Once you have connected a journal service and imported your chart of accounts, you can map those accounts to different payroll transaction types, or to an employing entity. To view our YouTube video on Chart of Accounts, click here. The chart of accounts page consists of three 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.
• Entity-specific accounts: These accounts are used to override the primary accounts for transactions at a specific entity.

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 is the account used to reconcile the net payment amount of the payroll to the transaction from your bank account. This must be a clearing account, you cannot use a bank account for this purpose, as most journal integrations (including QuickBooks Online) do not allow journal entries to be posted directly to bank accounts. Sometimes this is termed as a "payroll clearing" account.

When reconciling, the payroll journal entries posted to this clearing account should align with the net payment transactions from your bank feed.

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. 

PAYE Liability Account: Sometimes called the PAYE clearing account, this account will track your PAYE liability transactions.

KiwiSaver Employer Expense Account: This account is used to track your KiwiSaver employer  expense transactions.

KiwiSaver Employer Liability Account: Sometimes called the clearing account, this account will track your KiwiSaver liability transactions.

KiwiSaver Employee Liability Account: This account will track the KiwiSaver employee 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.

Pay category transaction accounts

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

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.

Expense category transaction accounts

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

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.

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.

Splitting by employing entity and location

The chart of accounts can now be split by both employing entity and location for file export and detailed file export journal types. Simply map the accounts as required, and the journal will generate accordingly. This enhancement allows for more granular and relevant financial data, helping businesses track transactions more accurately across different locations and employing entities.

Splitting by employing entity

If you have set up multiple employing entities, your chart of accounts can now reflect the split of earnings accordingly. Your journal export will display the earnings split under the Entity column.

Note: You will need a working integration into File Export or Detailed File Export to be able to publish multi-entity chart of accounts.

Your journal export will display the earnings split as specified in the chart of accounts, under the Entity column.

Splitting by location

When mapping your default GL accounts, you will notice an option to "Split by location." This allows you to write a transaction line per location to the journal for the same account. This feature is particularly useful for businesses that use locations, classes, or tracking categories in their accounting software.

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

Location-Specific Accounts

If you want to split your GL by location and allocate transactions to different GL accounts, you can define location-specific accounts. These accounts function the same way as primary accounts but apply only to the specified location.

Entity-Specific Accounts

If you want to split your GL by entity and allocate transactions to different GL accounts, you can define entity-specific accounts. These accounts function the same way as primary accounts but apply only to the specified entity.

How entity specific accounts work

• Employing Entity Specific Accounts allow you to override primary and location-specific accounts at the employing entity level.

• If an employing entity account is mapped, it will take precedence over primary and location-specific accounts.

• This feature applies only to file export and detailed file export journal types.

• Your journal export will now display the employing entity split under the Entity column of an exported spreadsheet.

Setting up employing entity specific accounts

1. Navigate to Payroll Settings > Chart of Accounts.

2. Scroll down to Entity specific accounts.
3. Click Add.

4. Select the employing entity for which you want to map accounts, using the drop down menu.

5. Assign GL accounts for relevant transaction types.

6. Save your configuration.

Important Notes on setting up specific employing entity specific accounts

• If you set up employing entity-specific accounts, location-specific accounts cannot be used.

• You must have a working File Export or Detailed File Export integration to use this feature.

Exporting the Chart of Accounts

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