21st Century Accounting Tutorials - Payroll

Payroll Departmentalization

None

Check this option if you do not wish to organize Payroll data by employee category and you do not wish to post Payroll expenses and liabilities to separate general ledger department or cost center accounts. The "None" option allows you to change your mind if you previously selected one of the other two options. If Payroll data was organized by category or posted by G/L account segment you can select None. The system will reorganize the Payroll data files without regard to employee categories or departments.

By Category

Check this option if you want to organize Payroll data by employee category. The system maintains each employee's Payroll data by primary category. When you print Payroll reports using "Category" as a Selection option and using "by Department" as a Sort option, the data is reported for the selected categories and organized in subsections by category. Using this option, categories are reported as departments only for organizing the data, not as true posting centers.

By G/L account segment, expenses and liabilities or expenses only

Check one of the "by G/L account segment" options in Configure/Company Information if you want to truly departmentalize Payroll expenses and liabilities or expenses only — that is, be able to post Payroll expenses and liabilities to accounts with segments that represent different departments or cost centers. Turning on this option lets you easily base the department segment portions of your Payroll expense and liability accounts on employees' assigned departments (in the Payroll/Configure/Employees window).

The department segment can be called anything you wish; it should be the account segment in your Chart of Accounts that you use to differentiate and analyze costs across the components — departments, divisions, locations, cost centers, or whatever you use — of your company. When you choose one of the options, additional fields allow you to you select the segment that represents the cost components (for example, "Department" or "Location") and select a default value for the segment (for example, "Administration" or "Tulsa"). Employees are automatically assigned to the default segment value (the "department" you select here when you turn the option on.

You can then change employees' department assignments from the default you select here to each employee's actual department in the Configure/Employees window. If you select an option for departmentalization by G/L account segment here, you have the option in each factor setup to departmentalize the factor. Thus, certain expenses and liabilities that do not need to be tracked at the departmental level can be posted to company-wide accounts.