ACUMATICA END OF YEAR CHECK LIST

This document has been provided by Acumatica Cloud ERP.

This document provides best practices related to end-of-year payroll processes. Many procedures are designed to ensure smooth year-end tax reporting and preparation of employee W-2 and W-3 reports.

Before the last pay run of the year:

Perform these processes before the last pay run of the year.

*Note: If needed, you can process a pay run for the next year before performing the end-of-year tasks.

Verify Employer Data

Step 1: On the Tax Maintenance (PR208000) form, click Update Taxes on the form toolbar.

Step 2: Verify the accuracy of IDs for all tax jurisdictions in Acumatica ERP and Aatrix. If necessary, specify the Employer Govt. Tax ID setting in the View Tax Details dialog box, which you open by clicking View Tax Details on the Tax Codes tab of the Tax Maintenance form.

Step 3: Verify the employer unemployment rate and wage limits obtained from the tax provider.

Verify Employee Data

Step 1: Verify employee names, addresses, email addresses, and SSNs. Instruct the customer to have employees verify that their previous pay stubs contain correct personal data.

Step 2: By using the Taxes by Employee (PR641067) report and the Employee Taxes (PR4030P3) inquiry form, verify employee taxes to ensure that all appropriate jurisdictions are up to date.

Possible issues: If you are filing taxes for Pennsylvania, in specific Acumatica ERP builds, there was an issue when users could not retrieve Employee Residence PSD Code from the system, and it prevented them from sending the correct information to the tax collector. For more information about the affected builds and available workaround, refer to the Known issues: Users were not able to retrieve the Employee Residence PSD Code value from the system and it prevented them from sending the correct information to the tax collector article.

Step 3 (Optional): If an employee has been overpaid or underpaid, refer to the How to create a tax adjustment article for the information about how to adjust that.

Step 4: Review and verify the data related to employee earnings, taxes, and benefits, such as the following:

• • Bonuses, non-cash payments, company cars and parking
  • Voids and reversals

You can use the following generic inquiries to do this:

• • Employee Pay Rates and Earnings (PR4030P2)
  • Employee Deductions and Benefits (PR4030P4)
  • Employee Taxes (PR4030P3)

Step 5: Ensure that all prior paychecks and adjustments are released.

Step 6: Ensure that special tax items have been updated and submitted through the use of the reporting type on the Earning Type Codes (PR102000) and Deduction and Benefit Codes (PR101060) forms, including the following:

• • Bonuses
  • Other Compensation
  • Third-Party Sick Pay (paid only through Acumatica ERP)
  • Employee Business Expense Reimbursements
  • Taxable Fringe Benefits
  • Garnishments
  • Dependent Care Benefits, etc.

Step 7: Verify paid time off (PTO) balances on the Employee Payroll Settings (PR203000) form or by using the Paid Time Off Details by Employee (PR641050) report.

Note: If there are inconsistency in PTO balances, verify effective dates for PTO banks, and make sure the banks are active.

Possible issues:

1. 1. In specific Acumatica ERP builds, PTO balances, even if they are set up to be carried over, will not be carried over due to a known issue. For more information about the affected builds and available workaround, refer to the Known issue: After an upgrade of Acumatica ERP from 2021 R1 and earlier to 2021 R2 or 2022 R1, PTO bank information was cleared If the version of your Acumatica ERP site is listed in the Root causesection of the mentioned article, do not edit Effective Date to avoid the issue.
   2. In specific Acumatica ERP builds, if the Allow Negative Balancecheck box is cleared on the PTO Banks (PR204000) form (which means that the number of hours in the PTO bank cannot be negative), and if the Carryover Type box is set to Total or Partial on the same form, PTO bank hours are reset to zero at the beginning of the pay period on the Paid Time Off tab of the Employee Payroll Settings form. For more information about the affected builds and available workaround, refer to the Known issue: In Acumatica ERP 2021 R1 and earlier, PTO bank hours were reset to zero at the beginning of the pay period
   3. After a direct upgrade from Acumatica ERP 2020 R1 to Acumatica ERP 2021 R1 and later, previously available Total Accrual Hoursand Front Loading Hours settings on the Paid Time Off tab of the Paychecks and Adjustments form from the paycheck released before the upgrade did not appear in a new paycheck created after the upgrade. For more information about the affected builds and available workaround, refer to the After a direct upgrade from Acumatica ERP 2020 R1 to Acumatica ERP 2021 R1 and later, previously available Total Accrual Hours and Front Loading Hours values from the paycheck released before the upgrade did not appear in a new paycheck

