Below are sample entries created when payroll M004013108 was posted from HRMS/Peoplesoft on 1/25/2008:

The following entries, reversing the liability and crediting cash, were then created when payroll M004013108 was paid on 1/31/2008:

• Month-end bi-weekly payroll accruals – At the end of each month there are bi-weekly payroll expenses earned but not yet reflected in the university’s accounting ledgers.

Web address for Payroll Bulletin: http://www.fms.indiana.edu/payroll/bulcal.asp

Based on the payroll calendar above, bi-weekly payroll B005020808 had a period end date of 1/26/2008 and was posted as a February payroll (fiscal period 08). However, this entire payroll was earned in January (10 working days). Bi-weekly payroll B006022208 had a period end date of 2/09/2008 and was also posted as a February payroll. Of the 10 working days covered by this payroll, four days occurred in January and six days occurred in February. For the January monthly operating statements, payroll expenses were accrued for the 14 working days earned in January but not yet posted. The accrual was based upon the last available bi-weekly payroll processed. In this example the base for the accrual estimate was bi-weekly payroll B003012508.

Last Biweekly Payroll of Period X (Number of Days to Accrue / Number of Days in a Biweekly Pay Period) Amounts from B003012706 X (12 / 10)

The following diagram shows the earn codes selected by the bi-weekly payroll accrual program:

For bi-weekly staff, leave earn types are also accrued – sick, vacation, military, injury, etc.

Currently overpayments, cancellations, and hand-drawns are processed with off-cycle payrolls and would be excluded. Also, clearing account expenses and supplementals are excluded from the calculation. At this time, retroactive adjustments processed with bi-weekly payrolls would be included in the payroll accrual calculation.

When generating the accounting entries, the program will list as part of the document number the payrolls that are being accrued and reversed. In January, the document number used was ACCR-0506, indicating that the accrual was for bi-weekly payrolls B005020808 and B006022208.

Accruals are posted with a document type of “PAYA” and reversed using document type “PAYN”. Both of these document types have an offset object code of 9050 and do not affect cash.

To prevent overdrafts and to retain the budget to actual to encumbrance comparison, payroll accruals and reversals are accompanied by offsetting encumbrance transactions:

Example Accruals from January:

The accrual estimate recorded payroll expenses in the month earned.

Example Reversals from February:

The accrual reversals offset the actual payroll expenses that were booked by HRMS/Peoplesoft when payrolls B005020808 and B006022208were posted to February.