I'm currently using Quickbooks Deskstop with manual payroll calculations. We just did a test run for our first payroll and the Accrued Vacation amount (unused vacation owing to our employees) doesn't show at all on our balance sheet. We tried to map the liability account to Vacation payroll item through Payroll Item List but it only allows us to map it with an Expense account, which is for once the vacation is paid out to employees.
Is there any way to fix it?
I know it's important to make sure your books are balancing and that you have all the information you need for your business. Great job with the steps you've taken so far and I appreciate what you've described here with how your payroll items are mapping.
In situations such as these, it's often easier to have someone take a look at this with you. Luckily, QuickBooks Desktop's phone support team has the option to screen share. Doing this, they'll be able to see what you're seeing and let you know where any missteps may be.
Vacation Pay type payroll items should allow you to pick a liability account. For instance, I have mine for vacation accrual set up to go to a liability account called Accrued Vacation Payable, which is a sub-account to my Payroll Liabilities account. Try to see if you're able to scroll through the list to get more options other than expenses when setting up the payroll item.
Otherwise, give us a call. The number to dial is 1-877-772-9158. Learn more about support hours and policies here: Intuit QuickBooks Desktop Software support policies
Have a great weekend!
This would happen if you are not using the built-in Vacation items that are native to QB. If you are using the correct payroll items, you will have the option to enter an account for the Vacation expense, i.e. Salary or Wage Expense and an account for Vacation liability, i.e. Vacation Payable.
You cannot set up your own Vacation payroll items because Quickbooks will not behave as expected when you do. If you do your own, you will only have the option to enter an expense account, which as you said, will only hit your P & L and not your Balance Sheet.
Just curious, how do you have access to any Payroll items at all if you are doing a "manual" payroll? Are you subscribed to the payroll service?
Hello @droybal ,
There is a way to do this in QB Desktop, if you are subscribed to the QB payroll service. The built-in Vacation accounts already track to an expense account of your choice and a liability account of your choice. If you are not subscribed, then you would have to do it all manually by entering your calculated amounts to each account you want to hit. Wage Expense, Vacation Expense, Vacation Liability, CPP & EI Expense & Liability, and Fed/Prov Tax Liability.
I'm not totally clear on what you're asking, so I've misunderstood your question, please let me know.
Thank you for your prompt response. Yes, you do understand my concerns. When I set up PTO it only has an expense account. It doesn't have the option to set up a liability account also to show the accrual on the Balance sheet. I called support but the only suggestion was to make a journal entry each month.
I'm not sure if Quickbooks changed the vacation set up. I do have the annual payroll subscription but vacation no longer has the option of assigning an expense account and liability account to it. If I recall correctly older versions of Qbooks did have that option. I'm currently using Enterprise 2019.
Hi @droybal ,
That doesn't sound right. Are you sure you're using the built-in Vacation payroll items? If you are, the set-up shouldn't be any different from any other QB Desktop version's payroll items. You would only run into this problem if you were trying to set up your own Vacation payroll items. If you want to track the accrual/liability and expense when used, then you have to use the native items.
Worst case scenario, Intuit has changed the Quickbooks Enterprise program to be more like their online version, which does NOT track Vacation accruals at all, and only records vacation expense at the time the vacation is used. If this is true, it's another Intuit vacation-related disaster. If it's not true, then you should be able to enter an expense and liability account for the default vacation payroll items to track to.
The expense and liability account will be entered in the Quickbooks native VacPay-Accrued payroll item. If you double-click on it, you should see this:
Click Next, and you should see this:
These two accounts affect these Vacation payroll items in QB for which you do not have the ability to enter G/L accounts; Vacation Hourly Wage item, Vacation Salary item and VacPay-Accrual Paid Out item. These items link to the G/L accounts in the box above.
Hope this helps :)
Hi @droybal ,
That looks like an Hourly Wage Item you are trying to set up yourself. If you do that, it is not connected to QB's native vacation items. The only way to get Vacation accruals to work properly is to use only the QB native items. You cannot create your own. If you do, it will only track Vacation expense as it is used rather than to expense it and accrue to liability in the period in which it was earned.
