Tech Tip: Expensing Paid Leave Hours As They Are Used Without the Accrual Affecting GL

We are accruing paid leave hours; however, we do not want the accrual to affect General Ledger. We want to expense paid leave hours as they are used. How can we set this up in AccountMate?

AccountMate always creates journal entries when paid leaves are accrued and/or used. When you transfer payroll data to GL, these journal entries will be transferred to the General Ledger (GL) module as follows:

Accrual of Paid Leave

DR: Expense GL Account ID*
CR: Liability GL Account ID**

Usage of Paid Leave

DR: Liability GL Account ID**
CR: Expense GL Account ID*
DR: Expense GL Account ID*
CR: Wages GL Account ID***

* From the Paid Leave Code Maintenance ► Expense Account field
** From the Paid Leave Code Maintenance ► Liability Account field
*** From the PR Module Setup ► GL Accounts tab ► Liability Account area ► Wages field

If you do not want the paid leave accrual to affect the GL Account ID balances, it is suggested that you enter the same paid leave Expense GL Account ID in the Paid Leave Code Maintenance ► Liability Account and Expense Account fields.

AccountMate will then use the same GL Account ID in both the debit and credit entries generated when you record the paid leave hours accrual and usage. Though journal entries are created and later transferred to the General Ledger, these entries have zero net effect on the GL Account ID balances. Of course, please verify this suggested setup with your CPA prior to implementation.