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Community > AU Payroll >

AU Payroll: Reconciling Payroll in Xero

Started by Michelle Campbell -   in AU Payroll

Can anyone help. I have three employees who are paid individually, not in a batch, so when reconciling their transactions appear on the left hand side of the screen. The bill generated in Xero is for the net total of the employees and appears on the right hand side of the reconciling screen. When reconciling there is no split function available like there is when one payment is for many bills ie the opposite, and I am having to part pay the bill to reconcile. Very cumbersome.

Any suggestions of how to impove this will be greatfully received.
Hi Michelle

This is quite odd, as we are in exactly the same situation as you (our bank wont accept batch payments, so we have to make individual payments). When we go to Match, we do have the option to "Split" the bill.

Have you already applied the payment for the full amount to the Purchase? If so, what you may be seeing is the "Payment" to reconcile against (which cant be split), rather than the Bill to reconcile against (which can be split). If you have applied the payment, you will need to "Remove" it from the bill. You should then be able to split the transactions accordingly.

Regards
 

Cassandra Scott  

Hi Cassandra

I glad its not only me. I have applied the payment for the full amount to the purchase. I will do as you suggest and see how I go. Thank you
 

Michelle Campbell  

If you are using PAYRUN instead of Payroll this will be the case, as a work around create a payroll clearing account, post the payrun to be drawn from the clearing account and then transfer the payments from the bank account to the clearing account. The payroll clearing account should always return to a nil balance if pays have been made correctly.
 

Elizabeth Jeanes  

Hi Cassandra, I hope the previous replies will have helped you, however if not the following is what I do.

1) Payroll - Post Pay Run (two employees receive the same amount each week, but the other is on casual so I click on his and make the necessary changes. SAVE (You many need to click on Save and next and then make the changes to the next employee)
2) Return to Payroll Post Pay Run and click on the date of the pay run.
3) Scroll down to the bottom of the page and Create Draft Rule (or something)
4) Go to Purchases and click on the waiting approval tag
5) Click on purchase waiting approval and approve
6) Process payments individually
7) Dashboard, you will see all employees that you have paid.
8) Click on first payee and do a search to reconcile - search XERO
9) The payment will come up as a total of all employees payments
10) Click on the payment and look to the rhs and you will see Split
11) Split the amount of the payee you originally clicked on and this will come up green allowing you to OK reconcile
12) Follow the process for the remaining employees and you will have reconciled all wages.

Hope this helps
Saskia
 

Saskia Peek  

Is there a way to post the Payroll Liability to another Current Liability A/c?

Its more correct to allocate this to a Payroll Liability A/c so you can visually see your salary obligations on the fly.

Accounts Payables should be left for liabilities owed to your suppliers.
 

Digital Accounts  

Hi all,
Just found this tip online. Has anyone tried this method ?? http://connectedaccountants.com.au/2013/06/13/xero-accounting-tip-3-payroll-reconciliation/
 

Mark Berry  

Merged: AU Payroll: How can I reconcile payroll payment in the new Xero payroll system?

We just set up our first Payroll Run for an employee, and paid the required amount from our bank account.

The debit from our bank account is showing in the Xero Reconcile Page, however there is nothing matched up against it.

Is this normal? I thought that Xero would have recognised the amount seeing it was in Payroll, or do I have to allocate it to Wages and Salaries manually?
 

Reception .  

Hi There,

As part of payroll process you need to create a draft bill for the payroll, then approve it. Then Xero will match your payment to the outstanding bill.

Open up the pay run again
Click PAY RUN OPTIONS and select CREATE DRAFT BILL
Then go to DRAFT BILLS and approve the payroll
Then go back and reconcile the withdrawal from the bank to the bill.

HOWEVER all of this will change as of next Monday with a new release coming out....
 

Charles Klvana  

Hi Charles, thanks for the response, that worked perfectly.

Hopefully Monday's changes will make it even easier.
 

Reception .  

Merged: New Payroll not showing up in reconcilliation

After the new payroll went live this Monday we have lost the option of creating "draft" bill and then approving it. Which is good because it was a pain.

However now, I have nothing to reconcile against when the payment shows on on bank statement in reconciliation. What part of the process am I missing?
 

