Canadian Payroll: Optimizing Banked Sick Pay Accrual in Dynamics GP (Dollar-Based Example)
Effectively managing employee sick pay is a crucial aspect of payroll administration. Dynamics GP offers robust features to handle banked sick pay, ensuring accurate accruals and transparent tracking. This guide provides a step-by-step walkthrough of setting up and optimizing banked sick pay accrual in Dynamics GP, using a dollar-based example for clarity.
1. Setting Up a Banked Sick Pay Code¶
The foundation of banked sick pay management lies in establishing a dedicated banked pay code. This code acts as the primary mechanism for recording and displaying accrual information within the employee’s banked time window in Dynamics GP. Transactions associated with this code will directly populate the banked display window, providing a clear audit trail of accruals.
To initiate the setup, navigate to Tools > Setup > Payroll-Canada > Banked Paycodes. This path will lead you to the Banked Paycode Setup window, the central hub for defining your banked sick pay parameters.
Within this window, you’ll find several critical options that dictate how your banked sick pay operates. It is highly recommended to leverage the built-in help feature for a comprehensive understanding of each field. Click Help > About this window to access detailed explanations and guidelines.
A key decision point within this setup is the Calculate Based On field. Here, you must choose between Dollars or Units. Selecting Dollars signifies that accrual calculations will be based on a dollar value threshold, while Units implies a percentage-based accrual. For this example, we will proceed with the Dollars option, illustrating a scenario where employees accrue banked sick time based on their earnings.
2. Configuring a Relief Income Code for Banked Time¶
After establishing the accrual code, the next essential step is to create a relief income code. This code serves the purpose of deducting or “relieving” banked time when an employee utilizes their accrued sick leave. This ensures accurate tracking of available sick time and prevents overpayment.
To configure the relief income code, navigate to Tools > Setup > Payroll Canada > Income Code. This path opens the Income Code Setup window, where you can define various income codes used within your payroll system.
When creating the relief income code, it is paramount to assign it a Reference of Banked Sick Pay. This crucial association links the income code specifically to the banked sick pay functionality, enabling Dynamics GP to correctly interpret transactions using this code as reductions in banked time. This linkage is vital for maintaining the integrity of the banked sick pay balance.
3. Defining Banked Options in Payroll Control¶
With the codes established, the next stage involves configuring the overarching banked options within Dynamics GP’s Payroll Control settings. This area allows you to specify which types of time are eligible for banking, including statutory time, sick pay, overtime, and leave. Customizing these options ensures that the banked time functionality aligns precisely with your organization’s policies.
Access the banked options setup by navigating to Tools > Setup > Payroll Canada > Control > Banked. This sequence leads to the Payroll Control Setup window, specifically to the Banked tab.
Within the Banked tab, you will find checkboxes for Stat time, Sick Pay, Overtime, and Leave. Select the checkboxes corresponding to the types of time you wish to manage using the banked functionality. For the context of this guide, ensure that Sick Pay is selected to enable banked sick pay accrual. Carefully consider your organizational policies when making these selections to ensure accurate system configuration.
4. Employee-Specific Banked Sick Pay Settings¶
Having configured the system-wide settings, the next step is to tailor the banked sick pay functionality at the employee level. Within each employee’s record, Dynamics GP provides dedicated options to control banked sick pay accumulation and General Ledger (GL) accrual posting. These settings ensure that banked sick pay is managed according to individual employee parameters and integrated with your financial accounting.
To access these employee-specific settings, navigate to Cards > Payroll-Canada > Employee. Select the relevant employee record and then click on the VacSick tab. This tab houses the vacation and sick pay settings for the selected employee.
Within the VacSick tab, locate the Banked Sick Pay section. Here, you will typically find options such as:
- Accumulate Banked Sick Pay: Enabling this option activates banked sick pay accrual for the employee. Ensure this checkbox is selected to initiate the accrual process.
- Accrue to GL: This option determines whether banked sick pay accruals should be posted to the General Ledger. If your organization requires financial tracking of sick pay liabilities, enable this option. Consult your accounting policies to determine the appropriate setting for this option.
These employee-level settings are crucial for ensuring that banked sick pay is correctly applied and accounted for each individual within your organization.
5. Assigning Pay Codes to Employee Pay Code Tab¶
With the foundational setup complete, the next practical step is to assign the newly created banked sick pay code (BSICK) and relief code (BSICKR) to the relevant employees. This assignment links these codes to the employee’s pay record, enabling their use in payroll processing. Furthermore, you’ll need to configure specific parameters for the banked sick pay code, such as the accrual rate.
Navigate to the employee’s pay code tab, typically found within the employee maintenance window in Dynamics GP ( Cards > Payroll-Canada > Employee and select the Pay Codes tab). Assign both the BSICK and BSICKR codes to the employee.
