Follow this guide to set up advanced journals for the Pre-approval summary2 and Bookkeeping (Xero/Quickbooks/FreeAgent) submission reports.
General #
Every company organises its journals differently, and it is therefore not possible to create a single journal for all cases. You should have a clear view of how you want the Journal Debits and Credits to appear first. Configuration can appear complex, but full power is required to be able to configure any journal which can be automatically generated and posted to online bookkeeping.
It is usually helpful to set up the Pre-approval summary2 configuration first in Company Setup > Report Definitions > Pre-approval summary2 > Update
Once this is working as expected, you can then set up the Bookkeeping configuration the same way e.g. Company Setup > Report Definitions > GB Xero Journal > Update
The typical flow involves configuration changes, followed by Pay run > Redo to see the resulting journals. This is repeated until the desired journal has been achieved.
Simple Example #
In the simple example below the company expects to receive a recoverable amount for SMP.
This amount will appear as a negative on the Debit side and therefore reduces the total P&L for the company.
It also appears as a negative on the Credit side because there will be an amount effectively coming back from HMRC to offset the tax payments.
Her is The report Configuration is on the left and the resulting Journal on the right:
Complex Example #
The next example below shows another scenario. The report Configuration is on the left and the resulting Journal is on the right:
Moving Statutory to a different Debit account #
Statutory pay is generally included in Gross Pay which is helpful for the employee. If you need to post the Statutory pay to a separate account, you will need to:
- Subtract Statutory pay from the Gross Pay account – see the red outlines in the example. Note how the Negate is used to switch the SMP (Gross Pay) positive into a negative.
- Add Statutory recoverable pay to a new account – see purple arrow in the example
Adding recoverable difference to Credits #
SMP has 2 different outputs: SMP (Gross pay) and SMP (Recoverable) which differ depending upon whether Small Employers’ Relief is applicable:
| Standard | Small Employers’ Relief. | |
|---|---|---|
| SMP (Gross pay) | 100 | 100 |
| SMP (Recoverable) | 92 | 103 |
See the blue outline in the example which adds the recoverable difference to the SMP Compensation credit account. This is accomplished by having one value as a positive and the other as a negative.
Bookkeeping Journal #
Finally, to check the values that will be posted to online bookkeeping (Xero/Quickbooks/FreeAgent), complete a Payrun > Redo and then view the Pay run > View > Reports tab. When multiple values are posted to the same account, these are summed together first.
The bookkeeping journal will have an Error state if it does not balance which will need to be corrected before pay run approval.
If you create a journal configuration that needs to be copied onto a different company, then see this article Bulk copy definitions between companies