Payroll
How to Create Payroll Deductions for Employees’
Accounts Receivable
The following procedure can be used in Payroll and Accounts Receivable for employees who purchase merchandise
from your store and will pay it off by having the amount deducted from their payroll check.
SETUP
You must create a deduction code in PDMU ‘1’. It may look something like this:
1.
2.
3.
4.
CODE
DESCRIPTION
TYPE
G/L ACCT NO
5. MAX CUTOFF ?
6. CALC METHOD
7. FWT TAXABLE ?
8. FICA TAXABLE ?
9. FUI TAXABLE ?
10. SWT TAXABLE
?
11. OST TAXABLE ?
12. SUI TAXABLE ?
13. CWT TAXABLE
?
14. W-2 INCOME ?
15. SEPARATE REG
?
ROA
HOUSE CHRG
D
1100-000
CASH
N
F
Y
Y
Y
Y
ß This is your Cash Account from MCT
ß This is important!
Y
Y
Y
Y
Y
ß This will print on the Deduction Register if ‘Y’
This deduction code (ROA) can be permanently attached to an employee in PEMU, or you can treat it as a
temporary deduction by using it when you need to in PTTU.
PROCEDURE
We will use an example of an employee who purchases $100.00 from the store on a house charge. That employee’s
payroll check will then be reduced $100.00 to pay the purchase in full. This procedure also will work for making
partial payments to the employee’s house charge.
1) When an employee purchases $100.00 on a house charge at C/POS, your general ledger will look like this:
Accounts Receivable
Sales
Debit
$100.00
Credit
$100.00
Document # 5156-How to Create Payroll Deductions for Employees’ Accounts Receivable
Copyright © 1997 Cooperative Computing, Inc. All Rights Reserved.
Page 1 of 2
Date 05/19/97
2) During payroll, the employee decides to pay the balance in full (partial payments work, too). In PTTU ‘1’, you
treat this deduction like any other, there are no special procedures. The $100.00 will be deducted from the
payroll check, and also taken out of the Cash account. This is like the store writing two checks: the first for the
employee, and the second for the store itself (for the ROA). General ledger will look like this:
Wages
Taxes
Cash
Cash
Debit
$1000.00
Credit
$200.00
$700.00
$100.00
à Gross wages
à Taxes deducted (FICA, etc.)
à Net pay from bank
à A/R deduction from check
and out of bank
Even though the physical check amount is $700.00, $800.00 is being taken out of the Cash account to pay
off the $100.00 accounts receivable charge.
3) After the payroll deduction, apply a payment into ROA for $100.00. Your general ledger will look like this:
Cash
Accounts Receivable
Debit
$100.00
Credit
$100.00
You are finished!
Document # 5156-How to Create Payroll Deductions for Employees’ Accounts Receivable
Copyright © 1997 Cooperative Computing, Inc. All Rights Reserved.
Page 2 of 2
Date 05/19/97