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McGladrey LLP

7 Tips to Preventing Payroll Errors


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I read an article recently that provided tips to Prevent Payroll Errors.  Many of the tips correspond to features within Microsoft Dynamics GP.  

  1. Keep up to date with Laws and Regulations– In Dynamics GP2010, go to Microsoft Dynamics GP > Maintenance > US Payroll Updates > Check for Tax Updates.  Select either the Automatic or the Manual method.  The process will add the latest tax rate table or notify you that the table is up to date.  Once your tax table is up to date, check Dynamics GP CustomerSource to verify you have the latest tax code update.  Keeping Dynamics GP at the latest Service Pack ensures you have the latest tax code programming as well as fixing other issues the service pack addresses.  To check your version of Dynamics GP, go to Help > About Microsoft Dynamics GP and compare the Version information to the latest information available at CustomerSource.  To check the date of Last Tax Update, Last Tax Code Update and Last Modification  (last manual modification since the last tax update was installed) go to Microsoft Dynamics GP > Tools > Setup > System >  Payroll Tax. 
  2. Make your Form 941 deposits on time – Use the Reminder/Task feature on the homepage to set up task deadlines.  Give yourself enough time to beat the deadlines and get those Form 941 payments in on time.
  3. Classify Employees Correctly – Use the Employee Class field to identify Exempt versus Non-exempt employees.  If you already use the Employee Class for other purposes, use one of the user defined fields to track the employee classification.
  4. Report Fringe Benefits – Set up Benefit codes to track benefits that are can be considered taxable income.
  5. Ensure Social Security Numbers are correct– Use the Social Security Verification Service (SSNVS) (tinyurl.com/29ftfv).  This service matches SSN to employee name.  Up to ten SSNs can be entered manually or use the file upload method to check up to 250,000 SSNs.  Using SmartList you can generate a list of SSNs for the upload method.
  6. Process garnishments correctly – When setting up a garnishment deduction, make sure the Deduction Type is set to Garnishment, and then the Garnishment Category can be selected.  Once set up, you can use the Deduction Sequence window to prioritize the deductions.  Deduction sequences can be adjusted on an employee basis.
  7. Check your numbers– Even with automatic updates, it’s always a good idea to spot check the tax rates.  The IRS Circular E can be downloaded from (tinyurl.com/2lan6).  To compare the tax rates in Dynamics GP, go to Microsoft Dynamics GP > Tools > Setup > System > Payroll Tax.  The federal taxes are listed under the Tax Code FED.  Also check the recent changes in the FICA rates, Tax Code EFICS for the Employer FICA/Social Security and tax Code FICAS for the Employee FICA/Social Security.  They should be 6.2% and 4.2% respectively.

RSM McGladrey consultants are Microsoft Certified Business Management Solution Specialist for Microsoft Dynamics GP Payroll.  Our payroll and human resources systems implementations average from 500 - 2500 employees.  We understand the challenges with payroll implementations and have an implementation methodology with proven results.

RSM McGladrey helped regional staffing company streamlines payroll processand reporting through an implementation of Microsoft Dynamics GP.  With 48 full-time employees, 1480 active paid hires, and seven offices throughout New Jersey, Pennsylvania, and Delaware, this company turned to RSM McGladrey for an integrated Payroll and Human Resource Management Solutions.   

 Claude Frymark, McGladrey - Microsoft Dynamics Specialist for Microsoft Dynamics GP Payroll

by RS McGladrey, a New York City Microsoft Dynamics GP Partner

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