AP aging and payroll liabilities review
Reviewing the AP aging against prior period, payroll and 401(k) liability reconciliations, and the bonus accrual.
Source: Rackson_RRS_RCY_Review_Process.docx sections 23 and 24.
Accounts payable aging
Review the AP aging against the prior period. Confirm that most variances are explained by normal timing — a bill posted in the following period rather than the current one.
Illustrative example. A small aging difference of roughly $25–$26 was traced to a bill that posted in the next period — a normal and expected pattern, not an error.
Certain vendors are subject to ongoing payment negotiations that the client (Caleb) monitors closely. Be aware of which vendors fall into this category so their aging isn't mistaken for a processing error on PBI's side.
At year end, aging items that were left as timing throughout the year should be revisited to confirm they actually cleared as expected rather than continuing to roll forward indefinitely.
Step-by-step checklist
Check whether it is explained by a bill posting in the following period.
Check aged vendors against the list of vendors known to be in active payment negotiations (Caleb) before treating aging as an error.
Confirm they cleared.
On the close checklist, the AP Processing Cutoff is a WD3 task. AP closes for payment processing on Thursday of close week — once that happens the check date should not move.
Payroll-related liabilities
Payroll liability and 401(k) reconciliations follow PBI's standard approach used across other clients: tie the funding and liability accounts, and investigate any outstanding items such as uncashed AP or payroll checks.
Aged payroll checks are common and are generally left to the client's own process (Mike) to resolve up to a point, rather than PBI writing them off unilaterally.
Bonus accrual
The client (Mike) sends the bonus schedule each period, which includes the previous period's detail with the current period highlighted.
How it's booked
PBI records the adjustment through a standing/recurring journal entry:
In Intacct, go into the prior month's bonus entry and duplicate it.
Update the memo lines to match the new period's descriptions from the client's file — the memo/description column in the client file maps directly to what goes in the JE memo.
Check the client's schedule against the existing entry's line items to confirm nothing is missing.
Before finalizing.
Illustrative example (RCY/Dave's). There were only two adjustments for one period, one of which related to an executive's departure and a related pro-rated bonus true-up of roughly $175 per the schedule. Confirm any personnel changes like this are reflected in the entry before finalizing.
On RRS, bonus adjustments have not been made since Period 2 this year. The cadence has become more sporadic than the prior practice of adjusting monthly for both concepts. This is flagged as an open item to follow up directly with Mike — see Open items.
Step-by-step checklist
To the funding detail; research any uncashed AP or payroll checks.
Duplicate the prior period's recurring journal entry as the starting point.
To match the client's schedule, cross-referencing each line.
Departures and new hires, before finalizing the entry.
Since Period 2. If not, note it as outstanding rather than assuming no adjustment is needed.
Fuller mechanics of the bonus entry — the file structure, the G&A-versus-store-level question, and the cadence transition — are on Labor reclass and bonus. On the close checklist, Bonus Accrual is a WD7 task.
Related
- RRS AP and credit cards workpapers — the 20000 AP aging preparer steps
- RRS payroll and accruals workpapers — the 21000/22100/21600 and 21800 preparer steps
- Labor reclass and bonus review
- Weekly ACH bank file upload — how approved AP reaches the bank