When posting to payroll there are several accounts that payroll posts to, some of these accounts are expense accounts which will post the labor and the cost of the labor as well as any benefits that the company pays for their employees.
The reason you enter payroll in your software even though you use a payroll service is to get the costs to the expense accounts and to the proper jobs and cost codes with the accurate burden which the software will calculate. This will replace any journal entry you used to do try to calculate the burden or estimate the burden to each job.
Because you are entering payroll, you will also be creating “liabilities” for payroll, or what the company would need to pay for this payroll। Since your payroll company pays these amounts, you will post these amounts to a “clearing account”. The liability + the net amount of the payroll checks will equal what the payroll company tells you is due to them to cover the cost of the payroll.
When the statement for the payroll comes in from your payroll service, you will post the amount that you owe them as you would normally, but you will not have to expense it to expense accounts since this was done during the processing of payroll। You will only need to credit your payroll GL account and debit the payroll clearing GL account for the total amount that is to be funded. This will zero out the clearing GL account if you record it each time payroll is done. If there is still a balance in the clearing account after this entry, you should review all deductions for payroll to be sure they are accurate and posting to the clearing account.
You may need to complete the payroll process by funding your payroll account (if you have a Cash account specifically for payroll)। You will put money in the payroll account from your general account to cover the cost of payroll. This can be done by writing a check from the general account and expensing it to the payroll account.
Success In-Formation would be happy to asssit you with setting up this feature in your software. We can be reached at firstname.lastname@example.org