How can I clear a Payroll Accrual entry from Pay Bills?

I want to resolve this issue for you, @SAT2021. Let me ask a few questions about the error you're having right now.

May I ask what are the steps you take before having this issue? Or how did you record these transactions? One last thing, what are the accounts affected by your journal entry?

This way, I can identify the accurate solution and clear the payroll accrual entry.

I'll be waiting around the corner, @SAT2021. Don't hesitate to come again in the loop. 

We use an outside payroll provider so all Payroll entries are entered manually.

Accrual Journal Entry:

Dr. Wages and Salaries

Dr. ER Payroll Taxes

Cr. Accrued Payroll

Cr. Accrued Payroll Taxes.

JE posted as expected; then created reversing JE.  That all looks good.   However, the accrual entry populated into Pay Bills and I can't get it removed.  

Let's review the entry entered so we'll know how to fix them, SAT2021.

One of the most common errors when recording journal entries is when an entry is made in the wrong account. The amount may be correct but it is entered in the wrong place. You'll want to check the account type that you're using. If it is entered as Accounts Payable (AP), you can edit it to change to the correct one or recreate it if you're unable to make any changes to the entry. 

The account type you've selected may also affect your accounting so you'll always have to make sure you get this right. Also, if you're using QuickBooks for accounting and another service to run payroll, you'll need to keep track of those paychecks in QuickBooks. I've added this article for more details: Manually Enter Payroll Paychecks In QuickBooks Online. 

Otherwise, you can check out with your accountant if you're not sure about this.

Furthermore, QuickBooks Online Payroll (QBOP) provides several payroll reports that you can use to view information for your business and employees. Learn from this article for more details: Run Payroll Reports. 

Please get back to us if you have any questions about journal entries or paying bills. We're here to make sure we get you covered.

Right.  All of this is useful information but it doesn't address how to enter the accrual and how to get it reversed without the data showing up in Pay Bills.  This tutorial explains how to enter paychecks once the payroll run is completed.  If you have the time, please create a short payroll accrual JE and enter it into QB using dr. wages and salaries, then reverse it.  Then go to Pay Bills and you will see your entry.  I need to know how to get it removed.  Thank you.

@SAT2021 

One of the accounts on your accrual JE or reversing JE is posting a credit to A/P.  That is why it is showing in Pay Bills.  Click the entry that is showing in Pay Bills.  That will take you to the JE.  What credits are on that entry?  One of them is posting to A/P.  Change it from A/P to the desired account in your chart of accounts.

The Accruals need to be posted to a Liabiltiy (A/P) account in order to show the liability on the Balance Sheet at Month End close.  The JE works as it should, but QBO is placing the entry into Pay Bills. It does not post the reversing entry to Pay Bills to clear it out.

@SAT2021 

The reversing entry won't clear it out unless you apply the A/P debit to A/P credit.  Go to Pay Bills, click the checkbox next to the bill and apply the credit.  That will clear it.

The JE should not post to A/P, it should post to your payroll accrual liability account.  That way, this will not happen in the future.

Thank you for your assistance.

"The JE should not post to A/P, it should post to your payroll accrual liability account.  That way, this will not happen in the future."

The Payroll Accrual account is classified under Current Liabilities: Accrued Salaries, Accrued ER P/R taxes, etc.  How else can the JE for liability accounts be set up to avoid flowing through Accounts Payable and Pay Bills?

If I click the credit button on Bill Pay, where do those transactions go?

Following up. I went in and clicked the credit button, but I need to have a payment account to apply the credits to.  Current drop down is a list Bank accounts.  Is it possible to create an account for Payroll accruals in that box and apply the credits via Bill Pay in lieu of creating a reversing Journal entry?

@SAT2021 

"The Payroll Accrual account is classified under Current Liabilities: Accrued Salaries, Accrued ER P/R taxes, etc. How else can the JE for liability accounts be set up to avoid flowing through Accounts Payable and Pay Bills?"

That looks right but you need to look at your A/P ledger and see what line from your JE and reversing JE are hitting A/P.  Something is.  Whatever account that is, you can change it to a non-A/P other current liability account and the reversing JE will clear it without it hitting Pay Bills and requiring you to apply the reversing JE manually. 

"I went in and clicked the credit button, but I need to have a payment account to apply the credits to. Current drop down is a list Bank accounts. Is it possible to create an account for Payroll accruals in that box and apply the credits via Bill Pay in lieu of creating a reversing Journal entry?"

If the credit equals the amount of the bill, they net to zero so there will be a $0 entry to whatever bank account you select.  Personally, I like to set up a bank account called 'Clearing Account' and use that.  But, again, in the future, if you don't want your reversing entry to post to Pay Bills, you need to keep it from posting to A/P as described above.

I

That looks right but you need to look at your A/P ledger and see what line from your JE and reversing JE are hitting A/P.  Something is.  Whatever account that is, you can change it to a non-A/P other current liability account and the reversing JE will clear it without it hitting Pay Bills and requiring you to apply the reversing JE manually. 

I went to the chart of accounts to edit one of the accrual accounts and change it to a non-AP other current liability.  QB make you chose from the following type of accounts:  Income, Expenses, Banks, Assets, Credit, Liabilities or Equity.  There is no Non-A/P Other current liability option.

I also went back into Pay Bills and attempted to apply credits.  Message pops up stating Something's not quite right, " you can't apply more credits than there are bills due."  So, I still cannot clear them out. 

@SAT2021 

I went to the chart of accounts to edit one of the accrual accounts and change it to a non-AP other current liability.  QB make you chose from the following type of accounts:  Income, Expenses, Banks, Assets, Credit, Liabilities or Equity.  There is no Non-A/P Other current liability option.

You need to click on Liabilities, then select 'Other Current Liabilities' under 'Save account under".  As far as applying the credit to Pay Bills, I would suggest you contact someone that can look at your books.

After spending hours and hours searching the internet I think I found a solution.

I am have the same exact issue.  How did you rectify the issue?  I have spend hours online trying to find a solution.