Paying Wages Via Manual Transfer

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Contributing Cover User NeilAtherton
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Paying Wages Via Manual Transfer

My situation is super simple:

 * I contract via a third party.

 * That third party pays my company for my services.

 * I pay myself a wage from my company.

 

I'm the only employee, so there is little accounting effort.  I have a handful of expenses a year (PI/PL insurance, work cover etc.), and invoice fortnightly.  I basically have only 30 to 40 transactions over the entire year.

 

I'm using MYOB Essentials as it allows me to generate invoices and manage GST, PAYG, super etc.  

 

I am all set up with a bank feed etc., but am having trouble paying a wage. I understand how it all works, but my current bank account is an online saver account and therefore can't be used to pay a wage automatically (neither through a .aba file nor through the internet banking application).  I want to avoid new accounts or new bank feeds - I want to avoid anything that makes my very simple situation less simple.

 

My question is this: am I able to do my MYOB payrun and then just manually transfer the money myself?  

 

Before I understood how the wages were supposed to work, I actually did the above - ran through the payrun process and then just transferred the money into my bank.  I assumed that's what you did, and then just allocated the bank transfer out as wages.  That showed twice the money missing from the bank balance on MYOB though, which led to further investigation and then multiple discussions with my bank.  I've since transferred the money back in, so everything balances but now can't pay myself.

 

I pay one wage once a fortnight. I have no problem if I need go through a bit of a manual process and an extra allocation to make that happen.

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Ultimate User gavin12345
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Re: Paying Wages Via Manual Transfer

Hi @NeilAtherton

 

There is nothing wrong with manually processing the payment, many small businesses do this. It is important to have things set up correctly. When you do this, you simply process the payroll in MYOB - nothing else. Then manually do your payment with the bank. Processing payroll in MYOB will 'take' the funds out of your bank account in MYOB.

 

Snap51.jpg

There are 2 important settings, firstly on the Pay Employee screen, set the Payment Method to Cash (or Cheque) when processing the payment - see top half of image. Then check to ensure the linked account under Setup > Linked Accounts >Payroll Accounts is set to the bank account you will be taking the funds out of - see bottom half of image. Notice the top account is for Cash payment method and the 2nd is for Cheque payment method.

 

If set this way, when processing the payroll, take a look at Edit Recap Transactions and you will see something like this:

 

Snap52.jpg

 

This shows MYOB will be crediting A/c 1-0110 for the Net Amount. There is no need to record any other "Bank Transfer'.

 

Regards

Gavin

Contributing Cover User NeilAtherton
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Re: Paying Wages Via Manual Transfer

Hey Gavin,

 

Thanks for that. Your images won't show.  I think they're currently unmoderated, but might later be moderated? Either way, that sounds like exactly what I want to do.

 

The first time I tried I had asssumed you worked out the payroll part in MYOB and then just transferred the money (I may have skipped the tutorial like a typical man).  That ended up with a double debit, though only in MYOB - the money was only transferred the once, but MYOB showed the bank account as being reduced by twice the amount.  I fixed it by transferring the money back and deleting the pay run.

I do find it interesting that even though MYOB is attached to my bank account, it doesn't get the balance from the bank.  So if I do a pay run but can't work out how to actually pay the money (ala the last 6 weeks), MYOB says I'm down that money in opposition of what's actually in the bank.

 

Thanks again.  

Neil

 

 

Contributing Cover User NeilAtherton
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Re: Paying Wages Via Manual Transfer

I'm also using MYOB Essentials.  I'm not sure if that makes a difference...

Ultimate User gavin12345
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Re: Paying Wages Via Manual Transfer

Hi @NeilAtherton

 

Sorry - please ignore my post - it refers to MYOB Plus/Premier etc not Essentials. I don't normally visit the Essentials board as it is not a program I am familiar with, so not sure how I managed to post to the Essential board.

 

Perhaps another user can provide some guidance.

 

Regards

Gavin

Ultimate Partner IanChait
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Re: Paying Wages Via Manual Transfer

HI @NeilAtherton

 

Set up a Payroll Clleraring Account as a Banking Type Account. . Then in you Payroll set up, select this account as the account to pay wages from. The program will then record the pays to the P&L Expense account-Wages  and the other side will be in the Clearing Account.

 

Pay yourself manually as you do, (I assume this comes out of your bank account) and then allocate the bank feed transaction to this Payroll Clearing Account. Alternatively just process the Pay as coming out of your bank account, and then match the Bank feed to the transaction after you have paid yourself manually.


Regards
Ian Chait CA
Certified Consultant Melbourne
P/M 0417 479 585
Email ian@myfc.com.au

Contributing Cover User NeilAtherton
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Re: Paying Wages Via Manual Transfer

@IanChait How do I set up a Clearing Account?  Is it actually another bank feed that needs to be set up?

 

I had my bank change the product I use with them to allow me to pay wages out of the bank account via their "Pay Wages" function.  The .aba files do much the same thing, but are designed when you have many transactions at one go.  I have one wage to pay fortnightly, and so figured I'd just do it manually.  I do my payrun with no problem, and then pay the wage via the online banking function, but MYOB debits me twice - once at the payrun and once when it's transferred.

 

Nothing in the help explains this.  It all says to use the .aba file, which would give exactly the same result.  Why does it even debit the account at the payroll step?!

Contributing Cover User NeilAtherton
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Re: Paying Wages Via Manual Transfer

My payroll settings have the following section:

This says explicitly that the bank transaction should be auto-matched to the payroll transaction.  That is definitively NOT happening.  The payroll run debits my bank balance on my MYOB dashboard, and then the actual transaction debits it again.

I rang the MYOB help line, again, and they suggested I use a .aba file. That, however, just allows you to automagically do multiple transfers at the same time.  It'll end up doing exactly the same thing.

Ultimate Partner IanChait
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Re: Paying Wages Via Manual Transfer

Hi @NeilAtherton

 

Is the payment coming out of your Savings Account? If so then with your set up you should just be able to match the transaction on your bank feed. 

 

If you would like, I can log into your file and talk you through it. Could do this on the weekend. You willneed to invite me into your file as an advisor so i can see the set up.

 


Regards
Ian Chait CA
Certified Consultant Melbourne
P/M 0417 479 585
Email ian@myfc.com.au

Contributing Cover User NeilAtherton
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Accepted Solution Solved

Re: Paying Wages Via Manual Transfer

Worked it out.

 

The default configuration is to pay via bank file, but I wasn't set up to do that.  That meant that MYOB didn't match the transaction when it came in. 

 

I then set up to use the bank's online wage feature, which should've worked. However, I did two pay runs at the same time. They were separate when entered, but came into MYOB as a single transaction.  That meant it didn't match the amounts.

 

I fixed it by 1) turning off the pay via bank file configuration; and 2) making sure it's a single transaction at a time.  Once I did that, MYOB recognised the incoming transaction and matched it to the pay run.

 

Using the online wage function is effectively doing it manually, but that's no problem. I pay myself fortnightly, so with annual leave, I might be making 20 manual wage transactions a year.  That's not a lot of overhead.

 

I spoke to the MYOB help line and they had no idea, which is disappointing.  I was speaking to a SME whose advice was to  basically repeat what I'd already done unsuccessfully.  She had no idea of the configuration setting I had to find myself.  

 

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