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M
M for TF
January 13, 2020
Solved

Payroll advance online - how to reconcile an expense

  • January 13, 2020
  • 1 reply
  • 0 views
I have paid an employee a £10 expense as it was claimed via his time sheet.  Let's say his wage was £100.  

His total received payment was £110.

The £10 expense was entered in as £8.33 plus £1.67 VAT and the payee was the employee but the category was 'repair and maintenance'.

The COA for Payroll Clearing is showing £10 unallocated.  What is the best way to account for this £10 so that I can reconcile the Payroll Clearing account back to zero please?
Best answer by GeorgiaC

Yes you would assume that would do it.  What that does is allow the zero-ing out BUT it does not allow for the VAT element.  Therefore I am given the option of allowing Payroll Clearing to zero out and NOT accounting for the VAT, or I account for the VAT and have Payroll Clearing showing a £10 imbalance.

 

If anyone has a solution it would be most helpful. 


Hey M for TF,

 

You could enter an expense for 100% VAT to account for the £1.67 however this would then offset the bank. 

 

We would recommend reaching out to an accounting professional to advise on how to handle this.

 

Thanks

1 reply

G
GeorgiaC
January 13, 2020

Hello M for TF,

 

Thanks for the detailed post. Can I verify with reference to the scenario above, did you run the employee through the payroll with the wage as £100 and then create and then create the £10 expense, or for the £110 and then create an additional £10 expense? 

 

Thanks

M
M for TFAuthor
January 14, 2020

Thanks for the reply and question.

 

I ran the payroll and in the payroll was an expense on a timesheet.

 

The wage £100 and £10 expense was was paid to the employee. 

 

The receipt for £10 was entered separately as an expense in order to account for the VAT.

 

So I am guessing the answer is the second one?

 

 

C
Catherine_B
January 14, 2020

Thanks for clarifying, M for TF. 

 

We can account the expense to the Payroll Clearing account to zero out the unallocated £10 instead of Repair and Maintenance. Let's reopen the transaction and then change the account under Category to Payroll Clearing account. Confirm the changes and review the register to see if the amount clears out. Then, reconcile your account again. 

 

I also recommend reaching out to your accountant so they can advise on how to account your payroll expenses. 

 

I'll be around if there's anything else that you need help with. I got you!

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