What is a payroll journal?
A payroll journal is a detailed record of transactions that are related to the company’s payroll. Smaller organizations often choose to record their transactions directly in the general ledger. Larger companies will find that the numbers of these entries will fill the general ledger. In light of this, they record payroll-related transactions in the payroll journal, and then record a single entry in the general ledger that reflects all of the transactions recorded in the journal. When they use accounting software systems, the software posts transaction totals from the payroll journal into the general ledger, but most of the time this only happens on a request from the user.
If you need to investigate a specific payroll entry and your company is using a payroll journal, it would be better to research it in the payroll journal itself. The level of detailed information that you require, will not be available in the general ledger.
The payroll staff creates journal entries that are recorded in the payroll journal. The the periodic payroll entries are essentially important. There may also be any type of special entries at the end of each month. These include entries such as accruals for vacation pay, danger pay or sick pay.
Once entries have been made into the payroll journal and the accounting staff posts a summary of this information into the general ledger, the information will appear in the income statement and balance sheet.
If a company uses a fully computerized accounting system, it may not be necessary to print out the payroll journal details. All research concerning specific payroll transactions will be conducted on-line. If it is deemed necessary to print out and store the journal, it must be stored in a secure location. A payroll journal contains information on all the benefits employees receive.
In some accounting software packages, the payroll journal may be invisible. The database is structured so that you simply enter transactions without specifying the correct journal. This makes it easier for you to manage your journals at all times