Note: An accrual limit for a PTO bank is the maximum number of hours that are available for that bank. In other words, hours accrued can exceed the limit. The Accrual Limit box will be renamed in the future to better reflect its function.

Step 8 (Optional): If you need to adjust PTO balances, refer to the How to create adjustment paychecks for PTO article.

Verify Tax Data in Aatrix

Note: A user can process payroll for the next year even if the W-2 reports have not been completed.

Step 1: Verify employee email addresses for employee W-2 reports.

Step 2: Compare W-2 and W-3 reports (one report to verify in Aatrix).

Step 3: Compare W-2 with State and Local totals (one report to verify in Aatrix).

Step 4: Compare W-3 with tax deposits and the total of quarterly 941s (one report to verify in Aatrix).

Step 5: Verify that the FUTA deposit lines up with Form 940 (one report to verify in Aatrix).

Step 6 (Optional): If you need to submit a corrected W2 report already submitted from Acumatica ERP on the Government Reporting (PR504000) form, refer to the How to submit a correction for the W2 report that has been already submitted to Aatrix article.

Possible issues: 

1. 1. Refer to the Troubleshooting errors when generating reports on the Government Reporting formand Troubleshooting errors when generating W-2/W-3 reports on the Government Reporting form articles for the detailed list of issues that could happen during submitting W-2 and W-3 reports on the Government Reporting form.

Other End-of-Year Procedures

Step 1: Review terminated employees.

Step 2: Review the last pay period transaction date.

Note: It is not necessary to align the custom week that is set up in Time and Expenses with the pay periods or payroll calendar–they can  be different. A pay period is based on the transaction date, a custom week is based on a range. The system tracks the date of the time activity, so if you are paying an employee for a time activity, the payment will be made in the correct week of the pay period.

Step 3: On the Payroll Calendar (PR206000) form, generate and review pay periods for the next year.

Possible issues: 

1. 1. On the Time and Expense Preferences (EP101000) form, on theCustom Week Settings tab, custom weeks for the upcoming year should be generated if the custom week functionality used in order to process time-related documents for the next year. For more info, refer to the How to resolve the ‘Error: An error occured during processing of the field WeekID: EP Error: Custom Week cannot be found. Custom Week’s must be generated with date greater than …’ on a user’s attempt to process time-related documents
   2. On the Time and Expense Preferences (EP101000) form, if a user generated more than 100 weeks for a year by using the custom week functionality, and then tried to generate weeks for a subsequent year, the system displayed the error. For more information about the affected builds and available workaround, refer to theKnown issue: On the Time and Expense Preferences form, if a user had more than 100 custom weeks for a year, when a user attempted to generate custom weeks for a subsequent year, the ‘Another process has added the ‘EPCustomWeek’ record’ error occurred

After the last pay run of the year

The employee payroll settings will be updated after the processing of the first payroll. Therefore, if the Employee Payroll Settings (PR203000) form is showing zero amounts for PTO, that might be because there were no paychecks this year. To make sure this is the case, adjust the business date to the previous year and verify employee payroll settings.

Also…

For the list of Acumatica ERP builds containing latest changes to 1099 filling, as well as to the known issues related to 1099 reporting and their solutions, refer to the 1099-MISC and 1099-NEC updates for Tax Year 2022 page.

Your Next Steps

For additional information or assistance with your end of year closing procedures, contact the ACC Team! With over 25 years of industry experience, you’ll receive a team of knowledgeable software consultants. Contact our team for your FREE consultation!