What you suggest would require separate payslip earnings items. And you will get wrapped up in local legal requirements on how to account for grant income—not a straightforward topic, and beyond the scope of this forum. Proper accounting aside, it seems this might be handled better by simply assigning the different earnings items to different expense accounts.
Thanks everyone for your advice and contributions, apologies for the delay in my reply I’ve been away.
I’m clearly not an accountant so forgive my ignorance on this but we get grant funding contributions towards salaries quite frequently and usually alongside other funds.
Given that we get multiple grants to tackle this and the funds are usually held in an alternative account to our main bank account - how best do you think to handle this in manager so that we can see how much of the remaining Grant funds for that particular grant, is ringfenced for wages?
As an example case:
Grant 1 = 10,000 (£5000 wages contribution)
Grant 2 = 5,000 (£1500 wages contribution)
We need to track how much of the £5000 for wages is remaining, inside of the Grant 1 as we spend it.
Same for Grant 2, 3 … etc.
We were using expense accounts for this with tags, but it’s more cumbersome.
We were also paying wages with contributions in blocks; so in two payments (1 portion from grant account and 1 from our main account) - which again is cumbersome, but at least accurate.
I know in hindsight it would’ve been better to move the wages portion of the grant funding into our main account to avoid this, but at the time we were swamped and we came up with a poor system (only 2 of us).
We will probably do this going forward, but for legacy I was just wondering if there was a way to clean this up.
@DIC Having read this once more, I now see that you’ve received the grant in advance and you want to keep to track of the remainder.
In that case the grant should be a liability against those funds you’ve received which should be amortized as you pay your employees over the term of the grant.
So your initial record of it should have been using Receipts against “Unearned Grants” liability accounts – one for each type of grant.
As for the amortization – as an accountant, I would handle this using Journals, but I can see the efficiencies in automating this using Payslips.
If we stretch the definition of contributions – which are accumulation of benefit obligations on the part of the employer – we can say that the amortization of the grant is a negative contribution. But that all depends on whether the law allows such creative use of contributions on official Payslips so you will have to consult your local labor laws.
Otherwise just amortize your liability using a Journal Entry like this:
Unearned Grant - A
Other income or Payroll expense
And you’re a right, depositing the grants in separate bank accounts would’ve helped immensely but even then you’d still have to use a liability accounts because P&L accounts will offer little to no help in this regard.
I want to side with @DIC and @subrosumon. For expense claims and invoicing, you can pick Projects, I believe that we should also be able to pick Projects for Payslips (for Earnings and Employer contributions) in order to track the cost of Labour on specific projects as part of the Direct Cost of projects.
My opinion is that we don’t really need a separate Timesheets tab for this except if this Timesheet module is going to introduce new functionality or replace the Payslip module.
For users who want to use Projects to track total project expenses, hired labour expenses and staff costs on projects whether in the non-profit industry or for-profit businesses must be recorded as part of the project’s direct cost (Direct labour) and reported as such in the income statement and in the Projects tab (see inserted screenshot).
You can use the Billable time to record the cost of labour. But you cannot use Billable time to charge costs directly into the project and report as ‘Direct Labour’.