ANSWER ID:9139

This support note describes how to pay employees from multiple business accounts.

There are linked accounts for Payroll transactions. To view or edit these, go to the Setup menu and choose Linked Accounts then choose Payroll Accounts. See the example below:

We see from the above example that you can link an account for each payment method, namely, Cash, Cheque and Electronic payments.

When the Process Payroll function is used, the appropriate linked account is selected based upon the employee's payment method as set on the employee's card.

What if I pay different employees using cheques from different bank accounts?

Method 1

Click a task to view it in greater detail.

1. Create a Payroll Cheque Clearing Account and link it to the Bank Account for Cheque payments in the window shown above.
2. Complete the Process Payroll function for employees paid by cheque. The clearing account will have a negative balance.
3. Record a Receive Money transaction paid into the clearing account and allocated to the various cheque accounts on a cheque by cheque basis. This will balance the clearing account to $0.00 and reflect the withdrawals from the various cheque accounts.

Task 1 - Create a Payroll Cheque Clearing Account and link it to the Bank Account for Cheque Payments

1. Go to the Accounts command centre and click Accounts List.
2. Click the Asset tab.
3. Click New.
4. In the Account Type field select Bank.
5. Specify a suitable account number. In our example we'll use 1-1125.
6. Name the account Payroll Cheque Clearing, or similar. See our example below.
    
7. Click OK.
8. Go to the Setup menu and choose Linked Accounts then choose Payroll Accounts.
9. In the Bank Account for Cheque Payments field, select the account created above. Refer to the example shown below.
10. Click OK.

Task 2 - Complete the Process Payroll function for employees paid by cheque

For more information on using the Process Payroll function, refer to our support note .

In preparation for the transferring of amounts from the Payroll Cheque Clearing Account to the standard bank accounts, print or display a Payroll Activity Summary report. This way you will have a listing of the individual cheque amounts shown in the Net Pay column and the total.

To do this:

1. Go to the Reports menu and choose Index to Reports.
2. Click the Payroll tab.
3. Click the Activity Summary report (under the Employees sub-heading).
4. Click Customise.
5. Enter the pay date in both the Dated From and To fields.
6. Click Display. An example report is shown below.
    

In the example above, let's say that the first two employees are paid out of General Cheque Account 1 and the other two out of General Cheque Account 2.

Task 3 - Record a Receive Money transaction

1. Go to the Banking command centre and click Receive Money.
2. In the Deposit to Account field, select the Payroll Cheque Clearing account. Notice the negative balance.
3. Enter the total amount in the Amount Received field.
4. Enter the pay date in the Date field.
5. Enter a description in the Memo field, such as "Paycheque Allocation" and include the pay date. This will help you when reconciling these transactions.
6. For each paycheque, make an allocation to the appropriate cheque account. Ensure tax code N-T is used. The transaction would look like the example shown below. It's a good idea to enter the cheque number into the Allocation Memo. This way it can be displayed on the reconciliation report at a later date (see To make the Reconciliation Report display the Allocation Memo below).
7. Click Record. You will see the balance displayed along the top right return to $0.00.
8. Click Cancel to close out of the Receive Money window. Because the individual cheque allocations are credits to the bank accounts in question, these will appear as withdrawals in the Reconcile Accounts window. The payment of different employees from different bank accounts has been achieved through one transaction. Note in the example below from AccountRight 2012, the Paycheque Allocation is displayed in a single line, but in other versions this may display as individual lines.
    

To make the Reconciliation Report display the Allocation Memo:

1. Go to the Reports menu and choose Index to Reports.
2. Click the Banking tab.
3. Click the Reconciliation Report (under the Cheques and Deposits sub-heading).
4. Click Customise then click the Report Fields tab.
5. Select the column to the left of the Allocation Memo field.
6. Click Display.

Method 2 - Process the pays in batches corresponding to the different bank accounts

This involves separately processing sets of employees paid from a particular cheque account and changing the linked Bank Account for Cheque Payments as required. This option may be more viable if you process a large number of employees in each case.

To make it easier to select the appropriate employees for each pay batch, we recommend modifying the employee's Card ID to include a prefix which indicates the bank account from which the employee is paid, for example, Card ID EMP0001 can be changed to ACC10001.

To edit the Card ID, open the employee's card and make the change in the Card ID field.

Task 1 - Change the linked Bank Account for Cheque Payments

1. Go to the Setup menu and choose Linked Accounts then choose Payroll.
2. Select the appropriate account as the linked Bank Account for Cheque Payments as shown in the example below.
3. Click OK.

Task 2 - Process the pays for employees paid from this bank account

1. Go to the Payroll command centre and click Process Payroll.
2. Process the pay as normal until step 2: Select & Edit Employee's Pays.
3. At this step, the full list of employees is shown. Make sure only those paid from this particular account are selected. If the employee's Card IDs have been changed to include an appropriate prefix, they will be easy to identify.
4. Complete the Process Payroll steps as normal.
    
5. Repeat the above steps for employees paid from other bank accounts.