David Crooks  

Merged: AU Payroll: Reconciling payrun payments in the new Xero Payroll

After the new payroll went live this Monday we have lost the option of creating "draft" bill and then approving it. Which is good because it was a pain.

However now, I have nothing to reconcile against when the payment shows on on bank statement in reconciliation. What part of the process am I missing?
 

David Crooks  

Hi David, check out the video that Xero includes in its release notes. It will explain how to deal with the payment. It requires you to create a Spend Money & allocate it to the new Wages Payable - Payrun Account 804 that was created in the new release.
 

Heather Bowie  

Hello David,
I have the same question as you, not only the reconciliation but I used to upload my manual time sheets to my draft bill when this was created during the payroll process. Where will I be uploading them to from now on. Can someone help me?
 

Jennifer Hetherington  

Help Please
I am training a new Xero client this afternoon and this is going to be embarassing as I am not going to be able to show them how to reconcile the bank payments to the payrun.

 

Karen Ng  

Hi guys
Having same issue
Can not reconcile ...
I gather its a glitch in the new system...
Awaiting a reply that may help this issue
 

Mitchall Adams  

Thanks Heather! The video, and more info about what this release means to you, can be found on the Blog here.
 

Brittany H (Community Manager)  

Well thats just great, how do we reconcile now, without being able to create a draft, I pay staff from different accounts.

very clever xero...
 

Bazaar Marketing  

Hi, I am trying to find the pay run options button to reconcile but it isn't there? Please help.
 

Kay Knight  

With the release on Monday, there is now no need to create a draft bill as everything is automatically journaled, and can be auto-memorised or Bank Ruled to minimise that manual work you have to do! A bit different than what you're used to but it does actually make it so much easier. Please have a look at this video which explains in detail how to now do your pay runs - even in different bank accounts.

If you're paying wages through non bank accounts, you can use manual journals. Any questions, do touch base with the Payroll team.
 

Brittany H (Community Manager)  

Merged: AU Payroll: How can I reconcile payroll payment in the new Xero payroll system?

Hi there,

As everyone has been aware, the newest release of payroll was in introduced on 19th August 2014. After I post the pay yesterday, all the costs now have gone directly to general ledger report. However, my question: what I have to do to reconcile the payroll payment which is on Dashboard now?

Looking forwards to your assistance,


Regards,

Thao
 

Thao Nguyen  

Hi,

I believe you just post it to the new payroll code in the Chart 804 directly

Jenn
 

Jenny de Vivo  

Hi Thao
Jenn is correct. Go to create tab enter "wages" under Name and Description account 804 and click OK.
See this link for full details. www.xero.com/au/tv/video/?id=6429-payroll-changes-in-xero
 

Clayton Burridge  

Merged: New Payroll - Paying wages

Hi.

I think I have missed something.

I been doing payruns for months now so we are all clear.

So now after i approve, there is no draft bill?

How do i allocate payment via bank account to that payrun?

Cheers
 

Gary Brown  

As you can see, I've merged a few similar posts into this one. Check out the blog Brittany mentioned above, this video, as well as other users answers here to help with reconciling your payruns. Thanks.
 

Matt Oldfield (Community Manager)  

I am new to xero. I have set up payroll and have posted salaries for my fortnightly staff and managers who are paid monthly. I am able to reconcile my fortnightly staff with the new payroll features easily. I am still unable to reconcile managers salary which was paid on the 15th July. I have created a draft bill for this (as instructed) however it still does not appear in bank rec page. When I look at the pay run for this is, it still gives me the option to create a draft bill (which it is not meant to). The journal created has a credit to the the chq account, which is correct but not showing as a possible match. SO STUCK and going around in circles here. Please help.
 

Jane Anderson  

No longer going around in circles, phew. Figured it out, I was not approving the draft bill on the reconciliation page. I love nutting things out, enjoying zero too.
 

