Payroll - Pay increase not paid in same month
Can someone please explain, step by step, (sorry I'm a novice), how to reconcile 2 wage payments which occurred over two months. I believe I need to use a clearing account, but have no idea what the process is. I think I need to a change the Transaction from Cheque to cash.......but what then?
(The Payroll transaction is correct, but due to the tax rate changing the incorrect money was paid to the employee in July, but the additional amount paid in August.)
Hi RobNob1,
No worries at all! I'm here to help! Right now, you have two options: either reverse and redo the payroll as two separate transactions or create a general journal. Start by setting up a payroll clearing account to allocate the separate wage payment to the clearing account from the bank feed transactions. In your general ledger report, you'll see a credit in the bank account and a debit in the clearing account. Finally, create a general journal to move the full pay amount between the bank account and the payroll clearing account. I would recommend speaking with your accountant for further assistance. You can also check out this article, Matching bank transactions, for more information regarding bank feeds.
Feel free to get in touch if you need more help.
Cheers,
Princess
