Hi guys, bit of a long query here.
I’m a little unsure why, when paying staff their net wage, that quick file uses “Net Salary Paid” Expense account, rather than off sett the payment against the already declared liability. Before paying HMRC or my staff, I complete a manual 5 line journal for my payroll as follows;
Expenses
Dr 7000 Gross - (Made up of Salary + Ee’s NI + PAYE)
Dr 7006 Employers NI - (Made up of Er’s NI only)
Liabilities
Cr 2210 PAYE - (Made up of PAYE due to HMRC.)
Cr 2211 NI - (Made up of both Eer’s & Eee’s NI due to HMRC)
Cr 2220 Net Wages - (Made up of all net wages due to staff.)
Please assume the figures exist above and are all correct, i.e. have equal Dr’s & Cr’s
If, when using the stated payroll journals above, when I do use the easy drop down for Staff wages I would expect that to apply double entry as Cr 1200 (Bank) and Dr 2220 (Net Wages) thus reducing the net wages control a/c to £0.00, assuming all staff have been paid. However it instead creates Dr to 7003 “Net Wages Paid” therefore upsetting my P&L an recording the Net amount as an additional expense in addition to 7000 and 7006, when it should just be the latter two.
Is there a reason why the system does this? Could is be a setting in the menu allowing the use to chose that that the easy drop down for Employee’s Pay applies to a ledger of your own choice in my case 2220 as I would have assumed? I understand every one works differently in this area but I’m just using standard journals, usually applied to Sage. Any help with this would great.
The obvious solution of course is to create a Journal Cr 1200, and Dr 2220. But as the account in question uses the super great bank feed facility it seems a shame to delete the imported transaction to then create the above Journal as a work around.
Wishes,
Michael