Jane Anderson  

Thank you everyone for your assistance - I have been on leave since I processed my pay runs with the update. Maybe Xero could have included this final instruction in their summary notes :-(
 

Debbie Power  

Merged: AU Payroll: Pay run not showing in bank transactions

Hi,
I am processing my pay runs and when I go to the bank to reconcile with the payment it is not showing up. I think I am missing something as when I process the regular wages it works but I have set up another calendar for Subcontractors and it doesn't seem to be flowing through?
Your help would be appreciated.
Thanks,
Belinda
 

Belinda Hutchinson  

Any pros/cons with using the staff members' names for "Name" when creating the transaction to reconcile, as opposed to using "wages" for the name? I figured out how to do it before I saw the above linked video recommending "wages" for the name.
 

Troy Piggins  

Merged: AU Payroll: How do you reconcile payroll debit on bank statement

With the new pay-runs no entry is created in xero to reconcile with the debit in the bank statement
entry.Can anyone help?
 

Joe Bruzzese  

@Joe, please see the discussion above about reconciling your payruns using the new payroll system. Cheers.
 

Matt Oldfield (Community Manager)  

Merged: AU Payroll: Payroll reconciliation doesn't go to payroll account

Dear Xero team


I know now we don't need to create the draft bill for payroll and do the other steps, but since then when I reconcile the bank and put wages there is doesn't pay the wages account when I check the balance sheet or general ledger it still says wages payable, how is the right way to reconcile so this doesn't happen? Thanks
 

Nabil Chee  

I have the same issue, my payroll is showing up in my bank rec but nowhere to match it to.
Thought i must be doing something wrong, have looked at the how to do a pay run help section and it refers to anything before August 18 but what after this date please.
Thanks
 

Mandy Fennell  

Hi Nabil,

I had just had this reply from Xero, thought it might be helpful for you.

Xero Payroll has been updated on 18 August 2014.
For all new pay runs posted from release date onwards, these will automatically integrated to your general ledger, and a journal will be created. This means there is no longer the need to create a draft bill when a pay run is posted.
There are some small changes to reconciliation for these transactions posted from release date onwards.
You will now be required to create a Spend Money transaction coded to the wages payable liability account, instead of using the Find & Match feature to reconcile your payroll bills.
To reconcile each wages bank payment, you can use the "Create" tab in the bank reconciliation screen and select the Wages payable liability account that has been set up in the Payroll Settings.
Alternatively, you can create Spend Money transactions in advance, using this account and then use the Find and Match function to reconcile the net wages paid out of the bank account.
I've included the link below to our Xero Blog which will allow you to see what changes have been made. There is also a helpful video to explain this release.
Xero Blog: General ledger integration and other updates to Australian payroll
Xero Help Centre:
Reconcile a wages payment transaction
Where to add a direct payment transaction for spent money
 

Mandy Fennell  

Solve it this morning just after writing this, when reconciling you should put the account 804 wages payable not 477 wages, than all will be good. Cheers
 

Nabil Chee  

I found the old way so much easier!
 

Complex External Cleaning  

the new one is much faster and simple but the old one is better more detail
 

Nabil Chee  

Any word on my question a couple of posts above from 1/9/14?
 

Troy Piggins  

So.... I am also struggling with the new system or are we the only Xero bookkeepers that are trying to reconcile our clients payroll, including clearing the clearing account 804. We, unfortunately, have some clients that do their payrun and then pay their staff in dribs and drabs. Happy with the recon between the GL accounts and payroll reports but it is clear (due to 804 being not cleared) that some staff have either not been paid or paid incorrectly. This is proving to be a pain in the proverbial. Really hard to pin point the error - even doing an old fashioned tick and flick. Any ideas ?????
 

Jennie Smith  

Hi Troy - it's completely up to you on what name you decide to reconcile your wages against.
And Jennie, I can see that Support has reached out to you about this. Now that reconciliation is done through spend money transactions, one option is to use the bank descriptions and reference to highlight which pay run a bank statement line this relates to. Then when the bank statement line is imported, these details can be added to the spend money to record which amounts have been paid, and what amounts are outstanding for each pay run and employee.
 

Josh H  

Hi Everyone. Would someone at Xero please confirm Nabil's response above is the correct way to do it? Thanks in advance
 

Maria D'Amato  

Hi Mandy - thanks for passing on this response to the community. Maria, I can confirm that Nabil’s comment is correct, and reconciliation should be to the 804 account to reduce the liability owing to employees. For more info about this, check out our Help Centre.
 

