: Master Builder 11.x and earlier, 12.x, 13.x, 14.x, 15.x
Some of our clients have a hard accounting period close. That is, once an accounting period has been closed, there are no additional corrections or transactions allowed to that period.
In the case of payroll, a hard close means that a payroll record posted in a prior accounting period must be voided in the current period. Master Builder does allow for this. When the user selects to void a payroll record, Master Builder prompts the user to select one of two options:
Ledger transaction found for this payroll record. Do you want to have the existing transaction altered to “Void”? (Answer ‘No’ to post a new, reversing transaction.)
If the user selected the option ‘No’, Master Builder does not void the original payroll record. Instead, there is a series of transactions that are completed to create a reversing entry in the current accounting period.
How Does Master Builder Reverse/Void a Payroll Check
When a payroll check is reversed in a period other than when it was posted, a second GL entry is made in the current period reversing the original entry, however the job costs are handled a little differently. When the user completes a payroll reversal – including the posting of the payroll record after reversing, the related records look like this:
General Ledger Records
Job Cost Entries – The original job cost entries (6-3 screen records) linked to the original payroll record are modified:
What is the Impact of the Reversal Process?
The consequences of the process that Master Builder uses is that the job costs are reduced in the original accounting period but the direct costs posted to GL are the same – creating a reconciliation difference between the GL and job costing. The same is true for the reversal period, there is a GL entry with a credit to the direct costs, but no matching job costs (as the job costs associated with the GL entry are voided, not reversed).
There is also an impact to union reporting where hours originally reporting in one period would no longer be linked, so if the report is re-printed it would no longer match the original report.
Recommendation to Master Builder Developers
The Master Builder developers should consider modifying the reversal process so that the original job costs are reversed in the voiding period just like the GL entry is done. This would solve all of these issues described in this article.