment. This would give you a paper trail for the auditors. 

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Lorie Ponder
Director of Payroll
Hays U.S. Corporation
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[Vanessa Halacsy]

In that case, yes, I’d definitely go with just sending a manual ACH separately for the part that was missed and keeping the original check intact.

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Vanessa Halacsy
Controller
Wooster Motor Ways, Inc.
Wooster OH
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[Vanessa Halacsy]

At our bank there’s a way to enter in an ACH manually; that way you would keep the check and everything as is in GP, you would just resend the net amount to the employee via a manual ACH. Then when you reconcile your bank account the original electronic check and the deposit where it was rejected back would net out to zero, and you’d reconcile the manual ACH as if it was the original payment to the employee.

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Vanessa Halacsy
Controller
Wooster Motor Ways, Inc.
Wooster OH
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[Diane Hays, CPA, MBA]

Good morning Teresa! 

Hope you are doing well! 🙂

A benefit never adds to the check amount so I don’t think that will help you. I would just issue a check from AP to handle it.

Warm regards,

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Diane Hays, CPA, MBA
Senior Consultant
Alta Vista Technology LLC
Chippewa Falls WI
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[Pamela Stephenson]

I would suggest issuing them a check.  Void the Direct deposit check, in payroll, then re-issue the payroll as a check instead of an ACH.  This will keep a direct record of the check number in payroll that you issued to this employee.

Or, if you want to leave the direct deposit information/check, you could issue the payment from accounts payable.  Just record the invoice in payables to some GL account.  Then record a deposit on the payroll checking account, to reconcile the ACH and the return of the funds to the bank account.

Just a few thoughts.

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Pamela Stephenson
Director of Accounting and Finance
Ashley Ward, Inc.
Mason OH
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[Tina Girdner]

Do you not have ACH access with your bank, where you could enter just that employee’s payroll info and have it sent back out?  If not, then you could void the employee’s pay and re-enter it and submit it to the banks ACH system.  With it being just the one employee, it should take less than a hour to void and reprocess the replacement payroll.  I hope one of these suggestions help.

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Tina Girdner
Tiffany Care Centers, Inc.
Mound City MO
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[Teresa Waters]

Thanks everyone!
Small town bank they do not do one off ach’s on a regular basis, but I talked them into doing it in this case.
Have a great day!

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Teresa Waters
Controller
La Crosse Milling Company
Cochrane WI
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