Payroll Statuses and Accounting
This guide provides technical details on payroll workflow stages and the resulting accounting entries.
Workflow Statuses
Each payroll record moves through a series of stages to ensure proper review and authorization.
| Status | Meaning | System Action |
|---|---|---|
| Draft | Calculation in progress. | Editable; no accounting impact. |
| Processed | Approved by a manager. | Locked; generates Journal Entry (Dr Expense / Cr Payable). |
| Paid | Payment has been issued. | Links to a Payment record; Debit to Liability. |
| Closed | Finalized and historical. | No further changes possible. |
Accounting Logic
When a payroll is moved from Draft to Processed, the system generates a Journal Entry. Below is a standard example:
Scenario: Monthly salary of $1,000.
| Account | Debit | Credit | Note |
|---|---|---|---|
| 601001 - Salary Expense | $1,000.00 | Records the cost to the company. | |
| 201001 - Salaries Payable | $1,000.00 | Records the liability to the employee. |
When the payment is made:
| Account | Debit | Credit | Note |
|---|---|---|---|
| 201001 - Salaries Payable | $1,000.00 | Clears the liability. | |
| 101001 - Bank/Cash | $1,000.00 | Records the money leaving the bank. |
Data Sources
The following fields are automatically populated from other modules:
- Employee Name/ID: From the Employee record.
- Base Salary: From the Active Employment Contract.
- Bank Account: From the Employee financial tab.
- Attendance Deduction: Calculated based on Leave Management records tagged as "Unpaid".