After assigning the BSICK code, click the Update button adjacent to the code. This action opens the Employee Pay Code Maintenance window, allowing you to specify code-specific details. Since we opted for Dollars as the calculation basis in Step 1, we will define the accrual rate in dollar terms. In this example, we set the accrual to 1 unit for every $20 earned. This means for every $20 of eligible earnings, the employee accrues one unit of banked sick time. If you had selected Units as the calculation basis, you would instead enter a percentage-based accrual rate.
6. Initial Employee Banked Tab State¶
Before processing payroll, it’s beneficial to observe the initial state of the employee’s banked tab. This tab provides a real-time view of the employee’s accumulated banked time. At this stage, for a newly configured employee, the banked tab should typically be empty, reflecting no accrued banked sick pay.
To view the employee’s banked tab, navigate to Cards > Payroll-Canada > Employee, select the employee, and then click on the Banked tab.
An empty banked tab at this point is expected and confirms that no banked sick time has been accrued yet. This will change after the first payroll run that includes earnings for this employee.
7. Calculating a Salary Payrun¶
To initiate the accrual process, the next step is to calculate a regular salary payrun for the employee. This payrun will process the employee’s earnings and, based on the configured banked sick pay settings, trigger the accrual calculation.
Proceed with your standard payroll processing procedures in Dynamics GP to calculate a salary payrun for the employee. Ensure that the payrun date falls within a period where banked sick pay accrual is active.
8. Employee Banked Tab After Payrun¶
Following the salary payrun calculation, revisit the employee’s banked tab. This time, you should observe that the banked tab now reflects the accrued banked sick pay. Based on our example of 1 unit accrued for every $20 earned, and assuming the employee earned $20 in this pay period, the banked tab should display an accrual of 1 unit, corresponding to $20.00.
This updated banked tab confirms that the banked sick pay accrual is functioning correctly. The system has automatically calculated and recorded the accrual based on the employee’s earnings and the defined accrual rate.
9. Manual Adjustments and Direct Entry¶
Dynamics GP also offers the flexibility to manually adjust banked sick pay balances directly within the employee’s banked tab. This is particularly useful for handling historical accruals, correcting errors, or making one-off adjustments. You can directly add or delete lines within this window to modify the banked time balance.
To manually adjust, access the employee’s banked tab (Cards > Payroll-Canada > Employee > Banked tab). You can directly enter new lines to add to the banked time or select existing lines and delete them to reduce the banked time.
Important Note: If you have enabled the Accrue to GL option (Step 4), direct manual additions in this window will be restricted. This is to maintain the integrity of the GL accrual postings and prevent discrepancies between payroll and financial records. In such cases, adjustments affecting GL accruals should be made through payroll transactions to ensure proper accounting. However, deletions are generally permitted even with GL accrual enabled, allowing for correction of erroneous entries.
As an example of manual entry, if you key a quick transaction for 1 unit for $20.00 with a date of 6/1/2017, this transaction will be added to the banked time, and the banked window will reflect this new entry.
10. Utilizing Banked Time and Relief Codes¶
To utilize accrued banked sick time, you employ the relief income code (BSICKR) created in Step 2. When an employee takes sick leave and wishes to use their banked time, you enter a payroll transaction using this relief code. This transaction will reduce the employee’s banked sick time balance.
For instance, if an employee takes a day of sick leave, you would enter a quick transaction using the BSICKR relief code for the equivalent dollar value of their sick day (e.g., $20 in our example).
However, it’s important to note that when you process a payrun that includes a relief code transaction, Dynamics GP may also process a new accrual for the standard BSICK code in the same payrun if the employee has eligible earnings. This can result in both a reduction of banked time due to the relief code and an increase due to the regular accrual within the same payrun.
The employee’s advice slip will clearly show both the relief code usage and any new accruals processed in the payrun.
Reviewing the banked window after processing a payrun with a relief code will illustrate the net effect. You will see that a line item corresponding to the relief code usage (BSICKR) is deducted, effectively “netting” against a previous accrual line (e.g., the 6/1/2017 line in the example). Simultaneously, a new accrual line for the current pay period may be added if the employee earned eligible wages.
Important Limitation: Dynamics GP’s banked time functionality, in this context, does not explicitly track the “in and out” of specific used transactions in a detailed, linked manner within the banked window itself. While the advice slip provides a clear record of relief code usage, the banked window primarily reflects the net balance and the remaining accrual lines. For detailed transaction history, you would typically rely on payroll reports and potentially custom inquiries. In the example, the 6/1/2017 transaction is effectively removed from the detailed view in the banked window after being offset by the relief code, although it is documented on the advice slip. The system then maintains a running balance with any newly accrued time and any remaining carried-over balances.
By following these steps, you can effectively optimize banked sick pay accrual within Dynamics GP, ensuring accurate tracking, transparent reporting, and seamless integration with your payroll processes. This dollar-based example provides a practical framework for implementing and managing banked sick pay in your organization.
Do you have any questions or experiences with banked sick pay accrual in Dynamics GP that you’d like to share? We encourage you to leave a comment below!
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