My manager has paid an employee twice in error. However, the second payment was NOT done as a payroll payment but simply as a direct disbursement -write cheque - and assigned to the payroll expense account. So, at least the payroll liabilities have not been calculated twice which I think makes things simpler.
The employee has now paid back the amount; however, I am not sure how to enter this into quickbooks as I do not see an "income" type account for salary, only an expense payroll account.
Should I create a new income-type account e.g. salary reimbursements? Or perhaps enter a minus figure against the payroll expense account?
Yes, I would enter a minus against the payroll expense account though your accounts office may prefer these as contra, journal entries. These would be netted off in the P&L and these two transactions have no overall effect. You may already have an account in the Chart but I'd be surprised if this was an income one in QB.
I just want to make sure I understand this correctly.
If I write a cheque from the payoll expense account, but I use a NEGATIVE number, it will effectively reimburse that account?
And, would making a deposit to the payroll expense account have the same effect as above?
Ive only ever made payments from expense accounts and entered sales receipts against income accounts. It sounds as if you can make payments BACK into an expense account. Is that the case? Sorry, new to this.
Yes, normally you can enter a credit against an expense account (rates rebate springs to mind) and we'd want the P&L to show the costs for the year. All is well, providing these two entries cancel each other out. I expect if you created an income account, the refunded wages would appear somewhere up near the Trading account.
You should be ok but this might be software-specific. Amanda ????
If you have done a Write Cheque payment to the payroll expense account then you will need to do a deposit to reverse this out. Go to the Banking menu - make deposits. Cancel the first box that comes up and then enter the relevant details in the deposit window. Received from (the employee I assume) - From account (the payroll expense account) - Memo (put details of the transaction reversal) - Amount (the amount of the cheque refund).
When you save this, check the payroll expense account and the two amounts should net each other off.
Just journal off the amounts, crediting off from the payroll liabilities (tax, nic, employer's nic etc) and debiting the payroll expense account. Writing a cheque would mess up the bank and income/expense accounts.
But the OP said that he'd already written a cheque and that it had only touched the payroll expense account, not the payroll liabilities account. If he'd written a cheque to the employee, then the payment will show on the employee's payroll as well, so all things considered it might be better if he just deleted the cheque (assuming the employee has repaid the money in the same month). If not it will require more thinking about as the amount will have to show on the bank for that month and then coming out again the following month.
