Journal Entries for Leave

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Journal Entries for Leave

I am currently using Account Right Plus AU 2018.2 and just completed entering leave entitlements for staff.  The number of days, and dollar values are all okay, it also shows the annual leave pay on the pay slips, in dollars if an employee has taken any leave, and also shows the leave balance at the end of a particualr period in hours.

 

My question is "Each time we prepare a pay for an employee (i.e. monthly salary), does MYOB automatically debit the Annual leave Expense account and credit the Annual Leave Liability" with dollar values, since when setting up I selected  the expense account for annual leave and also selected the leave accrual account for the liability.

 

Reading through the MYOB notes I noticed that at the end of each pay period, in our case every month end I need to print the "Entitlement Balance Summary", and prepare a journal entry manually.  Is there a reason why MYOB does not prepare this journal entry automatically when we prepare the pays.

 

I would have liked if MYOB did the entry for us automaticall, since I was tracking staff leave on an Excel spreadsheet and was entering the journal entry manually, and giving the staff a copy of their excel sheet showing B/F balance, leave taken and leave entitlement and C/F balance.

 

Hope this makes sense, please correct me where I am wrong.

 

Thank you

Shanthi

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Re: Journal Entries for Leave

Hi @SDesilva

 

Currently, AccountRight doesn't automatically take into account for the provision of leave for account reporting. This is a manual process within the system. If clients would like to achieve that I would recommend they review Help Article: Tracking leave accruals as liabilities 

 

To my knowledge, we don't have any immediate plans to update this to be an automatic program feature and have those journals created automatically. In saying that, it may be something that we do look into for the future of the program.

Kind regards,
Steven

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Re: Journal Entries for Leave

Hi Steven,

 

Thank you so much for your reply.

 

Yes I will follow the steps in  Article: Tracking leave accruals as liabilities 

 

Hopefully one day it will be on future programs.

 

Kind Regards

Shanthi

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Re: Journal Entries for Leave

Hi Steven

 

I've been on the phone to a "MYOB Payroll Specialist" for two hours today and ultimately got nowhere after my phone call was mysteriously disconnected.  I'm hoping you can help me.

 

For the last five months I've been following the steps you outlined in the support note to the letter.  Today I decided to check my liability balances and they don't match the entitlement balance totals at all.  It seems to me that the support note forces a double entry effect to the liability account when an employee gets leave paid out.  The wage category annual leave which is linked to the liability account is debited, as too is the journal entry because the entitlement balance is also reduced.  I'm now frustrated and at my wit's end because the MYOB support team apparently don't know how to fix it and think it's easier to disconnect my call.  Would you have any ideas?

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Re: Journal Entries for Leave

Hi @MelBurn

 

I would recommend:

  1. Determining what the current balance of your liability account is.
  2. Running your Entitlement Balance Summary report to determine the current balance of your entitlements
  3. Working out the difference between those to values
  4. Once that has been determined you would be recording a journal entry to adjust the accounts by that different value.

By doing this is will adjust your liability account to the correct value going forward.

Kind regards,
Steven

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Re: Journal Entries for Leave

Thanks for your reply Steven.  Unfortunately that doesn't fix the problem going forward.  I need to work out why it's not working correctly.

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Re: Journal Entries for Leave

@SDesilva @MelBurn @Steven_M

 

From a Tax Perspective, leave is not a tax deduction until paid.

Leave does not appear on an Employees Payment Summary until taken.

I can understand why MYOB does not track Leave Entitlements.

 

I often talk to business owners about employee leave entitlements by reference to the Pay Slip.

 

It would be due diligence of a buyer of a business to obtain from the current owner confirmation of leave entitlements and any unpaid SG.

 

Duncan

Duncan Smith
Business Advice + Tax
Helping business owners build a better business since 1998
E expressgst@optusnet.com.au T 02 9904 3672 7 days

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