Labour Transactions Clearing Account - Best Practice
I am working in the Project Transactions Accounting Design and for Employee and Contractors Timecards (Labour Transactions) imported from a third party system I need to recommend which is the best approach to decide which clearing account (credit account) should be used as per best practice when generating accounting for those transactions.
Employee Timecards
To record the payroll payments in General Ledger a manual journal is entered in GL as follows: (In my example COA structure is COST CENTER + ACCOUNT)
Debit 101.1200 (Cost Centre 101, Account 1200)
Debit 102.1200 (Cost Centre 102, Account 1200)
Credit 000.2100 (Cost Centre 000, Account 2100)
where 101 and 102 are cost centres to which the employees belong. The cost centres values can be 101, 102, .....n