Josh H  

OK so I've watched the video and read all the blogs however I have no account 804 in my chart of accounts? Maybe our accountant is hiding it from us!! I have had to manually reconcile bank account entry very week as Xero never remembers the previous entry?? HELP it's driving me crazy..... :)
 

Lucy Mackay  

Hi Lucy - Your wages payable account may have been set up with an account number other than 804. This is totally fine and there can be a number of reasons why it was set up this way. To see which account is being used, head to your Payroll Settings page and check out which account is currently in the Organisation tab in the Wages Payable Account field. This is the account you’ll need to use when reconciling the wage payments from your bank account.
If no suggestions are showing in the Create tab, it might be because the particulars of the payment are changing each time. Check out the Help Centre link here for more info.
 

Quenby S (Community Manager)  

This is the most ridiculous procedure .. How on earth did XERO developers think it was clever to make the user manually create entries from an automated process .. The old system was perfect .. Why change it ? I really hope this gets resolved in the future .. Let's hope XERO is not starting to go down hill !
 

Paul Cordeiro  

Paul, we did hear overwhelming feedback that most users wanted their Payroll to be integrated with their General Ledger - which is why we made the change. Rest assured we're not going down hill, we're just developing solutions we think fit our users. We do have plans to improve the Payroll reconciliation process and Community is the best place to add your feedback on what these improvements should be.
 

Brittany H (Community Manager)  

I'm trying to analyse my payroll data for the 2014 calendar year, but am having trouble with the new payroll system. My staff list their time by project code (one of my tracking categories), which appears to be magically calculated using a "PD" journal in the background. However, when I try to examine that journal entry, all I see is a group of staff payments in that month, with no ability to drill down to the employee(s) who worked on that project. Is there a way to download the detailed journal data?
The process evidently changed in August when the new system was introduced, so I'm stuck trying to do the analysis across two types of journal entries.
It would be wonderful to be able to drill down to the individual employee time sheet record to see how many dollars of wage cost that person charged to a specific project.
 

DJ Dean  

Hey DJ - Yes, you’re right. Back in August we updated Payroll so it now automatically creates and posts a journal to the ledger when a pay run is posted. This Payroll Expense journal will appear as a ‘PE’ transaction in your accounts. If you have payroll admin permissions in an organisation, clicking on the transaction from the Account Transactions Report will take you to the posted pay run in Payroll.
For more detailed information about where individual employees’ hours have been allocated, check out the Timesheet Summary Report in the main Reports menu.
Feel free to add a Feature Request for this over here.
 

Quenby S (Community Manager)  

Hi, Josh H, the above help centre link doesn't work anymore - can you please confirm where i can find this info? In relation to reconciliation against the 804 account, I currently see a locked icon on this account, and I can't reconcile bank payroll transactions to it - any help appreciated.
 

Joel Hauer  

When I reconcile my bank acct using the wages code using the create tab.. it creates a duplicate entry. Because what I have hitting my bank acct is two separate transactions. One for the employee payment as per their pay stub and one for the tax prepayment. This is entirely ridiculous. Everytime I think Xero is making progress i find something else that does not make any sense. If you set up Xero to auto deduct the tax, then you need a way to reconcile the employee check and the tax payment to a single paystub. This makes the income statement invalid and the wages expense is amost double the actual.
 

Brad Stees  

Guys we share your pain in the UK - We keep getting these "workaround" replies and endless links to the help centre. The payroll journal can't be accessed through the P&L and has been down for 10 days with no sign of a solution repair date - its a mess and we are paying to BETA test this dreadful feature.
 

Steve Homer  

Hey Team - Just a reminder that this discussion is specific to AU Payroll. To avoid any confusion for you guys (and us!), we have different areas for US Payroll, UK Payroll and NZ Payroll.

@Joel - It sounds like the 804 account in your organisation might be a system account that’s been overridden. If that’s the case, can you please get in touch with Support so they can give you a hand with this one.
@Brad - As your query relates to US Payroll, we’ll get one of our Payroll specialists from the US to get in touch with you about this. We’ll get an email out to you soon.
@Steve - It looks like this issue has been resolved for UK customers now. If you have any more issues when drilling into these transactions, can you please get in touch with Support.
 

