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How to integrate a payroll system in Xero?


Asked by
Emma Watson
2019/03/13 11:05
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You can easily integrate the payroll system with Xero accounting software so as to use the accounts payable invoices. And in order to do so, you can either follow the steps given below or get in touch with
xero">https://www.applemacbookprocare.c... helpline number.

• Login to your Xero Accounts
• Go to Accounts Payable and then edit the invoice and approve it
• After that, you can see the profit and loss page expense and any outstanding employee payment
• In case if there is the outstanding payment it can be paid using clearing account.

Read more: xero">https://www.applemacbookprocare.c... Support number
Operating System:
Windows 7
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Answered by
2019/05/22 18:17

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Answered by
Lokesh Yadav
2019/03/17 17:37

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Hi Emma,

The following example will step through how this works and explains in detail the resulting Profit and Loss and Balance Sheet figures.

Example

Consider the following fictitious example of a UK pay run.
We have wages of £2500 and National Insurance of £259.07 The total expense to the business is £2759.07
The employer may need to make other contributions and deductions from their employees pays before paying their staff (net pay). These amounts can be reflected on an Accounts Payable invoice as required.
Once this Accounts Payable invoice is approved we can see on our Profit and Loss the wage expense and employer national insurance are correctly shown for the period.
Looking at the Balance sheet before the payments to the employees have been reconciled we see the outstanding employee net pay is shown in the accounts payable total.
Once the payments to the employees for their net pay have been made and the Cheque Account has been reconciled the Accounts Payable liability reduces by the full amount of the net pay, leaving just the the NIC Payable and PAYE Payable.
In the case that there is an outstanding amount (e.g. an employee hasn't banked a wage cheque) on an accounts payable invoice at the end of a period you can pay the invoice off by using a clearing account. e.g. the Salaries Liability account
To do this you'll need to go into the Chart of Accounts and make sure this account has "Enable payments to this account" selected.
In Xero, go to Settings > Chart of Accounts > Liabilities and select the account you wish to use for this. Select the "enable payments to this account checkbox".
Once this account is setup you can go to the invoice and make a payment from your chosen liability account / clearing / holding account.
The resulting balance sheet shows the liability now moved to the salaries liability account.
The example shown is of a generic nature and your payroll solution may identify different lines. The same theory is applied to any regions payroll integration requirements.
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2019/03/14 12:40

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