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General ledger integration and other updates to Australian payroll

Posted 6 years ago in Xero news by
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As usage continues to grow rapidly we’ve released updates to Australian payroll today. We hope you’ll find them helpful.

Seamless accounting and Australian payroll

Since Australian payroll was released you’ve had to deal with the manual process of creating a draft bill to update the general ledger with payroll information. This introduces costly mistakes and makes the process confusing and overly manual. So we’ve fixed it!

From today, transactions from payroll will seamlessly flow through to and impact the general ledger immediately – the way it should be with payroll transactions represented as journals. This impacts the Profit & Loss and Balance Sheet, reflecting the impact of the approved payroll immediately.

We’ve added a new Wages Payable Account field within payroll settings to record the net wages payable amount of each pay run within the journal. This provides you the benefit of keeping your wages payable transactions separate from accounts payable.

Another frequently requested feature is the payroll expense journal. It contains the same transaction information you’re used to seeing within the draft bill. The net wages are not recorded against Accounts Payable but the new Wages Payable account. Reconciling your net wages will now require you to allocate the spent transaction to your wages payable account, instead of a payroll bill.

To assist you in learning the new process, we’ve created a short video demonstrating the change.

Employee notes

A frequent request in Community has been a place to store comments or information for employees. We give you ‘Notes’.

Australian payroll – Notes

Notes could include information like emergency details, to record important conversations or literally whatever you need.  All notes are time and date stamped and only accessible to payroll administrators. We’ll be connecting this area to Files in the future so you can store important documents as well.

Refresh of Australian payroll

You’ll notice a new ‘Payroll Overview’ screen that shows items that need your attention. This is for leave requests or timesheets that need approval or a draft pay runs that need processing. The payroll info bar provides quick links to common tasks like adding a new employee and other useful payroll information.

Australian payroll – Overview

The first time you use Australian payroll for a new business you’ll notice a setup guide with three steps. These are the minimum tasks that need to be completed before you can process a pay run. Once completed, it disappears. This is the first step on improving the user experience for those who are getting started with Australian payroll. Depending on the complexity and needs of your business you may need to do further setup. To assess your payroll needs we recommend working with one of our Certified Advisors.

The ‘Employees’ screen has also been revamped, with previous employees now being displayed in the ‘History’ section and the introduction of employee search. You can search for employees based on their name, employee group and calendar.

Australian Payroll – employee list

Over the coming months you’ll notice more screens being updated to a newer look and feel. As we update these screens we take the opportunity to make the experience better and iron out as many annoying itches as possible.

Changes to Australian payroll pay runs

In this release we’ve made it easier to manage adjustments to previously processed pay runs by introducing the ability to process a negative unscheduled pay run. This could help you avoid having to revert previous pay runs.

Based on feedback from our July release we’ve delayed changes to prevent the reverting of previous pay runs. We totally understand the need to process adjustments to historical pay runs but there is a balance with this and the need to maintain historical information. Our plan is still to introduce some changes later in the year. There are numerous issues and consequences with the current process that we need to address, whilst still allowing for adjustments to be made. The future changes will make it easier for the vast majority of business who use payroll but still allows for adjustments to be made when required – in different ways, based on the situation. We will be communicating any changes well in advance.

Coming soon

You’ll see future updates to all areas of Australian payroll including the leave application and approval process, employee and organisation setup and the employee view of payroll.

Check out the Australian payroll area on Community to discuss with peers and accounting partners everything Australian payroll related – questions, advice, tips and tricks. If you have suggestions on how to make Australian payroll better then share it as a feature request. You vote on ideas, and we listen. Whether it’s a big idea or a small tweak, we want to hear about it.

Please let us know what you think of the changes released today – we love getting feedback. The good, the bad and the hopefully not so ugly.

For more detailed information about this release please see the release notes.



September 4, 2014 at 7.18 pm

I too am having problems not being able to adjust a draft bill. We pay Sales agent retainers which previously had been entered under liabilities codes, this kept track of the amounts for each agent, as these are to be paid back or written off as a bad debt. I can enter these as reimbursements but I then need to manually enter the tax and super on the agents payslip. Also the deductions we make as reimbursement to the company (post tax paid expenses incurred by the agent) I could code to income (Agent recovered marketing). At present these deductions are being coded to the suspense account. I cannot change this manually as I do not have access to journal entry. It would be nice if the change was as simple as many have found it.

September 8, 2014 at 5.18 pm

We are processing this first payrun after 18th August. There is no tracking expenses by department any more after a draft bill option is removed, which creates a lot difficulties for our department budgeting. Also, it creates problems while you try to adjust the journal entry, not everyone is capable to create manual journals, regardless how well you set up the payroll item allocating to the account in the system, you will always have to do some adjustment, it used to be working very well with the draft bill.

October 22, 2014 at 1.17 pm

Hello Everyone,

We are currently considering a migration to Xero from QuickBooks.

So I am reading all posts with interest and trying to get as much information as possible prior to making the big change.

As regards our current method of payroll processing, we have individual periodical payments set up in our bank account for all seven of our employees, these pay the wages each week, data is then entered manually into quickbooks the day after as I do my daily bank rec.

How would this operate if we were using Xero?

Sarah 🙂

October 28, 2014 at 5.56 pm

Are there plans to develop a solution for adjusting payroll journals or to bring back draft bills? Or will we have to continue creating manual journals every pay run?

November 6, 2014 at 7.52 pm

The payroll change sucks! much prefer the create draft bill system

March 11, 2015 at 12.45 pm

I have an employee who has a deduction which contains GST.
XERO will let me apply that GST to the “GST liability account” in payroll settings however when I run a GST audit report, the amount is listed under “BAS excluded” transactions. When I run a GST audit report, the transaction is there.

This is a serious issue as my BAS is generating the wrong numbers and I can’t change them.
Is there a work around?

is Xero going to fix this?

March 30, 2015 at 3.35 pm

So I have been a bit slow on the up take with this until I kept noticing my P&L was always out as I was still sending my wage payments to the wages and salaries account. I have now gone back until August and adjusted these to be reconciled against the new wages payable – payroll account however now my bank account is showing a huge minus due to all the salary payments where as previously this was all balanced. What did I do wrong??

March 30, 2015 at 4.24 pm

found it – when I changed the account type it created duplicate transactions for that bank account that you need to remove

June 24, 2015 at 12.36 am

Where did you get the info to write Updates to Australian Payroll?

I think I have reviewed the same details someplace.

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