Change from manual to automatic payroll journals

Summary

How to switch from posting salary journals manually, to automatically in Sage Accounting and Accounting Start.

Description

If you subscribe to both Sage Accounting and Payroll, you can automatically create journals in Accounting with details of employee wages. This happens each time you complete a pay run.

If you use Bank feeds, you must decide how to deal with the net payment tranasaction to avoid duplications.

This artical covers:

How to set up the integration with Payroll
How your system records salary details and the net wage payment

NOTE: If you use Sage 50 Payroll, you can can export the Nominal Link to a CSV file and import it into Sage Accounting.

Resolution

How the integration with Payroll works

Sage Payroll automatically creates a journal in Accounting every time you complete a pay run in Payroll. It posts with the date you’ve used for your pay date when processing the pay run.

The journal uses the default ledger accounts set up in Accounting.

If you want to record the journals using your own ledger accounts, you need to continue to create manual journals instead. You may also want to do this if you require more detailed reporting. For a list of the journals posted, read What's posted to Accounting when integrated with Payroll.

NOTE: You can also automatically record your payment to HMRC and pension providers. For more information, read Integrate Payroll with Accounting.

Switching from manual to automatic journals

Before you set up the integration:

Make sure you have completed manual journals for your previous pay periods.

After setting up the integration:

A journal automatically creates each time you complete a pay run
Make sure you don't complete a manual journal for the same pay period

Before we can record the automatic journal:

We need to set up the default ledger accounts used to create the journal

Once you allow the integration and complete a pay run, we create the required ledger accounts for you.

If any of your ledger accounts use the same code, we'll use the next available code number. For example: You already have a ledger account that uses 2214. We'll create a ledger account for Student Loans using 2215.

Set up the integration

You carry out the process in Sage Accounting.

▼Steps to enable integration for Accounting

Open Accounting.
From Settings, select Apps and Connections.
Select Sage Payroll.
Select Enable Journals from Payroll.
From the drop-down box, select your Default Payroll Bank Account.
Choose whether to record your net wages as a bank payment or a liability.
Select Save.

▼Steps to enable integration for Accounting Start

From More, select Apps & Connections.
Select Sage Payroll.
Select Enable Journals from Payroll.
Choose the Default Payroll Bank Account.
Choose whether to record your net wages as a bank payment or as a liability.
Select Save to enable the integration settings.

Recording net wages

Sage Payroll records the value of your net wages in two different ways. You can record it as a bank payment or as a liability.

▼Record your net wages as a bank payment

As you'll actually be paying money to your employees, you can save time by recording this bank payment automatically. This line of the journal will post to the bank account chosen when you enabled Payroll integration.

Use this when you pay all your employees from the same bank account. It shows as a single payment, rather than as individual amounts to your employees.

▼Record your net wages as a liability

You may not want to automate recording the bank payment and post this at a later date. Sage will instead record the total net wages against the Net Wages ledger account. Do this by choosing Post employee net wages to liability account when enabling Payroll integration.

When you make the real life payment, manually enter these details into Accounting.

Other things to consider

▼Bank feeds

If you use a bank feed:

Your bank feed will also import the wage payments.

To avoid creating duplicates, either

Delete the transactions imported through the bank feed, or
Match the imported transactions to the bank payments created by Payroll

▼Manage existing ledger accounts

You may have made manual payroll journals before. In that case, enabling payroll integration creates extra ledger accounts in Accounting.

On your reports, you'll see values in the old and the new ledger accounts. To report on the total wages over the year, add up the totals of both ledger accounts.

You can keep both sets of ledger accounts or move the values from the old to the new ledger accounts using a journal.

If you keep both sets of ledger accounts, hide the old ledger accounts so they don't get selected when new transactions create.

▼Hide ledger accounts

From Settings, then Business Settings, select Chart of Accounts.
Open each ledger account and clear the Visibility check boxes.

▼Manage your settings

You can manage the connection between your Payroll and Accounting subscriptions at any time. Go to Payroll & Accounting Integration Settings in Accounting.

Change from manual to automatic payroll journals

Summary

Description

Resolution

How the integration with Payroll works

Switching from manual to automatic journals

Set up the integration

Recording net wages

Other things to consider

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