How do I map GL (General Ledger) accounts?

Once you have connected a journal service and imported your chart of accounts, you can map those accounts to different payroll transaction types. A short video on this setup can be found here.The chart of accounts page consists of two sections:

  • Primary accounts: These accounts are required and are the accounts that will be used if no location-specific accounts are mapped.
  • Location-specific accounts: These accounts are used to override the primary accounts for transactions at a given location.

Users who access the payroll platform via the Employees option on the QuickBooks Online (QBO) dashboard are already directly connected to QBO, so you do not have an option or need to connect to a journal service. 

Mapping accounts to transaction types

Journals are produced based on the GL account that is mapped to the transaction type. The transactions are created based on a transaction hierarchy. The hierarchy is defined as follows:

Top Level:

Default Account Mappings

Second Level:

Pay Category Mappings, Deduction Category Mappings, Expense Category Mappings

Third Level:

Location specific default account mappings

Fourth Level:

Location specific Pay Category Mappings, Deduction Category Mappings, Expense Category Mappings

Transactions are matched to the GL account from the lowest level to the highest level.

Default transaction types

The following transaction types are mapped at the default level:

Payment Account:

This account is often called the "payroll clearing" account and is used to reconcile the net payment amount of the payroll to the transaction from your bank account.

Wages Expense Account:

This account is used to record the gross wages expense for the pay run.

Default Payroll Liability Account: 

The account specified here will be where all the deductions get journaled if there is no specific liability account set up. 

PAYG Expense Account:

This account should not be used unless you are using a non-standard accounting methodology. The PAYG expense account will split the PAYG expense component from the wages expense component if it is specified. It is strongly advised that you set this account to have the value of "Use wages expense account" - This option has been removed from new business files

PAYG Liability Account:

Sometimes called the PAYG clearing account, this account will track your PAYG liability transactions.

Superannuation Expense Account: 

This account is used to track your SG super expense transactions.

Superannuation Liability Account: 

Sometimes called the super clearing account, this account will track your super liability transactions.

Employee Expenses Account: 

This account is used to record any employee expenses processed within the pay run. Expenses are not deemed part of employee wages. 

Employer Liability Expense Account: 

This account is used to record any employer liabilities recorded against an employee within the pay run.  

Employer Liability Account: 

This account will keep track of your general employer liability transactions.

Leave Provisions:

This is an optional setting and would be used to track the cost of any leave liabilities within the business. Further information on configuring leave provisions can be found here.

Note for Quickbooks users: QBO doesn't allow us to write transactions to bank accounts directly so the recommended way is use a "clearing" account and then reconcile the bank transaction against the clearing transaction in the journals.

Pay category transaction accounts

Screen_Shot_2017-09-28_at_12.02.55.png

Pay category transaction accounts are used to allocate specific wage expenses to different GL accounts. For example, you may want to track bonuses, leave paid or allowances paid to different GL accounts. To do this, you would map a different GL account for the specific pay category.

If you don't specify a pay category transaction account, the default Wages Expense Account will be used.

Deduction category transaction accounts

Screen_Shot_2017-09-28_at_12.11.07.png

Deduction category transaction accounts are used to allocate specific deductions to different GL accounts. If you don't specify a deduction account, the Default Payroll Liability Account will be used by default.

Assigning a GL account to the Expense Account is not compulsory and should only be done if you want the deduction amount to be posted as a debit entry against the allocated GL (which, in turn, reduces the wages GL account by the same amount). For eg, setting up your Salary Sacrifice Super deduction as follows: 

inline-94999333.png

Will be reflected in the payroll journal as follows:

Screen_Shot_2019-10-01_at_6.38.13_am.png

As you can see, the deduction amount appears as a liability. On the other hand, you can assign a GL account to the Expense Account (refer to below screenshot):

inline315894160.png

The output result will be as follows: 

Screen_Shot_2019-10-01_at_6.44.20_am.png

N.B: If you set up a deduction (not just salary sacrifice) to be paid direct to a bank account, it is not considered a liability (because it's already been paid over) so it will go to payroll clearing. If you want the journal entry to be a debit not a credit use an Expense account in the chart of accounts.

Expense category transaction accounts

Screen_Shot_2017-09-28_at_12.17.02.png

Expense category transaction accounts are used to allocate specific expenses to different GL accounts. If you don't specify an expense account, the transactions will be posted to the Employee Expenses Account by default.

Employer liability category transaction accounts

Screen_Shot_2017-09-28_at_12.19.25.png

Employer liability category transaction accounts are used to allocate specific employer liabilities to different GL accounts. If you don't specify a liability account, the transactions will be posted to the Employer Liability Account by default. Additionally, if you don't specify an expense account, the transactions will be posted to the Employer Liability Expense Account by default.

Splitting by location

When you map your default GL accounts, you'll notice that there is an option to "Split by location". This allows you to write a transaction line per location to the journal for the same account. This is particularly useful if you're using locations, classes or tracking categories in your specified accounting package. 

Note: If you also want to assign classes to your journal entries, you will also need to ensure that you have assigned classes to your locations. 

Location Specific Accounts

Screen_Shot_2017-09-28_at_12.35.28.png

If you want to split your GL by location and allocate the transactions to a different GL account, you can define location specific accounts. These accounts will work in exactly the same way as the primary accounts, however they will only apply to the location they are specified for.

Exporting the Chart of Accounts

For users with multiple sets of location specific accounts, if they need to change a particular account, it can be difficult to find all the places that an account is used.

The 'Export Configuration' feature adds an excel spreadsheet export so that the user can see which accounts are used across the whole Chart of Accounts.

Screen_Shot_2017-09-28_at_12.40.10.png

Additionally, you can export your Chart of Accounts configuration via Payroll Settings > Data Extracts:

Screen_Shot_2017-09-28_at_12.37.21.png 

NOTE: If you make any changes to the journal service (including changing from "File Export" to "Detailed File Export") this will require you to re-map your Chart of Accounts accordingly.

Explore related content

If you have any questions or feedback please let us know via support@yourpayroll.com.au

 
Was this article helpful?
0 out of 0 found this helpful

Comments

0 comments

Article is closed for comments.