My client, Elizabeth, had multiple payroll bookkeeping errors.

I always advise clients to never fall into payroll errors and never let them fester and go ignored as these usually can have a direct effect on a payroll tax form or even a payroll tax payment.

Elizabeth’s payroll bookkeeping errors were:

1. Using two different bank accounts to pay employees with.
   1. She would process the entire company’s payroll, within her payroll module, using one bank account, but writing paychecks using multiple bank accounts.
   2. Unfortunately, Elizabeth’s payroll software does not allow the bookkeeper to change/match bank accounts, per employee handwritten paycheck.
   3. This increased the difficulty of bank cash reconciliations later on; so to resolve this issue, the bookkeeper would have to make a manual journal entry to decrease the amount of funds in the bank account where paychecks were actually being cashed/cleared from, and increase the bank account where the original payroll was processed from but NOT being used to actually write the paycheck from.
2. Not filing her most recent quarterly payroll tax forms and payments on time.
   1. The first step I had to undertake was catching up on all bank reconciliations up to date to verify the absence of payroll tax payments, both to the IRS and Texas Workforce Commission.
   2. The next steps were to submit e-payments to the IRS for all payroll taxes due, both for the 941 and 940 (FUTA) forms, then turn around and process the quarterly 941 for Elizabeth to sign and mail in.
   3. My next step was to actually login to Elizabeth’s company Texas Workforce Commission account online to ascertain the exact filings and payment amounts due, then proceed to e-file from the payroll software (as this is easier) then, after two business days, log back into the TWC account online to pay all back taxes and late fees due, which was higher than what her payroll software was telling her due to the late fees plus the inaccurate tax rates previously entered into the payroll software as the state payroll tax rates usually renew/adjust each year.

Note: AccuraBooks is a bookkeeping firm only, so please consult with your C.P.A. for verification and clarification about the contents of this article.