Journal Entries for Payroll

Abacus Accounting does not have payroll processing functionality, so firms need to process their own payroll or use a payroll solutions provider.

After each payroll cycle, your payroll solutions provider generates a payroll report for you. Using the information in that report, the following tasks need to be performed in Abacus Accounting each time payroll happens.

1. Ensure that all the payroll accounts are set up in Abacus Accounting (one-time setup).

2. Create a cash disbursement journal entry for the total payroll expense for the pay period.

3. Create a general journal entry for the total of the employee gross salaries and wages for the pay period.

4. Create a general journal entry for the employer portion of the taxes for the pay period.

5. After the first three journal entries are made ensure that the Payroll Liability account (21029.00) balance is zero (0).

6. Create a cash disbursement journal entry for the payroll service charge for the pay period.

7. If the employer offers a 401K contribution plan with an employer match, create a cash disbursement journal entry for the employer 401K match expense for the pay period.

8. Post the journal entries for the pay period. Select G/L > Post Journal Entries to open the Post General Ledger Journal Entries window. Then, highlight each payroll journal entry and click Post.