Accrued Payroll

This account reconciliation is a Liability account type and a List reconciliation type. This type of reconciliation allows you to make a list of the amounts that make up the account balance.

The Description shown above tells you what is to be recorded at the end of each month - the amount not yet paid to employees for time worked. This is caused by the natural delay in processing payroll information. Usually employees are paid at the end of a week (of course you know all months don't end on a Friday) and usually the week after they actually worked. Some professional organizations (such as a law firm or accounting firm) might have all salaried employees that are paid on the last day of the month, but even those companies probably have some hourly staff that are paid in arrears.

The Supporting Document that substantiates the accrual calculation has been attached. Below is the reconciliation for this account for the month ended 12/31/2010.

Below is the Reconciling Item for the end of the year accrual. As you can see, there is a brief explanation of the overall calculation, plus a reference to a detailed Excel workbook that was used to compute the amount to be accrued. It also tells you where to find the calculation. This information could have been included in the Description section of the General Ledger Account Setup window or in the Company Policy section of that same window. If the file may be in different places every month, it's probably better to mention it in the individual reconciling item as shown here. The choice is up to you. Just remember that the more you document now, the less you have to search for answers (or files) later.

This item has an Open Date of 12/31/2010, and the Close Date is blank. When the amount is cleared from the general ledger in January the close date can be completed.

The month end report is shown here:

This particular account is reconciled with no Unidentified Difference. When filing this reconciliation in your month end folders you would probably include a copy of the Excel workbook that is referred to in the reconciling item.

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