Hi I have checked a number of postings re the topic of posting payroll in QF. I think I understand it but just wanted to check as I am still in first month of QF and would like to make sure at this stage.
For background I use 12Pay payroll, and used to use Sage line50, there was no integration, and all I used to do was have a monthly journal to post payroll figures etc. Then when I paid salary, Paye & NI etc. I would just CR bank and DR the relevant GLs (Net wages, NI, Paye etc.) I am a small ltd (2 employees) and tend to post the journal and pay same day
So was thinking I would use the same approach in QF, I used the import TB to import the payroll journal, this worked well, just thought it would be easier than creating the journal each month, would be good if you could change the description on the journal. When I came to pay in the bank I used the tag to salary feature that then created journals I wasn’t expecting. I have the setting to post net wages to the BS off.
I was expecting to use the same approach of importing a journal then assigning the payment to the GL. I think using the tagging function is confusing me, and think I can use the tagging option “other” and select the GL for net wages, and similarly when paying PAYE/NI just use the other option to allocate to the GL. Is there any issue with doing this ? it just seems I am not using the QF functionality
First of all, I would discourage the importing of the journal through the TB import tool as this can cause an issue further down the line. TB journals are flagged in a way to show them as opening balances.
What this actually does, is:
Tag this payment to 2220 Net Wages
A second posting is made to move it from 2220 to 7003 Net Staff Salaries Paid
This actually creates a journal for you showing this movement, which also allows you to expand on it if needed (e.g. PAYE, Pension etc.).
If you switch this setting to on, you can create the journal manually. An example of which can be seen here:
Thanks I will stop using the import TB, I did notice a function somewhere to copy a journal, so suppose I could use that each month and adjust the minor changes. As for posting to 7003, probably an accounting question, but why would I do that ? I never used to I just used to post to gross wages, so my gross wages 7000 plus Employers NI 7006 would appear on P&L report
The journal would effectively create an entry on the balance sheet as an amount owed to your employee(s). When you tag the payment (with the setting switched to on), it moves it from the balance sheet to the profit and loss account.
While it’s outstanding, it’s a liability for your business. But once it’s paid, it’s no longer a liability, but rather an expense.
