Posting to Accounting – Imbalance and Incorrect Documents – Trouble Shooting
I am writing this blog to share my experiences and techniques i used to trouble shoot the issues with posting to accounting..Again i just sharing my view point and am happy to be corrected ..Being a consultant i would strongly suggest that users simulate the postings while they finalize the payroll reconciliations..It may happen you realise that the gross to net calculation would cause the error in posting to Accounting and you would have to reprocess your payroll..That is anyways due to a bad configuration but none the less “Better safe than sorry”
Taking a cue from principles of accounting which always stressed on debit must be equal to credits, i conclude the below logic
Gross Wages + Employer Contributions = Net Pay + Employee Contributions + Employer Contributions
We will take the same payslip to exhibit the importance of each of the steps mentioned. First we will see the correct posting for the payslip
| Payments | Amount | Deductions | Amount |
|---|---|---|---|
| Basic Salary | 1000 | Taxes | 50 |
| Social Sec. EE | 100 | ||
| Net Pay | 850 | ||
| Social Sec. ER | 150 |
POSTING OF ABOVE PAYSLIP
| Expenses | Amount | Balance Sheet | Amount |
|---|---|---|---|
| Basic Salary (Dr) | 1000 | Net Pay (Cr) | -850 |
| Social Sec. ER (Dr) | 150 | Social Sec. EE (Cr) | -100 |
| Taxes (Cr) | -50 | ||
| Social Sec. ER (Cr) | -150 | ||
| Total | 1150 | Total | 1150 |
Imbalance Error # 1 – There is an posting imbalance.
Check # 1 – Check on Gross to net calculation of the employee,Meaning add payments and minus employee deductions to double check the net Pay calculation.
Lets take the same example and see how the posting imbalance could occur because of the Incorrect calculation of Net Pay.
| Payments | Amount | Deductions | Amount |
|---|---|---|---|
| Basic Salary | 1000 | Taxes | 50 |
| Social Sec. EE | 100 | ||
| Net Pay | 950 | ||
| Social Sec. ER | 150 |
POSTING OF ABOVE PAYSLIP
| Expenses | Amount | Balance Sheet | Amount |
|---|---|---|---|
| Basic Salary (Dr) | 1000 | Net Pay (Cr) | -950 |
| Social Sec. ER (Dr) | 150 | Social Sec. EE (Cr) | -100 |
| Taxes (Cr) | -50 | ||
| Social Sec. ER (Cr) | -150 | ||
| Total | 1150 | Total | -1250 |
See above that the debits are not equal to credits which cause the imbalance in posting documents. Here you need to review why your net pay went wrong fix it and then check of posting to accounting.
This is one of the example where payroll has to be processed after necessary changes are done to correct the net pay before the posting is attempted again.
Check # 2 – Post confirming that the Gross to Net calculation of employee is correct ensure all the wage Types forming part of gross to net are posted.
| Payments | Amount | Deductions | Amount |
|---|---|---|---|
| Basic Salary | 1000 | Taxes | 50 |
| Social Sec. EE | 100 | ||
| Net Pay | 850 | ||
| Social Sec. ER | 150 |
POSTING OF ABOVE PAYSLIP
| Expenses | Amount | Balance Sheet | Amount |
|---|---|---|---|
| Basic Salary (Dr) | 1000 | Net Pay (Cr) | -850 |
| Social Sec. ER (Dr) | 150 | Social Sec. EE (Cr) | -100 |
| Social Sec. ER (Cr) | -150 | ||
| Total | 1150 | Total | -1100 |
Again we have a imbalance error but in this case due to the posting not done for “Tax” wage type.
Unlike previous case, since the tax wagetype is already in results and it was not mapped for posting we dont have to process the payroll
Once the wagetype is mapped you can attempt the posting which would resolve the issue.
Check # 3 – Check on Employer contributions and ensure they are posting on both side( Why both sides? because employer contributions are both expense and liability for employer)
| Payments | Amount | Deductions | Amount |
|---|---|---|---|
| Basic Salary | 1000 | Taxes | 50 |
| Social Sec. EE | 100 | ||
| Net Pay | 850 | ||
| Social Sec. ER | 150 |
POSTING OF ABOVE PAYSLIP
| Expenses | Amount | Balance Sheet | Amount |
|---|---|---|---|
| Basic Salary (Dr) | 1000 | Net Pay (Cr) | -850 |
| Social Sec. ER (Dr) | 150 | Social Sec. EE (Cr) | -100 |
| Taxes (Cr) | -50 | ||
| Total | 1150 | Total | 1000 |
Again in above example the ER contribution is mapped for posting unfortunately only for one side and correspnding posting is missing.
Similar to previous case once the wagetype is mapped for posting the issue with imbalance would be resolved.
Conclusion
The payslips we see in real time scenarios and the posting is not simple as the examples chosen here but this blog, i hope, would at least be a starting point for your trouble shooting… My First blog so please let me know your feedback
Best Regards
Ajay