After the 18th of August 2014 payroll changed in Xero. As a result the process of reconciling a payrun changed and you no longer had to generate a bill after processing a payrun.
The new payroll process works by utilising a clearing account. This account by default is called “804 – wages payable.” However this account may differ depending on your organisation chart of accounts. You can find this account in the payroll settings section of Xero.
When a payrun is processed the balance of this account increases. When you reconcile the payments you made to your employees in your bank, you will not have a bill to reconcile against or post them to the wages expense account. Instead just post them into a Wages Payable account and at the end of each pay period the balance in the account should total $0.
If you require more help please feel free to contact our office, visit the help guide available in Xero or go to Xero TV. Xero TV has a number of videos and tutorials to help processing payroll.
This article featured in our July 2015 newsletter