payroll check uncashed
what is best way to void an uncashed payroll check from 04/13/10.
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a1_CJAdiSr4lwFacfA8pyY
12/20/10 2:48pm PST
Viewed by asker 12/20/10 2:59pm PST
Viewed by asker 12/20/10 2:59pm PST
6 Replies
qbteachmt
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12/20/10 2:51pm PST
Don't void anything.
If the employee still gets the money, then just reissue the check on a new #, keeping the original date. Handwrite the check, if you have to, for the original pay.
Then, edit the paycheck in QB to the new #. Then, create a Write Check, for the old check #, and Void it. It is only a placeholder for the check #.
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12/20/10 2:59pm PST
This is a former employee, no forwarding phone number, mail is returned, have no idea where this person is but this check continues to show up when I am reconciling bank statement and would like to get it cleared before year end.
12/20/10 7:28pm PST
In Massachusetts, and I suspect in other states as well, the employees check must be forwarded to the Department of Revenue Unclaimed Income Fund. There is a special process that must be followed. I recommend that you check with your state's department of Revenue before doing anything with the check. Even though you cannot locate the employee, it is still their money.
qbteachmt
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12/20/10 3:08pm PST
Then I would use Make deposit, posting to an Other Income account, for this amount. Next reconciliation, both transactions clear against each other.
Make sure to address these issues in a timely manner - 30 days out is more than enough, not 8 months out.
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12/21/10 9:51am PST
Based on the escheat laws of each state, this expense does not go away so you cannot just redeposit back as income. The amount of the paycheck gets forwarded to the state as that former employee's money. The W-2 remains unchanged so only the net check will be deposited back into the payroll expense account and then a like amount will be cut from that same account and sent to the state. It is probably not a good idea to forward it to the state until after W-2 time since all sorts of "lost" employees come out of the woodwork about then.
qbteachmt
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Questions answered: 43440
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12/21/10 11:01am PST
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The laws are why I noted you don't just void an uncashed paycheck. It impacts everything, including W2 and all liabilities paid and reported.
I explained how to account for it and fix the banking issue.
I did not go into the rules or regulations, State or otherwise. There are rules of how to deal with undeliverable W2s and how to deal with uncashed paychecks. These vary so much from locale to locale, there is no way ( and no reason) to address this issue in the QB forum.
By posting as Other income, you have the entry flagged separately and not dumped into your regular accounting data. Now you can easily bring it to the attention of your CPA, for appropriate handling.
When you first create a QB file, one of the account selections is Ask My Accountant. It is a great place to post everything you don't know what else to do with, so the accounting professional easily sees these issues.
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