How to enter Payroll Beginning Balances in Dynamics AX for a New Implementation
The steps below shows how and where to setup Payroll Beginning Balances for earning codes, deductions, benefits, and taxes. This information is valuable for Partners trying to migrate or transfer data for a new Dynamics AX customer implementation from another system. As a pre-requisite before entering beginning balances for AX Payroll, it is suggested to have the following:
1. Workers or Employees are all available in the system
2. The following are setup and assigned to workers or employees in the system:
•Pay cycles and pay periods
•Earning codes
•Taxes
•Benefits and Deductions
3. The company should have chosen a date where payroll beginning balances can be set.
4. Information were gathered on all earnings, benefits/deductions, benefit contributions, employee taxes, and employer taxes and their YTD amounts from the legacy system.
When planning your beginning balance transition, you will want to determine how granular you need your data. Most customers decide to bring the pay statement data over as a consolidated year-to-date value, however in some cases they may want to bring it over in quarter increments. Identifying this will determine how many manual pay statements will need to be created for each worker. If you are doing YTD transition, then only one manual statement is needed per worker. To do this you will use the YTD amounts from the final pay statement of the legacy system as the amounts you enter into the manual pay statement in AX.
The example below shows how this can be accomplished in entering employee payroll beginning balances - earning codes, benefits/deductions, and taxes. In a real world example you would have a line item for each earning code, benefit deduction, benefit contribution, employee tax and employer tax with the amount entered being the YTD amount. Using that list of codes and amounts, follow the steps for creating a manual earning and pay statement with accounting disabled to bring over beginning balances for payroll purposes. You disable accounting as you do not want to post this beginning balance pay statement to the GL. That was done in the legacy system and will come over to AX in your General Ledger beginning balance load.
Note: If you want to reproduce the same steps below, you can use the Demodata and login to USMF company. The Demo data can be downloaded on PartnerSource: https://mbs.microsoft.com/partnersource/northamerica/sales-marketing/demo-tools/virtual-machines/AX2012DemoToolsMaterials
A. How to setup Earnings Code to be used on Payroll Beginning Balances
When you enter Payroll Beginning Balances, be sure you have earnings code that have Rate basis = Flat amount and Unit of measure = Each. This is the only available earning code classification/setup on where you can create manual pay statements. Be sure to setup this before you begin entering payroll beginning balances. You can set up Earnings code by going to: Payroll > Setup > Earnings code.
B. Create Earnings statement for an employee to have a Beginning Balance
This step creates earnings statement for the last pay period of the legacy system for each worker manually creating the earning statement lines in AX. Enter one line per earning code and the YTD amount and hours. Below are sample steps:
- Go to: Payroll > Common > Earning statements > Earnings statements
Click Earnings Statement > New.
Enter the following:
Worker Michael Redmond
Pay cycle sm
Pay period 6/16/2014 - 6/30/2014
2. Go to: Earnings Statement Line Tab. Enter the following:
Line 1:
Earning Statement Line Tab
Earnings Code RegularPay
Quantity 1.00
Unit Type Each
Rate 30,000.00
Line Details Tab
Manual (marked)
Line 2:
Earning Statement Line Tab
Earnings Code Bonus
Quantity 1.0000
Unit Type Each
Rate 4250.00
Line Details Tab
Manual (marked)
Line 3:
Earning Statement Line Tab
Earnings Code Commission
Quantity 1.0000
Unit Type Each
Rate 1,299.00
Line Details Tab
Manual (marked)
NOTE: Marking Manual checkbox setting in the Line Details tab for each Earnings statement line is key to have payroll beginning balances entered in the system for each worker.
3. Click Earnings Statement > Release Earnings statement
4. Click Earnings Statement > Pay Statement. Generate pat statements form opens. Set the following:
Payment date 06/30/2014
Payment run type: Manual
Disable accounting (marked)
(Note: This is only available when the payment run type is manual and wherein the user want to disable accounting on the pay run).
Click OK and close Infolog.
Why Disable Accounting checkbox needs to be turned on when generating pay statements?
This prevents any lines in the pay statement from being distributed and posted to the General Ledger. You do not want to post this beginning balance pay statement as its values are already in the GL from the legacy system. This balance loading is used for reporting and limiting purposes only.
C. Create Pay Statement for Employees
- Go to: Payroll > Common > Pay statements > All Pay statements
- Highlight the last generated pay statement for Michael Redmond
- Click Pay Statement > Edit. Pay Statement form opens.
- Go to Benefits calculations tab.
- Go to Benefit deductions fast tab and Enter the following:
Benefit Deduction amount
401K |Participate 3000.00
Dental | SubSp 495.00
Dep care spending | Participate 2500.00
Vision | SubSp 500.00
6. Go to Benefit contributions fast tab and Enter the following:
Benefit Contribution amount
401K |Participate 3000.00
Dental | SubSp 495.00
Vision | SubSp 500.00
7. Go to Tax calculations tab.
8. Go to Tax deductions fast tab and Enter the following:
Tax Code Deduction amount
USA-FED-ER-FICA 1600.00
USA-FED-ER-MEDI 825.75
9. Go to Tax contributions fast tab and Enter the following:
Tax Code Deduction amount
USA-FED-ER_FUTA 1800.00
USA-FED-ER-MEDI 500.00
USA-AZ-ER_SUTA 950.00
10. Click Save.
11. Click Finalize.
Important: Validate the totals of the pay statement that they match the YTD of the legacy system for the worker. You may want to hold off on finalizing in the next step to do some overall validating of all pay statements in aggregate. Once validated run through all the pay statements and finalize them.
The same process can be done in quarter increments if necessary for all prior quarters in each year. This is only needed if the customer needs to see the data by quarter from AX without going back to the legacy system.
How about if you make a mistake Entering Beginning Balances for an Employee?
It is possible to reverse and re-enter transactions. To reverse the transaction, all you have to do is to follow
1. Click Pay statement > Reverse.
2. Click Yes on message "When you reverse this pay statement, a reversing pay statement will be created to offset this pay statement. Neither pay statement can be edited. Do you want to reverse this pay statement? "