Quenby S (Community Manager)  

I think all the time you are cut and pasting the same vanilla replies about the disastrous payroll issues across all three forums it seems a good idea that we share the experience too ?

We were all unknowingly drawn into this on going BETA test without any kind of prior permissions so it seems that we only have ourselves to get any real updates on the mess.
 

Steve Homer  

Merged: AU Payroll - Reconciliation of bank account

I am new with XERO and am having trouble with reconciling my bank account with paying employees:

1st Problem: Unable to match with a posted pay run
2nd Problem: when matching>adding new transaction>To employees do not come up as a contact
3rd Problem: what account do you reconcile with?? 477- Wages and Salaries OR 804 Wages Payable-payroll

As I have already made them "payable" in my "posted pay run" would ,making the transfer to employee account make it "wages and salaries".

Any assistance will help as I don't want to continue until have to go back through 12 months of payroll to make these adjustments.

Also with my first problem. WHY does the posted pay run not transfer into a "bill payable??" to reconcile bank account with. Rather than having to create new transactions. Its doubling up on work!!

Cheers
 

Ashley Bateman  

Hi Rachel,

Are you reconciling a batch payment or individual payments for each employee?

In relation to your 3rd problem, reconciling the payments from the bank feed should be coded to Wages Payable.
 

Joshua Gloede  

why does the payroll not post directly to the bank account that I chose in the settings? Why does it post to Wages payable hence why I cannot reconcile the bank statement and match it to the payroll transactions??????
 

Angie Colliver  

Hi Rachel

All pays reconcile to 804 Wages Payable. This is were the net wage gets reconciled. 477 - Wages and Salary is your Gross payments.

If you are paying via an ABA file from Xero see the link below.
https://help.xero.com/Payroll-Payrun-ReconcileWages-AU

If you are process the payments through your bank account manually see the link below
https://help.xero.com/Payroll-Payrun-ReconcileWages-Manual-AU

If manual then the easiest way to reconcile your payments out of your bank account is to create a bank rule for payroll to go to 804.
 

Joy Moore  

Can you please clear something up for me? I have read some of the queries here about payroll run and draft bill...

Are you telling me that after running payroll you still have to enter the pays into the bank?

So there is no journal entry from payroll to bank when you run payroll????

 

Debbie Webb  

Merged: AU Payroll - Reconciling bank transactions for a pay run

Hello! I've recently switched to Xero and generally love it. However I have started processing some pay runs and run into a problem with reconciliation.

Posting a pay run is straightforward; however reconciling the subsequent bank account transactions seems more difficult. I expected to be able to use "Find & Match" to select the pay run and allocate the payment accordingly. However I had to resort to entering transactions manually using the "Create" tab - i.e. an appropriate combination of:
debit: 804 - Wages Payable
debit: 826 - Superannuation payable

(The "Pay run journal" report is helpful here).

Similarly for reconciling ATO payments for activity statements:
debit: 825 - PAYG Withholdings Payable
debit: 820 - GST (if it's a BAS)

Am I doing this the right way? There seem to be too many steps involved.


(Some further information...
I experimented with creating a "bill" for the pay run with the debit transactions already set up. This then seemed to appear in "Find & Match" ((and also allowed me to do a 'split' payment)). However I had to set it up manually, so it was about the same effort as the first process.)

Any help or hints would be appreciated.

Brett
 

Brett Alcorn  

2 years ago you did crate a bill but that all changed in the payroll grade and now the payment gets reconciled to 804 wages payable.

You don't have to manually do this every time you can set up a bank rule for your payroll reconciliation so all you have to do is click OK. See link on how to create a bank rule https://vimeo.com/89045082
 

Joy Moore  

Great idea, Joy. :)

@Brett - You've got the right idea here. To reconcile payroll payments, Create a Spend Money transaction in the bank account coded to the corresponding payroll liability accounts, but you can automate this process using Bank Rules like Joy's mentioned. Just let the team know if you need any help setting this up.
 

Quenby S (Community Manager)  

Merged: AU Payroll: Wages - Profit and Loss vs Payroll Activity

Please remove this post if it not per community to rules

I am practising my knowledge of xero using all the wonderful videos and documents that are provided on your site with the intention of thereafter purchasing the system.

