how2pr11.htm

How does Payroll Accrual Work?

Payroll Accrual is active only during the "finish payroll" procedure. The process creates a set of journal entries that apply to two different accounting periods and allows splitting the values. For example, if you issue a payroll on June 8th but some of it applies to May and the remainder to June and you want to account for it in two different months.

1. You can only accrue payroll to an adjacent accounting period, i.e. if your current G/L period is 7, you can accrue payroll to either periods 6 or 8, but not to any other periods because they're not next to period 7.
2. Accrual is based on percentages. You type the percentage to apply to the first chosen period, and the system automatically assigns the reciprocal percentage to the second period.
3. You select which periods get which percentages.
4. The journal entries are made as follows for each G/L account affected by the payroll finish:
   • The full amount is debited to the first period.
   • A credit amount is posted to the first period for the equivalent amount that is to be accrued to the 2nd period.
   • The debit amount is then posted to the 2nd period for the accrued amount.

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