Title: Methods of Paying Employee Wages with Unanet Financials
This entry contains a brief overview of how Unanet clients can pay employee wages with Unanet Financials.
What’s covered in this document:
Exporting Unanet Timesheet Information to External Third-Party Payroll Providers
Most companies engage a third-party provider to process their payroll. Examples of these providers are ADP, Paychex, and Payroll Network. Unanet supports an integration with these and other payroll providers who can accept a file import. The basic process involves using Unanet export functionality to generate a file that is imported into the third-party payroll provider system. The processes are as follows:
- Obtain the format requirements for the import file from your payroll provider. Ideally, these requirements will provide column headers with descriptions of acceptable values for each field.
- Create the custom export template within Unanet to mirror the required format. Typically, this process will require mapping of key values in Unanet (e.g. Employee ID#, Pay Codes, etc.) to those values accepted by your payroll provider. If you are unfamiliar with Unanet export logic, we recommend reaching out to your Unanet Customer Success Manager or your Unanet Consultant for assistance. Your Unanet representative will coordinate a mapping discussion.
- Perform testing:
- Run exports from Unanet and review file. If the export file format does not meet expectations, revisit Step #2 above.
- Perform test imports/uploads via your payroll provider’s interface to ensure the format and values of the file are acceptable for import. If errors are received, revisit Step #2 above.
- Once the file has been imported successfully, validate the imported data via your payroll provider’s interface to ensure accurate and complete data was successfully imported. If errors are noted, revisit Step #2 above.
Once testing has been successfully completed, the custom Unanet export is ready for use.
- Generate the export file from Unanet
- Upload the file via your payroll provider’s interface into the payroll system
- Review imported data in the payroll system for accuracy prior to processing payroll
- After payroll is completed, a journal entry will need to be created in Unanet to capture items not originating from timesheets or expense reports (e.g. employer payroll taxes, bonuses, fringe expenses, etc.) This will reconcile the payroll liability account. Typically this would include the following steps:
- Receive a file from the third-party provider with the complete payroll information (this should include employer portion of payroll taxes)
- Reformat the file into a Journal Entry template and enter into Unanet. Options for entry of JE into Unanet include:
- JE Import
- Recurring JE functionality (including ability to copy a previous payroll JE)
- Review the Journal Entry and post in the appropriate period
Paying Employees Wages Through Accounts Payable
Sometimes a company may choose to keep its payroll processing in-house and pay employee wages through accounts payable. This scenario is less common and often only applies to relatively small organizations with a limited number of employees and tax jurisdictions. Under this method, the process is as follows:
- Set up each employee as a vendor organization, assigned to the legal entity that processes payroll
- The legal entity may or may not be the same as the person organization assigned on the employee's profile
- Payment terms should reflect the length of time between when the data will be uploaded to create the employee payables, and when the payment must be made
- Calculate employee's net pay outside of Unanet
- Use the Vendor Invoice import to create the employee invoices. The invoices will typically debit the wages/salaries payable liability account for the employees' net pay.
- Review, submit, and approve the employee invoices
- Issue payment through the Bulk Vendor Payment Creation function
- Standard system check from Unanet (paper check)
- ACH export to the bank (direct deposit)
- Create a journal entry to reconcile payroll
- Debit the remainder of the wages/salaries payable liability
- Credit the appropriate withholding and deduction accounts (FICA taxes payable, SIT taxes payable, medical premiums, etc.)