QuickBooks Online Payroll Problem: Syncing “Pay Date” with end of “Pay Period” to make reporting correct.
Discussion of the Problem:
At the end of each pay period, payroll is processed. In this case, payroll is done on a semi-monthly basis, meaning that each payroll period ends on the 15th of the month and the last day of the month. That does not necessarily mean that payroll will be processed exactly on the 15th of each month and the last day of each month. Due to differences in time schedules based on crossing multiple time zones, payroll is necessarily not processed until late in the evening or on the following day. However, the “Pay Date” needs to be posted as having been done on the 15th of the month or the last day of the month respectively. This is true because QuickBooks Online payroll reporting is based on the posted “Pay Date”, not the last day of the “Pay Period”. Until about one month ago, QuickBooks Online payroll used to allow the bookkeeper to set the “Pay Date” to the end of the “Pay Period” rather than defaulting to the actual day when payroll is processed. Payroll reports would then correctly report the payroll amounts in the correct “Pay Period”. This is especially important at the end of each calendar quarter when IRS and state unemployment reporting is required.
As of about one month ago, someone made a change in the payroll subroutines that inserts an error message in the processing steps that states “Tax penalties may apply……You’ve picked a pay date that may cause you to make a late tax payment and incur a penalty. Try choosing a date closer to today’s date”. The real problem is that you cannot finish processing payroll until the “Pay Date” is changed to match the current date which may actually be the day after the end of the “Pay Period”. When the bookkeeper inputs the current date rather than the end of the “Pay Period” date, the reporting is thrown into the wrong reporting period.
QuickBooks Online payroll “Help” suggested that one go ahead and process the payroll with the incorrect date and simply request the “Help” folks correct the dates via a phone call to the “Help Desk”. That is nothing more than a work around, not a solution to the problem. If a company has 50 or 100 employees, that work around suggestion is totally ridiculous.
Potential Solutions:
There are several possible solutions to the problem. The ones that I have suggested are as follows and require changes in subroutine coding:
- Remove the error code from the active processing of payroll and make it an advisory message only so that it does not affect the processing of payroll.
- Allow the input of the “Pay Date” to match the date of the end of the “Pay Period” so that payroll amounts are properly reported in the proper payroll periods.
- Change the reporting to base reports on the date of the end of the “Pay Period” rather than on the “Pay Date”.
- Allow the user to “Edit” the “Pay Date” after payroll processing rather than having one necessarily have to contact the Help Desk to effect such changes.
Of the four solutions presented, I have ranked them according to desirability as follows:
2 – Best
3 – Good
1 – This is best combined with either 2 or 3 and is not necessarily a solution on its own without 2 or 3 above.
4 – Least desirable solution depending on how many employees a company has.
