User Support Forum

Is there a special way to deal with Medical Expense accounts. These are not exactly deductions. They are part of a whole Comp package but are only paid out as medical expense receipts are turned in. They are part of Payroll, but not really a pay check. Is there a way to keep this a part of the Payroll module, under an employee?

What it sounds like to me is that your church is holding the money in savings and paying medical bills as they come in.

That is similar to Federal Withholding, if you want to model it after something. With Fed W/H, you hold the money and pay it later to the government, when it comes due.

Set it up a deduction. Put the money in a savings and set up a liability, as the church now "owes" the money to someone else. When a medical bill comes in, take the money out of savings and debit the liability. There may be an intermediate step, where you transfer the money from savings back into checking.

Payroll deduction:
DB 01-1120-000 medical savings
CR 01-2120-000 employee #1 (liability)

Medical bill comes in:
CR 01-1120-000 medical savings
DB 01-1110-000 checking

CR 01-1110-000 checking
DB 01-2120-000 employee #1 (liability)

Maybe PC would handle it the same way, but the way it is diffrent from Federal W/H is that it is not deducted from each paycheck. It is part of their annual Comp. but not a deduction from their check. Is it possible to credit an employee's medical expense liability once at the beginning of a year, then have a deduction each month from it. If so, where do I do the balancing debit for the credit to the liability? That is, I credit the medical liability, debit ??? at the begining of the year.

At the beginning of the year, you would CR medical expense liability and DB an expense account that is somewhere near the wages and compensation area.

Each month, when you actually cut a check, you would
CR 01-1110-000 checking
DB 01-2120-000 medical expense (liability) until the amount in this account is zero.

Does that do it?

That sounds fine. I think that will work.

Thanks,
Aaron