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Intuit

Mapping General Ledger Accounts in QuickBooks Advanced Payroll

Once you have set up your Chart of Accounts in  QuickBooks Online, you can map the accounts to different payroll transaction types.

The Chart of Accounts page consists of 2 sections:

Primary accounts

These accounts that are required, and are the accounts that will be used if no location specific accounts are mapped.

Primary

Location specific accounts

These accounts are used to override the primary accounts for transactions at a given location.

LocationPayPay

Mapping accounts to transaction types

Journals are produced based on the General Ledger account which has been mapped to the transaction type. The transactions are created based on a transaction hierarchy. The hierarchy is defined as follows:

Top Level:
Default Account Mappings

Second Level:
Pay Category Mappings, Deduction Category Mappings, Expense Category Mappings

Third Level:
Location specific default account mappings

Fourth Level:
Location specific Pay Category Mappings, Deduction Category Mappings, Expense Category Mappings

Transactions are matched to the General Ledger account from the lowest level to the highest level.

Default transaction types

Default

The following transaction types are mapped at the default level:

Payment Account: This account is often called the payroll clearing account and is used to reconcile the net payment amount of the payroll to the transaction from your bank account.

Wages Expense Account: This account is used to record the gross wages expense for the pay run.

Default Payroll Liability Account: The account specified here will be where all the deductions get journaled if there is no specific liability account set up.

PAYE Liability Account: Sometimes called the PAYE clearing account, this account will track your PAYE liability transactions.

Employer Pension Expense Account: This account is used to track your Pension expense transactions.

Employer Pension Liability Account: Sometimes called a clearing account, this account will track your Pension liability transactions.

Employee Pension Liability Account: This account will track the Employee Pension liability transactions.

National Insurance Expense Account:  This account is used to track your National Insurance expense transactions.

National Insurance Liability Account:  This account is used to track your National Insurance liability transactions.

Employee Expenses Account: This account is used to record any employee expenses processed within the pay run. Expenses are not deemed part of employee wages.

Employer Liability Expense Account: This account is used to record any employer liabilities recorded against an employee within the pay run.

Employer Liability Account: This account will keep track of your general employer liability transactions.

Note that there won't be an option to map Employee Expense or Employer Liability Accounts if you haven't created any Categories for these types of transactions (under the pay run settings heading on the payroll settings tab)

Pay category transaction accounts

Pay

Pay category transaction accounts are used to allocate specific wage expenses to different General Ledger accounts. For example, you may want to track bonuses, leave paid, or allowances paid to different General Ledger accounts. To do this, you would map a different General Ledger account for the specific pay category.

If you don't specify a pay category transaction account, the default Wages Expense Account will be used.

Deduction category transaction accounts

Deduction category transaction accounts are used to allocate specific deductions to different General Ledger accounts. If you don't specify a deduction account, the Default Payroll Liability Account will be used by default.

Expense category transaction accounts

Expense category transaction accounts are used to allocate specific expenses to different General Ledger accounts. If you don't specify an expense account, the transactions will be posted to the Employee Expenses Account by default.

Employer liability category transaction accounts

Employer liability category transaction accounts are used to allocate specific employer liabilities to different General Ledger accounts. If you don't specify a liability account, the transactions will be posted to the Employer Liability Account by default. Additionally, if you don't specify an expense account, the transactions will be posted to the Employer Liability Expense Account by default.

Splitting by location

When you map your default General Ledger accounts, you'll notice that there is an option to Split by location. This allows you to write a transaction line per location to the journal for the same account. This is particularly useful if you're using locations, classes, or tracking categories in your specified accounting package.

If you want to split your General Ledger by location and allocate the transactions to a different General Ledger account, you can define location specific accounts. These accounts will work in exactly the same way as the primary accounts, however they will only apply to the location they are specified for.

Exporting the Chart of Accounts

For users with multiple sets of location specific accounts, if they need to change a particular account, it can be difficult to find all the places that an account is used.

The Export Configuration feature adds an excel spreadsheet export so that the user can see which accounts are used across the whole Chart of Accounts.

Additionally, you can export your Chart of Accounts configuration via Payroll Settings > Data Extracts.

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