When cheques have been issued, you can cost the payroll costs to the general ledger and job cost centres. This is a process where transactions are created from the cheques to their target accounts and job centres.
Transactions are records of money that will add to or take money away from g/l accounts. Note that this utility only creates transactions. You, or someone with responsibility for updating the G/L, will be able to review them before updating them to the general ledger. The G/L is updated with the transactions when you run the G/L Trial Balance and Update utility.
When you drill down into a general ledger account, you can see how all the money came and went from the account. That’s because Abio creates transaction records to record when costs are posted to general ledger accounts.
Transactions always net out to zero, so when amounts are credited to one account, they’re debited from another account. For example, money is taken out of the bank and added to wages payable.
After cheques are issued you can cost the transactions to the G/L. Navigate to [c] Payroll, then [k] Cost to J/C and G/L.
Running this utility will create transactions for all the component parts of the payroll.
You can define which accounts the payroll components are posted to. Navigate to [d] General Ledger, then [u] Set Up, then [f] Control Account Entry to review the account assignments.
The first tab has all the payroll assignments.
When you run the ‘Cost to G/L and J/C’ the following transactions are created for each cheque in the payroll run:
The following cheque amounts are accumulated as ‘Cheque Summary’ transactions and posted once each time payroll is transacted:
Timesheets posted to G/L accounts are summarized and posted to those G/L accounts.
Timesheets posted to jobs are summarized and added to the Job Costing labour costs account.
Timesheets posted to Equipment are summarized and posted to equipment costs.
Any GST recovery on timesheets is posted to the GST recovery account.
The fringe expense associated with job costs is taken out of the fringe recovery account.
The wages component of timesheets is taken out of wages payable.
When payroll is transacted, the labour dispersion rules are applied and job costs are moved to the centres indicated by the dispersion type.
This allows you to move timesheet components, such as meals or living out allowances, to different cost centres than the timesheet is posted to. This will isolate labour costs from other overhead, giving you a clearer picture of the cost of actually doing the work.
We cover this in more detail in the course on Job Costing.
A single payroll run can generate hundreds of transactions. In their entirety they can be overwhelming. But transactions are how Abio is able to give you continually more detail about all the costs and expenses that contribute to an account balance.
Drilling down into a period balance for any account gives you a list of all the transactions posted to that account in that period. We looked at one example of that when we were setting up trade unions.
Let’s look at one of the payroll accounts for another example. We can drill down into wages payable.
Which brings us the G/L Account entry screen.
Drilling down into May brings up all the transactions for May.
If we double click on the selected line, we see all the timesheets in the timesheet summary, and the earnings for the timesheets match the timesheet summary.
We can go one further and drill down into the individual timesheets.
We can review transactions by drilling down from entry screens and reports, but Abio also lets you select your own criteria. Navigate to [d] General Ledger, then [i] Transaction Reports. There are four varieties of transaction reports.