For anyone that is using QuickBooks Payroll, you will notice that certain Payroll Items are arbitrarily assigned to specific general ledger accounts. Take for example CPP, IE, Federal Income Tax and even Accrued Vacation Pay.
If you have more than a handful of employees, this can result in confusion on how much is actually owed in accrued vacation pay, at any given time. To make your life a little easier it would be better to assign a separate account to your accrued vacation pay. Here’s how I would go about doing that.
First I would set up a new Other Current Liability account and call it Accrued Vacation Pay. Then I would go to the Menu Bar and click on Lists/Payroll Item List and highlight the VacPay-Accrued item.
Right click on my mouse will allow me to choose Edit Payroll Item and then I will click on Next.
I am now in the screen as show on the right, where I will change the current Payroll Liabilities account to the new one that I have set up. If you look closely you will see the Accrued Vacation Pay account just below the Visa Credit card.
I will highlight Accrued Vacation Pay and then click on Finish to complete the re-naming of the account.
This will save a lot of time at the end of your fiscal year, knowing that the two accounts are indeed separate and easier to reconcile.
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