Congrats on your first post in the Community. I'll be happy to share more info on this.
QuickBooks Online doesn't automatically enter the accrued vacation for every pay period in the balance sheet as Wages Payable/Accrued Wages. Our product developers are working towards incorporating this feature into the program. There isn't an exact time-frame yet but you can keep an eye out on new features on our blog using this link: The QuickBooks Blog. You'd have to view the employee's vacation accrued through their profile for now.
Let me know if you have questions. I'm here to help.
Hello @norly ,
Until QBO incorporates this essential functionality re: Vacation Payable, you can use QBO's vacation reports to get the numbers you need to make the JE yourself.
DR Vacation Expense (vacation earned/accrued in the period)
CR Vacation Liability (same amount as Vac expense)
Since QBO automatically debits the vacation expense at the time someone takes their vacation, you will have to make the following entry to ensure that vacation expense isn't recorded twice, and vacation liability (from above entry) is reduced:
CR Vacation Expense (to offset the automatic DR QBO makes when paying out vacation pay)
DR Vacation Liability (to reduce the liability by amount of vacation taken)
Which report are you using to get this information? I can't find anything that allows me to select a time period and view the vacation expense accrued.
Now that I look at QBO's Time Off Report a little closer, I take back what I said about being able to get the numbers from the report to make your JE. Theoretically, you should be able to take the Vacation Available amount from the report, deduct the Vacation Available from your previous report, and come up with the total Vacation Accrued/Expense for the current period. However, what I didn't realize is that QBO is simply calculating the hours available by the hourly rate of the employee to come up with the $ available.
I think I've established pretty well that QBO falls down badly in this area, since there is not always a straight line between Vacation Hr entitlement and Vacation $ entitlement. And in many provinces, vacation is accrued on overtime, call-in pay, retroactive pay, shift premium pay, standby pay, stat pay and previously paid vacation pay, not just regular hourly wages or salary. Each of those things has just thrown the simple vacation hours entitlement x hourly wage = Vacation $ entitlement, out the window. Yes, one is entitled to a certain # of hours per year, but they are also entitled to a certain % of their total wages in $.
Having said all of that, you are likely going to have to create your own spreadsheet to keep track of your vacation expense/liability each period, taking the earnings numbers from the Total Pay Report, or some other hybrid report that you've customized to get the right earnings items to calculate vacation on, and to apply a formula for the % multiplier, coming up with total vac $ earned in that period. Then you would create your Vacation accrual/expense JE from that.
Wish it was better news. As far as I know, we're still waiting to hear when QBO will address and fix this huge flaw in the software.
It gets even worse, as even if I enter the accrued vacation pay expense every month, when vacation pay is paid out, I'm not able to link that to the Vacation Pay Accrual account, only to an expense account.
What a mess. This is going to take many hours to deal with.