Application of Payroll Transactions

Path: Vendor Ledger Entry Records

The outstanding balance for a vendor who is a person is managed through the application of accrual transactions with deduction and payment transactions. The remaining amount on an accrual transaction – generated during this process – represents the liability for a specific document.

Step 1: Setting Up Automatic Application

In the HR and Payroll module settings, on the Application tab, set "Automatic application of employee transactions" to Yes. This ensures that when payroll documents and payments are posted, vendor transactions will be automatically applied according to the rules described below.

Step 2: Automatic Application of Payroll Transactions

When posting a payroll document with a non-interperiod calculation group, transactions are created in the Employee Ledger Entry:

Accrual and deduction transactions are applied based on unique combinations of the following application parameters:

Application Parameters

The value in the Outstanding Amount field in the accrual lines indicates the amount due for the document.

When payments are generated based on the payroll document (see Salary Payment scenario), they will take into account the unique combination of application parameters and, after posting, will be applied to their corresponding open transactions.

*Note: If the payment is not based on a payroll document (i.e., entered manually), for the automatic application to work, the following fields must be filled in before posting the payment: “Additional Account for Person”, “Payment Source”, “HR Order No.”, “Employee Code”, “Payroll Period Code”.

Step 3: Periodic Application of Payroll Transactions

If automatic application was disabled, or in other cases where payroll transactions need to be applied, you can run the "Apply Employee Payment" periodic task:

On the Parameters tab, specify the Payment Date – this will be used to limit the search for transactions to apply. On the “Filter Employee” tab, you can specify an employee filter. On the “Filter: Payroll Period” tab, specify a filter for the payroll period within which the application will be executed. *Note: Payroll transactions must be applied BEFORE generating the payment (Salary Payment scenario), because the payment amount is calculated based on the remaining unapplied amount from the payroll document in the Employee Ledger Entry.”