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PAY Costing: Journal Entries for Void Cheques and Cancelled Payments
We have a problem in journal entries created by Costing and Costing of Payment process. The reversal journal entries are not created for Cancelled Payments and Voided Cheques, where the same are created for Reversals.
Here is the problem description:
Expense Account
Payroll Control Account
Bank Account
1. When we run the quick pay and run the costing process the Expense Account is debited and Payroll Control Account is credited. After the payment is done thru cheque and Costing of Payment is run, the Payroll Control Account is debited and Bank Account is credited.
In some situations, we may want to void cheque, cancel the payment and reverse the quick pay. And once done we expect journal entries get created to reverse all the entries created in step 1. The reverse journal entries are created only for reversal of the quick pay i.e., entry for debiting Payroll Control Account and crediting the Expense Account. The journal entries are not created for debiting the Bank Account and crediting the Payroll Control Account.