Release funds when posting payroll

[bfranklin03]

Over the last several months, contributions have been received to raise money for the salary for a youth pastor. These contributions have been posted in fund accounting to a restricted fund. Now that we have hired a youth pastor, I need to release those funds each pay period. Is there a way to setup the pay items in the payroll module so that the correct entries are made automatically to release the funds? I know that I can add the entries to release the funds after posting payroll while the payroll entry is still an unposted transaction, but I was hoping that it could be taken care of in the payroll module to avoid any additional data entry.

[Matt]

This is a very interesting question. I did some experimentation and found that it is possible to do this in the Payroll module. What you would need to do is set up a Pay Item as an Employer Liability. When setting up the debit and credit accounts on this pay item you would make the debit account the release account and the credit account the released from restrictions account. In order for the system to let you do this you may need to first go to Preferences/Accounting Setup/Payroll and uncheck the Validate Accounting Transactions checkbox. Then you would just add this pay item to the employee and input the amount that you want to release when processing that employee's payroll.

[bfranklin03]

Thanks, the setting under preferences is the part I was missing. I couldn't figure out how to remove the limitations that Powerchurch places on the account types that can be used for the debit and credit accounts on Pay Items. Just out of curiosity, what validation is done when the Validate Accounting Transactions box is checked?

[bfranklin03]

Matt: I tried setting it up the way you describe, but no matter which account I set as the debit/credit account in the pay item, when it posts to Fund Accounting, the release account is the credit and the release from restrictions account is the debit. It appears that the payroll module is changing the debit/credit accounts for the pay item. Will you try this and see if you get the same result?

This is a very interesting question. I did some experimentation and found that it is possible to do this in the Payroll module. What you would need to do is set up a Pay Item as an Employer Liability. When setting up the debit and credit accounts on this pay item you would make the debit account the release account and the credit account the released from restrictions account. In order for the system to let you do this you may need to first go to Preferences/Accounting Setup/Payroll and uncheck the Validate Accounting Transactions checkbox. Then you would just add this pay item to the employee and input the amount that you want to release when processing that employee's payroll.

[Matt]

I tested this again and was able to get the debit to post to the release account and the credit to post to the released from restrictions account correctly in Fund Accounting once the transaction was posted in the Payroll module. Here are the steps I took:

In this example the release account is 01-4810-000 and the released from restrictions account is 01-4999-000.

1). Go into Payroll/Setup/Maintain Item Descriptions

2). Click the Add button. In the "What type of item would you like to add" box select the button for "Employer Liability". Then click ok.

3). On the next screen enter a number for the item number. Enter a description, such as "Release-YP Salary". In the liability account field enter 01-4999-000. In the Expense account field enter 01-4810-000. Then click the Save button.

4). Add the Pay Item to the employees pay record.

Hopefully these steps will work for you. If they don't please tell me what the actual account numbers are for the release account and the released from restrictions account you are trying to use. Also, please confirm that when you are entering the dollar amount for this pay item that you are entering it as a positive amount and not as a negative amount.

[bfranklin03]

Starting the process from scratch worked fine. Not sure what was going on. Thanks for the help!