How to Use Payroll Accrual Tracking

This guide explains how to track wage accruals in Awditify — recording, posting, and reversing accruals for salaries, wages, vacation pay, and other payroll obligations.

What is Accrual Tracking?

Accrual tracking lets you record payroll expenses in the period they are earned, even if the actual payroll run and payment happen in a later period. This ensures your financial statements reflect expenses in the correct accounting period.

Common accruals include:

• Wages earned by employees in one month but paid in the next.
• Vacation Pay accrued as employees earn vacation entitlement.
• Bonuses declared in one period but paid in another.
• Employer Taxes (CPP, EI, WCB, EHT) on accrued wages.

Getting to Accrual Tracking

1. Open the client you want to work with.
2. In the left sidebar, under Payroll, click Accrual Tracking.

The Accrual Tracking Page

Summary Tabs

The page is organized into two views:

• Company Summary — totals across all employees by accrual type.
• Employee Balances — individual employee accrual balances.

Company Summary View

For each accrual type, you see a card showing:

• Accrual Type — Wages, Vacation Pay, Bonus, Employer Taxes, or custom types.
• Total Amount — the net balance of accruals (accrued minus reversed).
• Total Hours — if applicable, the hours associated with the accrual.
• Transaction Count — how many accrual entries exist.
• GL Accounts — the expense and liability accounts used.

Employee Balances View

A table showing each employee with columns for each accrual type:

• Employee Name.
• Balance per accrual type — total amount and hours accrued for each type.

Creating an Accrual Entry

1. Click Add Accrual at the top right.
2. Fill in the form:

Accrual Details

• Employee (optional) — select if the accrual is for a specific employee. Leave blank for company-level accruals.
• Accrual Type (required) — choose the type of accrual:
  • Wage Accrual — for salary or hourly wages earned but not yet paid.
  • Vacation Accrual — for vacation pay earned.
  • Bonus Accrual — for declared bonuses.
  • Employer Tax Accrual — for employer portions of CPP, EI, WCB, EHT.
  • Custom types as configured.
• Transaction Type (required) — choose:
  • Accrue — to record the accrual (increase).
  • Reverse — to reverse a previously recorded accrual (decrease).
  • Adjustment — to correct an accrual balance.

Amounts

• Amount (required) — the dollar amount to accrue or reverse.
• Hours (optional) — the number of hours associated with this accrual.
• Rate (optional) — the hourly rate. If provided along with hours, the amount is calculated as Hours × Rate.

Dates

• Accrual Date (required) — the date the accrual applies to (the period the expense is recognized).
• Period Start / Period End (optional) — the date range this accrual covers.

GL Accounts

• Expense Account — the GL account to debit for the expense (e.g., Wage Expense, Vacation Expense).
• Liability Account — the GL account to credit for the liability (e.g., Accrued Wages Payable, Accrued Vacation Payable).

ℹ Info: If you have configured default GL accounts in Payroll Settings, these fields pre-fill automatically. You can override them for specific entries.

Additional

• Description (optional) — a short description, e.g., "March 2026 bi-weekly salary accrual."
• Notes (optional) — any internal notes about the entry.
• Post Journal Entry — toggle on to automatically create and post a journal entry for this accrual. If off, the accrual is recorded but no journal entry is created.

3. Click Save.

Journal Entries for Accruals

When you post an accrual with journal entry enabled, the system creates a journal entry:

When you reverse an accrual, the journal entry is reversed:

Each posted accrual shows a link to its journal entry. Click the link to view the journal entry details.

Accrual Lifecycle

Monthly Accrual Workflow

1. At month-end, create accrual entries for wages earned but not yet paid.
2. Post the journal entries to recognize the expense in the correct month.
3. In the following month, process the actual payroll run.
4. Reverse the accrual entries to offset the expense now that it is captured through the payroll run.

Vacation Pay Accrual

1. As employees work, accrue vacation pay at the applicable rate (e.g., 4% or 6% of gross wages).
2. Post journal entries to track the vacation liability.
3. When an employee takes vacation, the payroll run pays out the vacation amount.
4. Reverse the vacation accrual to reflect the payout.

✓ Tip: Set up recurring monthly accrual entries for salaried employees whose pay periods cross month-end boundaries. This ensures your monthly financial statements are accurate.

Editing and Deleting Accruals

Edit

Click on any accrual row to open the edit form. Update any fields and save.

Delete

Click the Delete action on an accrual row. Confirm the deletion.

⚠ Warning: Deleting an accrual that has a posted journal entry does not automatically reverse the journal entry. You must manually reverse or delete the journal entry separately.

Linking Accruals to Payroll Runs

Accruals can be linked to specific payroll runs. When an accrual is linked:

• The payroll run ID is recorded on the accrual entry.
• You can see which payroll run an accrual is associated with.
• This helps track which accruals have been settled by a subsequent payroll run.

When creating an accrual, select the Payroll Run from the dropdown if applicable (shown when payroll runs exist for the period).

Accrual Types