Accounting in Payroll

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Four line types that make up a wage or salary in Payroll: pay, deduction, tax and employer costs. Each line uses some of the methods outlined below to derive the accounts used to update the General Ledger. You can view how the account was derived in the pay entry by right clicking the GL Account in the form (pay, deductions, tax or employer costs) and selecting Show Defaults.

Standard Pay Defaults

The general ledger account that is applied to lines comes from a number of areas within payroll and Greentree.

For all lines there is a hierarchy that determines which segments and/or accounts is used. Employees have a Pay Group, Branch, and Profit Centre assigned to them on the Employee Maintenance form.

Employees can also have their own account mask assigned on the defaults. When a pay is entered or processed the account segments is filled as:

• Classification
• Transaction Type
• Employee
• Profit Centre
• Branch
• Pay Group

Greentree first looks at the classification and fill any segments nominated then move to Transaction Type, Employee, Profit Centre, Branch, and Pay Group until a valid account is created. If all the segments are filled at any one of the levels Greentree Desktop stops and updates the line with the account. If Greentree Desktop cannot find a valid account, the line is updated with the suspense account. The account may be overridden at pay entry.

Individual Pay Defaults

You can have employees whose wage or salary is regularly costed to multiple cost centres or employees who work on long term jobs. You can split an employee's standard hours across different account masks, accounts and jobs. If using hidden segments in the general ledger, the hidden segment must be accounted for, either masked or the full account number entered.

If you select this option, you can also:

• Add a layer to the above hierarchy if masking the account at this level.
• Enter jobs at this level, along with activity and work centre and defaults to the pay lines.

When processing or entering a pay, these account values defaults however if adding additional lines when entering a pay, the account will derived from using Classification Transaction Type à Employee Profit Centre Branch à Pay Group hierarchy.

You can also use this option for deductions, taxation and employer costs however deductions, taxation, and employer costs require a clearing account. This can be an entire general ledger account of part of a general ledger account code along with wildcard characters (*). The clearing account is derived using the hierarchy:

• Transaction Type Expense Mask
• Employee Account Mask
• Employee's Profit Centre
• Employee
• Employee's Pay Group Account Mask

Where the account cannot be filled, it posts to the suspense account.

Transaction Trees

You can use transaction trees in the Payroll module if the Summarised by batch option is deselected on the Module Control form. Each payroll expense account must have a valid transaction tree assigned to it.

If the transaction tree is invalid a pay may still be entered or processed however when the pay record is saved you are prompted to enter a valid transaction tree for the account. If the record is not saved, the expense is placed into the Transaction tree 'Unallocated' bin.

You can enter transaction trees on these forms:

• Employee Maintenance Defaults - If a transaction tree code(s) is entered on the Defaults tab, when a pay is entered or processed the transaction tree code(s) updates to the pay lines only for the employee.
• Employee Maintenance Payroll - You can enter transaction tree codes on the Pay, Deduction, Tax, and Employer Cost sub tabs. When you enter or process pay, the transaction tree code(s) update for each of the nominated line types on the Pay Entry form.
• Pay Entry - After you enter or process pay, you can enter transaction tree code(s) for each of the line types. If using one of the above methods, you can change or remove transaction tree code(s).

Sub Codes

You can use sub codes, which you can enter for each of the payroll line types when you enter or process the pay.

Accounts Payable Integration

The general ledger account postings use the general ledger clearing account associated with the original pay line.

For HR Journals, it uses the Clearing Account specified with the Transaction Type. Where this is wildcarded, the clearing account will be derived using the hierarchy: Transaction Type Expense Mask, Employee Account Mask, Employee's Profit Centre, Employee's Branch, Employee's Pay Group Account Mask.

Note: General ledger journals do not get created for HR journals, but as the general ledger updates for any HR journal included on an AP invoice created from Payroll, this could cause the general ledger to not reconcile to Payroll.

The process uses the hierarchies for determining:

1. Tax Code
2. Creditors Control Account
3. Tax Account

Payroll Journals

Payroll journals are created as part of the Create Payments process. The are removed from Greentree Desktop if the payments are cancelled.

Where the accounts come from is listed below. On a pay line, right click the GL Account field on the Pay tab to and select Show Defaults. This opens a listing of the posting accounts and the hierarchy used to obtain the account.

• Job Costing Integration

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