Closing payroll periods in Virtual TimeClock is an important, but often overlooked administrative function. This article will help you understand open and closed periods, and appreciate why closing periods is important.Understanding Open & Closed Periods
When you run a report for an open payroll period, Virtual TimeClock must evaluate and apply each of your regular and premium pay rules to determine the regular hours, any overtime, and (optional) gross wage amounts for each entry in the report.
When you close a payroll period, these amounts are written to the database as a permanent record. Any future reports for these entries will use these previously calculated and saved amounts. As an added benefit, Virtual TimeClock then determines and automatically updates your current period dates to the next payroll period.Closing Periods is Necessary
Closing payroll periods in Virtual TimeClock accomplishes several very important functions:
Report AccuracyWhen to Close a Payroll Period
Because entry hours and overtime amounts are saved using the payroll rules in affect when the period is closed, you are free to modify or update your overtime, wage, or pay frequency settings in the future. However, if you fail to close your payroll periods, any changes to your payroll rules will likely cause reports for prior periods to be incorrectly reported because they will be recalculated using your modified payroll rules!
Since the entry amounts have already been calculated, reports for closed periods are very, very fast. However, if you do not close your payroll periods, a year-to-date report will have to recalculate the hours, overtime, and wages for every entry for the entire year. The larger the report with unclosed entries, the longer it will take to run. Conversely, when periods are closed, great amounts of timecard data can be totaled and available to you almost instantly.
Proper Report Dates
One of the tell-tale signs of failing to close payroll periods is the annoyance of having all your reports open to some period of time months or years ago. Reports use the current payroll period by default so timecards and other reports will automatically open to the correct current period when you close payroll periods and let Virtual TimeClock automatically update your current payroll period for you.
The current payroll period may be closed anytime AFTER all employee hours for the period have been entered, reviewed, and approved for payroll. This is necessary since entries for the period are never again totaled once a period is closed.It IS NOT necessary to close a payroll period on the exact end date of your payroll period. Your employees can continue to use Virtual TimeClock to record new entries. This enables you to review timecards for payroll and close the period at your convenience.