For some reason, I am not able to reconcile the P&L wages to the Payroll Activity statement, and all transactions for the fortnightly payroll are not showing up at all on the P&L.

If possible, please will you advise what I am doing wrong, or alternatively if prospective users of the system should not post on here.

Thanks in advance
 

Gail Smith  

Are your payroll settings correct. Are your Wages Expense Account mapped to Wages and Salaries (Expense account) and are you reconciling your bank transaction to Wages Payable (Current Liability) Account
 

Joy Moore  


Hi Joy,
Thanks for your response. I am currently using the Demo Version of Xero that is available to prospective users of XERO.

- I have checked the settings and all seems to be mapped correctly.
- I do not think I can do a bank recon as it is only the demo version.
- It only appears to be causing me reconciliation problems if I try and compare the P&L to Payroll Activity reports to the pre-installed data.

Thanks, for your time, and please let me know if as a prospective user of XERO I am allowed to post on these boards (I don't want to take advantage of your time and help)

Man thanks
 

Michelle Benson  

The P&L wage account should show the gross wages before tax.
 

Joy Moore  

Thanks Joy - It is reflecting Gross Wages, and I am trying to reconcile it to the Payroll Activity summary which shows gross earnings. I am also not able to reconcile the P&L super to Payroll Activity Super. Coincidently this is only in respect of the pre-existing data that came with the xero draft. I am not sure what I am doing wrong or if I am not understanding XERO vs the other applications that i have experience with.

REALLY appreciate your responses.
 

Michelle Benson  

If you have an understanding of processing payroll maybe you should consider doing some of the free courses/webinars that Xero offer. There is a free payroll webinar coming up in a few days. I have attached a link
https://www.xero.com/au/training/158-small-businesses/264-business-owners/454-payroll-specialist-training/

Hope this helps.
 

Joy Moore  

Thank you so much for all your assistance and help. I appreciate your time.

All the best,
 

Gail Smith  

Yes, thanks Joy!
 

Brittany H (Community Manager)  

We have just changed two of our employees from ABN contractors to PAYG and prior to having payroll set up in Xero have just paid them using the Wages and Salaries chart of accounts. Do I need set up an opening balance as well for these amounts before the first pay run or should the opening balance be left blank as it is already paid against the expense account? Also how will the first week super and tax chart of accounts reconcile if they weren't processed through the official pay run yet? Thanking you
 

Simon Cozens  

Hey Simon, did you end up getting this sorted? If you still need a bit more help it may be best to get in touch with Support - they'll be able to help much more than we can on Community :)
 

Brittany H (Community Manager)  

Zach you don't have to do a draft bill. You can set up a bank rule in your reconciliation to reconcile direct to your Wages Payable account. It works very efficiently.
 

Joy Moore  

the riduculous payroll module and it deficiencies is why i just switched to quickbooks online for all 3 companies after 3 years with xero. yes its $100 more a month. not pennies. but it actualy does what a payroll service is suposed to do. and i dont have time to manage al the workarounds. if you use the desktop version of QB its actually cheaper than xero and you can use three EINs for 30 a month. pretty cheap. but i needed mobile. the half assery of xero made me switch. Id rather pay for a decent product than use a "free" that doesnt actuall work like every other payroll platform on the planet.
 

Brad Stees  

the problem zach is that we often want to use multiple bank accts. and you cant do it in xero. i pay my taxes out of a different acct than my payroll. its just what i do. you auto jv my selected bank. lock it and i cant do anything with that. the lack of flexibility is astounding.. flexibility is king and it requires no speci programming. everything should have a pull down menu. period.
 

Brad Stees  

Hi Joy. Do you mean set up a rule for each and every person?
 

Zack Kneale  

Reconciling staff pay against tracking category

Hi there,

our staff use the Xero Me app to log their hours. They log their hours against a tracking category. When I reconcile their pay, I would like to be able to reconcile how much of that pay went to which project.

This said, if reconciling in this way makes no difference to tracking that pay - eg. the tracking category is a project. If I can do a report against that project and find how much has been spent on each staffs' wages for that project without reconciling in that way, then great.

Hope that makes sense. Please advise.

thank you :) roxane
 

Roxane Adams