If you go into your list of payroll items, you should see the following items:
VacPay-Accrual Paid Out
These are the payroll items that are involved in accruing your vacation properly. The last one, is the one that has the place to put your two vacation accounts - expense and liability (see my screenshots in above post). You can only have one G/L account for each. Whatever you put in the expense account is where the Vacation accruals will post to if you have each employee marked to retain Vacation pay within their employee information profile.
If you need to distribute your vacation expense to several different G/L accounts based on Departments, I have another post where I explain how to handle that through simple custom reporting and a single journal entry each month. I will locate that post and forward it to you.
Each time you pay your employees, you will see that QB calculates the vacation accrual and shows it on the pay cheque window. It calculates according to the vacationable payroll items you check off in the employee's vacation information window.
This employee (below) accrues 3/52 of all his regular earnings (three weeks vacation) or 5.769%. This is the number entered into his vacation profile (above). Note that the Vacation Accrued ($) amount in screenshot below is 5.769% of his total earnings for this pay period. Note also that his total Vacation Avail. ($) after the addition of the $129.23 accrued on this cheque is now $3,247.84.
The screenshot below illustrates what happens when an employee takes vacation time and is paid out some vacation pay according to the time he takes:
This employee's Vacation Avail ($) prior to this pay cheque was $2,459.57. He accrued $182.24 from all his earnings on this cheque, and was paid out $244.00 because he took 8 hours of vacation. Thus the current Vacation Avail ($) balance of $2,397.81.
If your employee requests a pay out of Vacation pay or leaves your employ with an amount of Vacation owing to them where they will NOT take the time, you would use the VacPay-Accrual Paid Out item. This will also decrease your Vacation liability balance. See below:
This was the employee's final pay cheque. First I calculated all of his final hours and pay-in-lieu amounts. QB calculated $168.00 of Vacation accrued on those earnings. Then I paid him out his entire amount of Vac Pay. In Saskatchewan (where I am), Vacation Pay accrued is also calculated on Vacation earnings. So I entered the amount that was first showing in the Vacation Avail ($). However, it doesn't account for the piggy backed vacation pay. So I just keep entering amounts in the VacPay-Accrual Paid Out item until the Vacation Avail ($) is at $0.00. If you are in a province where Vac Pay is not accrued on Vac Pay, then you need only do the first step.
Best of luck :)
Hi @droybal ,
Here is the link to the post I made about breaking out payroll expenses by department.
I think I've just realized why you may not be seeing what I'm seeing in the Vacation payroll items . . . it appears that you are in the US by the look of your PTO window. If that is the case, then everything I've told you likely doesn't apply as the US version is very different. Sorry I couldn't be of more help.
Maybe you can help me?
I am using the 2020 Premier version with Payroll.
I have the VacPay-Accrued set up to go to Vacation Pay expense and to Payroll Liabilities: Vacation Pay Payable.
For some reason, when I apply the VacPay-Accrual Paid Out item, on a paycheque, it goes simply to the parent account Payroll Liabilities, and doesn't affect the Vacation Pay Payable account directly.
So on the Balance sheet all of the Vacation pay that has been paid out, shows up as Payroll Liabilities - Other rather than reducing the Vacation Pay Payable account.
I can not see how to change this. Can you?
Hello @chertzog ,
I have mine set up exactly the same way and it posts to the sub-account Vacation Payable. I'm not sure what would be the problem. The only thing I can think of is that you mentioned you have set up the liability account as Payroll Liabilities : Vacation Payable. When setting up the VacPay-Accrued item, the drop down list only gives you the names of all accounts and doesn't differentiate between parent and sub-accounts. Your sub account Vacation Payable is listed on it's own . . . that is the one you select. The parent account, Payroll Liabilities, although it is in the list, should not be referenced or entered here. Having said that, QB knows that your Vacation Payable account is a sub-account of Payroll Liabilities and will post accordingly to the G/L.
Hope that helps.
I deleted the sample paycheque I was using to test the system. And re -entered it.
I also closed and reopened the program the next day.
And the next day it seemed to be working just fine, so go figure.
I have a printout that proves it was originally posting erroneously as I previously described, so I'm pretty sure I'm not completely crazy!
Thank you for your comment.