Check transactions and fix errors in your payroll accounts
If you have the Advisor or Standard user role, check your payroll transactions in the general ledger and confirm your balances are correct. Then identify and fix any reconciling or coding errors.
How it works
- When you post a pay run, Xero creates entries in the general ledger payroll expense and payroll payable accounts (payroll payable accounts may be also called liability accounts). Xero uses the accounts entered in your Payroll Settings to do this.
- Amounts posted to the payroll payable accounts need to be paid to employees or other parties, for example tax payments.
- After you’ve made your payroll payments and reconciled the transactions in your bank account, check that the payments are coded correctly.
Check payments are recorded correctly and fix any errors
- In the Reports menu, select All Reports.
- Under Accounting, click Account Transactions (New).
- Select your payroll accounts from the list.
- Select a date range, click Report Settings and include the Account Code, Gross, Reference, Source, Type columns in the report.
- Click Update to view the Account Transactions report.
- Review and confirm your transactions are coded to your payroll accounts correctly.
- Transactions created from a pay run in Xero payroll should have Payroll Expense as the Source.
- Wages and Salaries expense transactions created through Xero payroll should have Payroll Expense as the Source.
- Payroll payable accounts should have two types of transactions once the payments are made and reconciled. Payroll Expense, recording the employee amounts payable and Spend Money transactions recording the payments made.
If you see transactions in your Wages and Salary expense account that have Spend Money as the Source:
- Click the transaction to see the details.
- If the transaction is for a wage payment made to an employee for a Xero payroll payment, edit the spend money transaction to change the account to the wages payable account. You could open the transaction in a different tab on your computer screen to do this.
- Go back to the Account Transactions report and click Update to see the new account balances.