I have been registering Pay slips without making recording payments, I have realized now this was not correct and I should have recorded the payments. How can I clear and make the Employee clearing account to zero so that my Liabilities are zero without recording them as payments? as in reality i have no liabilities and have paid all salaries plus i want my Bank and Cash Accounts to remain the same. I tried with journal entries but failed.
Why not delete all the Payslips that you have created?
Thanks for your reply, I need to have it as proof, as I have attached original signed invoices by the employees in there.
You need to edit the payroll payment transactions
What account did you record when you made the payments?
You would have double counted the payroll costs if you created payslips and recorded the payments as wages
Yes, that is a good idea to put it in the retained earnings, thanks for the heads-up 
I did not understand, I have made payslips not payments, the payslips are under salaries and wages expense account
What did you put when you recorded the cash/bank payments?
You said you have made payments
I have not made payments, i have only recorded payslipps under wages and salaries. my initial thought was it will auto-create the payment automatically, but it does not and i wanted to fix that, but i put them in retained earnings as @mabeaga recommended
Then just make the payments and clear the employee account - if you have not recorded the payments, your bank account must not include the payments
Presumably, you did pay your employees
@Bayar_Shahab, it is impossible to understand your situation and provide advice when you directly contradict yourself.
That recommendation was based on your statement that you wanted to zero out the liabilities created by your payslips. It would not have been correct accounting, because it adds to your equity without any reason. And it makes real liabilities vanish as if by magic. Retained earnings is not a waste basket where you send problems. It records profits waiting to be distributed in some fashion to capital accounts or owner’s equity. If your business is a sole proprietorship, Retained earnings is owner’s equity. The journal entry @Mabaega outined effectively steals your employees’ earnings and puts them in your or other capital account holders’ pockets.
To obtain a real solution, you need to very explicitly describe the actual situation in the real world—not what you have (incorrectly) recorded in Manager.
If you have any recommendations or advice, I would appreciate it. However, if you’re unable to provide constructive input, I kindly request refraining from using disparaging remarks… The situation I’ve explained is clear, and I’m seeking a solution. While I acknowledge the mistake made, I’m primarily interested in finding solutions rather than dwelling solely on the error. Thank you.
@Tut offered you a solution and that is that you first “…explicitly describe the actual situation in the real world—not what you have (incorrectly) recorded in Manager…” When we know what you really did we can help you;
For example in the real world there are various scenarios that could have played out, see examples below.
Scenario 1: You paid salaries but never recorded these in Manager
Scenario 2: You entered payslips but did not record any salary payment against each
Scenario 3: You did not pay salaries but created payslips
However, you do not provide any of these and a solution can indeed only be found when “…dwelling on the error…” because we do not know what error(s) you made.
Please also note that except for the developer, users and moderators support voluntarily and if you would like to be helped you could show some courtesy to those that do such as @Tut, whose remarks were far from disparaging. The forum rules at FAQ - Manager Forum are clear:
…You may wish to respond to something by disagreeing with it. That is fine. But criticize ideas, not people…
Its really hard to understand your situation as @Tut said already. You have paid your employees but dont want to record these payments in Manager. How will you justify the cash/bank balance difference between actual and on Manager?
One thing i can think of that you dont want manager to keep record of the employees earnings and wages. (I assume u are doing it seperately) you just want to keep the record of your payments to them. If thats the case you are still doing it wrong. You dont have to use payslips at all, just use payments.
Payslips are not proof of payments. Just recognition of your employees earnings. Payments can act as proof if your employees signature is on it.
Dear Eko,
Scenario 2: You entered payslips but did not record any salary payment against each is the correct one, we have created payslips and have paid salaries too but have not recorded them as payments. I realize now that we have to record payments for each but the reason we do not want to do that is, it is going to affect our cash & cash equivalent, in the future, we will follow the right procedure, but we want it to fix that for the moment without recording them as payments.
Thank you for the support.
That would seem to indicate that you paid your employees using cash that was never recorded as a receipt in your business - in other words, the business received cash from customers, but this cash was not recorded as a sales receipt - is that the case?
If so, your business has under recorded sales and the business used this cash to pay the employees.
If this is the case, then the employees were paid with cash that never belonged to the business so you should delete the payslips
It would seem that your accounts are wrong and that your profits are not being recorded correctly
To which expense account did you assign the payments? That is in Settings -> Payslip Earning Items? see screenshot below (Note that I created the Salaries Expense account in the Chart of Accounts):
When issuing a Payslip against this earning item Manager will immediately add the amount as an expense and automatically in Liabilities assign an amount to the automatically created Employee clearing account (when enabling Payslip. This is basic to accrual accounting where the income and expenses are recorded when they occur similar to invoices rather than when the financial transactions are made.
You must have made salary payments somewhere but rather than assigning them to the Employee Clearing account you may have directly expended them to an expense account. So to correct this you need to assign these payments to the Employee Clearing accounts. This should not change the income and expenses because these were already recorded. It only ensures that the Liabilities are cleared as required.
Hello Joe, you are right, exactly, but i dont want to just delete the payslips, i need to correct it
That’s a good idea
Which is what you need to correct.
You paid the employees so need to enter that into Manager including where that money cam from.
Btw you don’t get to choose if correcting false records effect the prior account values.
Hello Eko,
To which expense account did you assign the payments? i have exactly done the same in the payslips had added salaries earning expense account and payslips are going there.
How can i do what you have recommended " So to correct this you need to assign these payments to the Employee Clearing accounts"?
Currently, I have cleared the Employee clearing account by assigning them to Retained earnings and as per your previous comment and tuts comment, this is not a correct approach.
